In Short:
Delhi High Court has ordered Lava International to pay Rs 244 crore + 5% interest to Ericsson for infringing on 2G and 3G patents. Lava found guilty of being unwilling licensee for failing to negotiate in good faith. Court rules royalty to be calculated based on end-product level, not on chipset value. Ericsson also asked to be paid additional court fees. Ericsson’s suit against Lava based on infringement of essential patents for telecom industry standards.
The Delhi High Court has ruled in favor of Swedish firm Ericsson against domestic smartphone maker Lava International, ordering Lava to pay damages amounting to Rs 244 crore with 5% interest for infringing on Ericsson’s 2G and 3G patents.
Court Ruling
In its verdict, the court validated seven out of the eight Standard Essential Patents (SEPs) claimed by Ericsson. Justice Amit Bansal specified that Lava must pay Rs 244.07 crore in damages, along with 5% interest, and revoked Lava’s counterclaim regarding the suit patent ‘Linear Predictive Analysis by Synthesis Encoding Method and Encoder’.
The court found Lava to be an unwilling licensee as it failed to negotiate in good faith, delaying licensing negotiations and showing little willingness to engage constructively. The court highlighted Lava’s lack of response to royalty rates proposed by Micromax as evidence of its unwillingness to cooperate in the licensing process.
Ericsson is entitled to damages based on the royalties it would have received if Lava had executed a FRAND license agreement at the beginning of its operations. The court rejected Lava’s argument for calculating royalties based on chipset value and affirmed the calculation at the end-product level.
Justice Bansal emphasized the comparable licensing approach for determining FRAND royalty rates and directed Ericsson to receive the awarded amount, with court fees, within three weeks. The court also instructed the release of deposited funds by Lava in favor of Ericsson.
Patent Infringement
Ericsson’s lawsuit against Lava centered on infringement of technologies such as the adaptive multi-rate speech codec and enhanced data rates for mobile communication evolution. These technologies are essential for third and second generation phones, enhancing speech quality and bandwidth usage.
SEPs are patents crucial for implementing industry standards, especially in telecommunication and technology sectors.
