Ericsson takes Intex to court over patent infringement

The Swedish-based company moved the Delhi High Court last week, saying that it was taking legal action after failing to negotiate a licence agreement with Intex for "products compliant with GSM, EDGE, and UMTS/WCDMA standards."

Ericsson, one of the world’s largest mobile network infrastructure providers, has filed a lawsuit against home-grown smartphone marker Intex, accusing it of infringing on some of the company’s patents.

The Swedish-based company moved the Delhi High Court last week, saying that it was taking legal action after failing to negotiate a licence agreement with Intex for “products compliant with GSM, EDGE, and UMTS/WCDMA standards.” It has accused Intex’s telecommunications and consumer electronic products compliant with the GSM, EDGE, and UMTS/WCDMA standards, of infringing Ericsson’s essential patents.

Though Ericsson has exited the mobile phone space, it still continues to hold essential patents for a number of networking technologies in markets throughout Asia, Latin America and Africa.

According to people with direct knowledge of the matter, the crux of the problem lies in the royalty rates and licensing terms. Companies like Micromax and Intex, which operate on thin margins, complain that Ericsson has abused its dominant position by charging sky-high royalty rates for patents that have no other market alternative.

Fair and reasonable

Ericsson, on the other hand, looks at this a little differently. According to sources, the company had no other choice but to take legal action against Intex as most infringers generally refuse to take a licence on what it views as fair and reasonable terms.

This legal action comes a little over a year after the company sued domestic smartphone player Micromax over the alleged infringement of a number of essential patents. In the Micromax case, which is still continuing, the Delhi High Court judge asked Micromax to pay between 1.25% and 2% of the sale price of disputed devices and deposit the amount with the court.

Numerous attempts

“For more than five years, Ericsson has made numerous attempts to sign a licence agreement with Intex on fair, reasonable and non-discriminatory (FRAND) terms for products compliant with the GSM, EDGE, and UMTS/WCDMA standards,” said an Ericsson spokesperson.

“We have now, as a last resort, taken legal action to protect our R&D investment and intellectual property,” the spokesperson added.

If the court rules in favour of Ericsson, it could throw a wrench in the low-cost business strategy of domestic smartphone companies like Micromax and Intex. The next hearing on the matter will happen on May 8.

When contacted, an Intex spokesperson pointed out the matter was sub-judice.