Constitution of confidentiality club for Telecom Patent dispute resolution

The Delhi High Court in a recent decision has allowed an application of the plaintiff, Ericsson to constitute a Confidentiality club (See decision  here- )Ericsson v Xiaomi- Confidentiality Club Order (2). Ericsson had filed a suit for permanent injunction against the defendants, XIAOMI seeking a restrain from violation and infringement of its rights in its patents being as (i) IN 203034; (ii) IN; (iii) IN 234157; (iv) IN 203686; (v) IN 213723; (vi) IN 229632; (vii) IN 240471; (viii) IN 241747. The said suit is pending adjudication before Delhi High Court and is currently at the initial stages of trial.

Ericsson filed an application seeking constitution of confidential club. It was argued by Ericsson that the court has to determine as to whether Ericsson has offered to XIAOMI a licence on fair, reasonable and non-discriminatory (FRAND) terms and whether Ericsson is entitled to damages or payment of royalties from the Defendants for sales made by it devices infringing Ericsson’s patented technology and if so, for what period and on what terms. It was further argued that in order to assist Court, Ericsson would be producing various patent licensing agreements with similarly placed parties, including competitors of the Defendants. These agreements are highly confidential in nature and contain, apart from licensing rates, business sensitive information relating to such similarly placed parties, hence the plaintiff is seeking constitution of confidentiality club wherein all confidential licence agreements relating to similarly placed parties be permitted to be filed in sealed cover and be kept in the safe custody of the Registrar General and its access shall be to limited personnel from either side.

The defendants were not averse to the constitution of such confidentiality club but pressed the defendant/clients be allowed to be a party to such club or to have an access to the information.

The Court appreciated that in today’s world of globalization, where competition is at its peak, the organizations may not be inclined to disclose trade secrets/confidential agreements or its details, it had entered with different parties lest may cause serious prejudice to such parties. Hence the Court held that there is no impediment if the confidential club is created and its access is limited with procedure to be adopted as below :

  1. All confidential license agreements relating to similarly placed parties be permitted to be filed in a sealed cover and be kept in the safe custody of the Registrar General;
  2. Each party be directed to provide on an affidavit, a list of no more than five lawyers (who are not and have not been in-house lawyers of one of the parties) and no more than three external expert witnesses, who alone will be entitled to see the aforesaid confidential documents/patent license agreements;
  3. Said lawyers and expert witnesses will be bound by confidentiality orders passed by this Court and will not make copies or disclose the contents of the said aforesaid confidential documents/patent license agreements to anyone else or anywhere else, including in other legal proceedings, oral and written communications to the press, blog publications etc., so that the spirit of the confidentiality regime would be preserved;
  4. The parties i.e. the Plaintiff and the Defendant No.l and Defendant No. 2 will be allowed to inspect said patent license agreements only through the confidentiality club members and no copies will be made of such confidential documents/license agreements. After the inspection, the aforesaid confidential documents/patent license agreements be resealed and again deposited with the Registrar General of this Court;
  5. Direct that during recordal of evidence w.r.t aforesaid confidential documents/patent license agreements etc. only members of the confidentiality club shall be present;
  6. During proceedings of this Court, when the said documents are being looked at, would be in camera to the effect that only members of the confidentiality club be permitted to be present.
  7. The parties would give copies of the aforesaid confidential documents/patent license agreements to the members of the confidentiality club only after redacting the confidential information including the name of the parties. However, the rates/products will not be redacted.
  8. Any evidence by way of affidavit/witness statement which may contain aforesaid confidential information/terms of the agreement(s) shall be kept in a sealed cover and would only be accessible to the members of confidentiality club. However, a party filing such evidence by way of affidavit would give to the opposite party a copy of such affidavit after redacting the confidential information/ terms of the agreement(s);

 

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iBall restricted from importing handsets to India;Ericsson directed to negotiate FRAND license with iBall

The Delhi High Court restricts imports by iBall including mobile handsets and tablets in Ericsson vs. iBall interim order. This is similar to the case filed by Ericsson against Micromax, in which the court had ordered the Indian handset maker to pay royalty as an interim measure.

In the present case, it has been established in the court of law that iBall has failed to agree to sign a license agreement on standard-essential patents, required for making mobile phones and other devices. It was also established that iBall has not entered into a licensing agreement under the Fair, Reasonable, and Non-Discriminatory (FRAND) terms (covering patents on wireless technology standards such as GSM, EDGE and third generation).

Hence, on the day of the hearing on August 21, 2015, the lawyers for iBall sought time to take instructions from their client to decide if it was willing to sit with the  representatives of Ericsson and discuss the matter. However, no communication was received from iBall till September 2, 2015. iBall , in its defence also cited the recent Huawei vs ZTE decision to argue that Ericsson had not provided enough information and thus the suit could not proceed.Ericsson alleged that iBall had admitted the essentiality of Ericsson’s patents numerous times in its complaint to the CCI.

The Court, however pronounced that the suit filed by Ericsson is not premature and is maintainable. It further held that if the interim direction/order is not granted, Ericsson will suffer irreparable loss and injury for the reason that iBall will keep marketing mobile devices without the FRAND agreement and without paying royalty.It also restrained iBall from importing mobile handsets and other devices (including tablets) that infringe Swedish telecom equipment manufacturer Ericsson’s registered patents.The interim order was to become operative beginning 9th September.

However, an appeal was then filed by iBall against the interim order.The Appeal Court has directed the parties to try and reach a settlement in about 2 weeks.Ericsson has been directed to negotiate a FRAND license with iBall only for its Indian patents at this stage.The operation of the interim injunction has now been postponed till the next date of hearing as well.The appeal was re-notified to September 21, 2015.