LAVA ordered to pay ₹244 crore to Ericsson for patent infringement

The Delhi High Court recently ruled in favour of Swedish telecommunications giant Ericsson in a patent infringement case against Indian smartphone manufacturer LAVA. The court has ordered LAVA to compensate Ericsson with more than ₹244 crore for infringing upon its 2G and 3G patents.

Justice Amit Bansal, in a comprehensive order delivered on March 28, upheld the validity of seven out of eight Standard Essential Patents (SEPs) claimed by Ericsson. These patents cover crucial technologies such as Adaptive Multi-Rate (AMR) speech codec, Enhanced Data Rates for GSM Evolution (EDGE), and features in 3G technology.

The court’s ruling mandates LAVA to pay damages amounting to ₹244 crores along with a 5% per annum interest until the full realisation of the sum. Additionally, LAVA is directed to cover the additional court fees and release the deposited amount in favour of Ericsson.

Furthermore, the court allowed Ericsson’s claim for taxed costs and partial revocation of LAVA’s suit patent. It rejected LAVA’s arguments contesting the validity and essentiality of Ericsson’s patents, declaring LAVA as an “Unwilling Licensee” for failing to negotiate licensing agreements in good faith.

Justice Bansal emphasised the importance of fair, reasonable, and non-discriminatory (FRAND) licensing terms, stating that Ericsson is entitled to damages based on lost royalty fees. The court dismissed LAVA’s suggestion to calculate royalties based on chipset value, asserting that end-product level royalties are more appropriate in the telecommunications industry.

The judgment underscored the necessity of licensing entire SEP portfolios to ensure interoperability and technological progression. It recognised the comparable licensing approach as the preferred method for determining FRAND royalty rates.

In his concluding remarks, Justice Bansal applauded the counsels representing both parties and acknowledged the contributions of legal researchers in facilitating understanding of complex patent issues. He reiterated the importance of maintaining a balance between innovation encouragement and intellectual property rights protection. CNBCTV18