InterDigital patent case against Oppo, RealMe, OnePlus: What is the latest update from Delhi High Court?

The Delhi High Court recently rejected US-based InterDigital Technology’s plea to access licencing agreements between Chinese mobile phone manufacturers - Oppo, RealMe and OnePlus - and two Standard Essential Patent (SEP) licensors, namely Ericsson and Orange SA in connection with a patent infringement suit filed by InterDigital..Justice Anish Dayal, however, directed both InterDigital as well as Oppo, RealMe and OnePlus to furnish certain licensing agreements entered into by them with chipset supplier, Qualcomm.The May 31 ruling is linked to an ongoing court battle in India between InterDigital (plaintiff) and Oppo, RealMe and OnePlus (defendants).InterDigital has accused the defendants of having infringed patent rights held by InterDigital over SEPs needed to provide 3G, 4G and 5G services, and for playing high-definition videos (H.265 High Efficiency Video Coding/HEVC Standards) on mobile phones.InterDigital has asserted that the defendants cannot use such patented technology unless they procure a licence from InterDigital at fair, reasonable and non-discriminatory rates (FRAND rates)..To support allegations that the defendants were not willing to procure licences from InterDigital at FRAND rates, the plaintiff had urged the Court to order the defendants to disclose licencing agreements that they had entered into with Ericsson and Orange SA (other SEP licensors).On May 31, the Court rejected InterDigital’s request by holding that the defendant’s agreements with Ericsson and Orange SA were not relevant to determine the applicable FRAAND rates in this case.“This Court is of the opinion that the implementer i.e. defendants’ agreements with other SEP licensors like Ericsson and Orange SA, are not relevant, at least at this stage, for determination of FRAND rates,” the Court said.The Court added that it was up to InterDigital to show the FRAND rates agreed upon by it with other, third parties, to support its arguments against the defendants.The Court also factored in that the disclosure sought by InterDigital may affect the third party (Ericssion’s/ Oranga SA’s) confidentiality..Agreements by both sides with Qualcomm to be submittedThe patent infringement suit by InterDigital before the Delhi High Court was filed in 2021. Similar suits have been filed by InterDigital elsewhere in the world as well (including in Germany, the United Kingdom and China) and also against other mobile phone manufacturers (including Lenovo and Xiaomi).During the course hearings in Delhi, InterDigital argued that agreements between Oppo, OnePlus, and RealMe and Qualcomm for the supply of chipsets were relevant to decide the dispute.Notably, the defendants had argued earlier that they could not be sued for patent infringement as the SEPs held by InterDigital had already been licenced to Qualcomm, which then implemented the patented technology in chipsets that Qualcomm was authorised to sell.There was no need to obtain any further licence from InterDigital for the use of these chipsets, the defendants maintained. In other words, the doctrine of exhaustion (once a patent has been validly sold, the patent owner cannot curtail the use of authorised copies of the patent) would apply, the defendants asserted.On the other hand, InterDigital argued that its patent infringement claim is linked to the use of SEPs by the defendants in the mobile handsets as a whole and not just in chipsets.In any case, InterDigital contended that an examination of the agreement between the defendants and Qualcomm was required to decide whether the doctrine of exhaustion would apply.Meanwhile, the defendants contended that InterDigital should disclose an agreement entered into by it with Qualcomm. InterDigital opposed this plea, arguing that this agreement was irrelevant and that the licences covered by it had already expired. The licences covered by this agreement concerned old patents which dealt with earlier technology such as CDMA, 2G and a certain version of 3G, InterDigital added.The defendants countered that since the said agreement also covered SEPs for 3G services, the agreement was relevant for deciding the present dispute.The Court eventually decided to call for the production of Qualcomm agreements entered into by both the plaintiff as well as the defendants.The Court concluded that the agreement between the defendants and Qualcomm was relevant to assess if the doctrine of exhaustion would apply.Further, it held that InterDigital’s agreement with Qualcomm would be relevant to examine whether there was any overlap in the technology licenced to Qualcomm and the scope of what was procured by the defendants from Qualcomm.The Court added that once the agreements are produced, it would be made part of a confidentiality club to ensure that sensitive information remains protected..Pro-tem measures cannot be punitive: CourtIn a separate judgment passed the same day, a Division Bench of the High Court allowed the defendants to furnish a bank guarantee from an Indian Bank (IDBI) to secure the plaintiff’s royalty claims for the time being and allow the defendants the continue selling phones without an injunction.With this ruling, the Division Bench set aside a single-judge order which insisted that the defendants make a deposit with the Court’s registry as a pro tem measure (interim measure), to cover licence fees for the sale of phones in 2021-22, 2022-23 and 2023-24.The single-judge order was passed in February this year by Justice Prathiba M Singh after difficulties were encountered in ensuring that a Global Bank Guarantee furnished by HSBC Paris would be honoured in India as HSBC India refused to take any liability for the same.At the time, the single-judge had also slapped ₹5 lakh penalty on the defendants for causing ‘substantial delays’ in the case..The defendants challenged the single-judge order and sought to furnish a guarantee from an Indian bank instead of being forced to make a court deposit.They argued that they were not responsible for the delay caused due to the failure of HSBC to comply with directions to assure that the bank guarantee would be honoured in India.On May 31, a Division Bench of Justices Vibhu Bakhru and Vitatsa Ganju allowed the defendants to furnish a guarantee from an Indian bank as security for the plaintiff’s royalty claims.The Division Bench noted that the earlier bank guarantee arrangement was arrived at on consent in October 2022. If such a consent order was later found unworkable, the single-judge Bench ought to have considered the matter afresh instead of modifying the terms while disregarding the defendants’ stance, the Division Bench held.The Court also noted that the single judge had rejected the defendants’ offer to furnish a guarantee from an Indian bank on the ground that it may put them in a more advantageous position when compared to October 2022.Referring to this aspect, the Division Bench emphasised that pro tem orders cannot be punitive.The Court concluded that there was no reason to prevent the defendants from furnishing a bank guarantee from an Indian bank.The main suit is scheduled to be heard next on July 3 by a single-judge.Earlier, Justice Prathiba Singh had expedited the trial and made it clear that the suit would be decided by the end of 2024..Senior Advocate Gourab Banerji and advocates Pravin Anand, Vaishali Mittal, Siddhant Chamola, Pallavi Bhatnagar and Gitanjali Sharma represented InterDigital.Advocates Saikrishna Rajagopal, Julien George, Sidharth Chopra, Ms Julien George, Anu Paarcha, Avijit Kumar, Vivek Ayyagari, Aniruddh Bhatia, Arjun Gadhoke and N Parvati represented the defendants..[Read May 31 ruling by single judge]