We will look at the reasons why India is witnessing a high
volume of SEP litigation, analyses the trends in SEP litigation
so far in India, and considers the do's and don'ts.
Philips was the first to land on Indian shores to litigate
its SEPs and it was almost poetic justice when judgment was
reserved in a Philips SEP lawsuit in July 2017 becoming the
first SEP case in which post-trial judgment was reserved. This
was particularly interesting since Ericsson, another big SEP
litigant in India, has tried to expedite trial in its cases and
in fact one such case, Ericsson v Lava, has been
pending at the final hearing stage for a while now.
India introduced the Commercial Courts, Commercial Division
and Commercial Appellate Division of High Courts Act in 2016.
This legislation identifies certain cases, including patent
litigation, as "commercial cases" and provides for, among other
things, expedited procedures for such lawsuits.
However, even prior to the enactment of this legislation,
India witnessed significant SEP action. One reason for this is
of course the size of the Indian market and the localised
operations of several large implementers. It also helps that
litigating in India is more economical than in many
Another reason could be that Indian courts are viewed as
injunction friendly. In fact, at least in the
non-pharmaceutical patents space, Indian courts have
consistently upheld and enforced patents. However, one must
clarify that the characterisation of Indian courts as pharma
patent unfriendly is rather outdated with the recent decisions
of the Delhi High Court in the Roche v Cipla and
Merck v Glenmark disputes.
Given that the SEP landscape in India is still developing,
SEP holders may have viewed this clean slate as an advantage
and tried to seize the opportunity to mould the law
Further, successes in the initial cases paved the way for
further SEP litigation in India.
Trends in SEP litigation in India
The first SEP lawsuit was filed before an Indian court
around 2002 to 2003. Though the first few cases were quickly
settled after the court granted ex parte interim injunctions in
favour of the patentee, the real contest started with the DVD
patents litigation in India. This was carried forward by
Ericsson's telecom SEP litigation in which all the big Indian
handset manufacturers have been involved.
At least the following noteworthy trends have emerged in SEP
litigation in India. This list is not exhaustive but gives a
flavour of how Indian courts have viewed this species of
Interim arrangements have become almost the norm in all SEP
litigation. As a part of such arrangements, the implementer is
directed to deposit an interim royalty in court. There had come
a time when such arrangements were entered with the consent of
both parties. However, Chinese manufacturers have rapidly
gained a large portion of the telecom market in India, and
Indian telecom companies are reluctant to willingly enter into
such arrangements. In at least one case, an Indian company is
trying, unsuccessfully so far, to get out of such a
However, a court doesn't need the consent of parties to
direct that the parties should follow an interim arrangement
during the pendency of the litigation.
We have seen several versions of such interim arrangements
- the implementer deposits the royalty in court and the
right holder withdraws the money so deposited after
furnishing a bank guarantee to secure the interest of the
- the implementer makes a royalty payment directly to the
right holder after the right holder furnishes a bank
guarantee to secure the interest of the implementer;
- the implementer deposits the royalty in court and the
right holder may be permitted to withdraw such deposits based
on the final outcome of the lawsuit;
- the implementer furnishes a bank guarantee to secure the
royalty based on an interim arrangement. In this case, the
implementer does not make any actual payments to the
Indian courts have devised these methods to balance the
interests of the parties during pendency of the lawsuits. Most
interim arrangement orders passed by courts are being
challenged before the appeal courts and only time will tell the
fate of such arrangements.
Competition Commission of India's role
The interaction of courts and the Competition Commission of
India (CCI) in intellectual property disputes is complicated to
say the least. The two have contradicted each other on issues
such as calculating the royalty base; whether non-disclosure
agreements are anti-competitive; and whether the filing of a
CCI complaint shows unwillingness of a prospective
We have seen the court's initial reactions to CCI's orders
where the CCI ordered investigations against SEP holders. In
all cases where the CCI ordered investigations against SEP
holders, the High Court granted orders protecting SEP holders
by directing the CCI to continue its investigation but not pass
In the Ericsson disputes, at least three implementers
approached the CCI with complaints against Ericsson. In all
cases, the CCI ordered investigations.
Much water has flown since the Ericsson investigations were
initiated. There is greater awareness in the relevant circles
about SEPs and the threat of investigations before the CCI as
counterblast to SEP litigation is past its peak.
Interestingly, the High Court in a recent judgment remarked
that it is difficult to form an opinion that the conduct of
Ericsson (in its licensing business with the Indian
implementers) indicates any abuse of dominance. What remains to
be seen is the outcome of the CCI's investigations against
Ericsson and the interplay of the CCI and courts in SEP
Royalty based on comparable licenses
At least at the interim stage, most royalty arrangements set
by courts are based on comparable licences, though in some
cases the royalty figures appear to be the result of haggling
among the judge, the right holder, and the implementer.
However, these interim orders are challenged in appeal and
it is yet to be seen how courts finally treat this in
comparison with the "smallest saleable patent practising unit"
argument advanced vehemently by implementers.
In fact, the government invited comments on about 12
questions relating to SEP litigation in 2016. One question was
specifically on "the basis of royalty rates for SEPs". There
has not been any further update from the government on what it
proposes to do after it received comments on these
Alternate dispute resolution
Pre-litigation conciliation and mediation are also being
used by right holders in SEP disputes. Such methods also signal
the right holder's seriousness in discussions and can help
achieve a better tempo in negotiations.
Long discovery proceedings
Unless checked, litigation can become a long-drawn affair in
India. There are of course ways to expedite litigation. At the
same time, litigation can be slowed. Parties trying to delay
proceedings usually try to embark on extensive discovery
The Commercial Courts Act mentioned above is an effective
tool to expedite SEP litigation. However, this may require more
work at the pre-litigation stage. It may be good idea to play
out the entire litigation, including details such as collecting
relevant documents, documents that may be reasonably required
to meet any reasonable request for discovery, and identifying
witnesses, before filing a lawsuit.
Advice for litigants
As explained above, it is best to be prepared for all key
requirements of the litigation to the extent possible before
the lawsuit is filed.
In the SEP context, it is especially important to be aware
of information shared with the patent office. For instance, in
one SEP case, the implementer argued that the SEP owner's
royalty offer was non-FRAND since in its Form 27 filed with the
Indian patent office (this is the working statement requirement
under Indian law), the right holder disclosed lower rates.
Similarly, statements made by or on behalf of the SEP owner
in other jurisdictions should be consistent with those made
before the Indian court. This is especially important with
respect to the description of the invention. For instance,
under Indian law a mathematical or business method or a
computer program per se or algorithms are unpatentable.
Indian courts take the issue of suppression of material
facts very seriously. In fact, a party may lose the chance of
any interim relief if it suppresses a material fact.
Further, it is critical for a right holder to act sooner
than later – as more and more players in the same
field of technology litigate in India, courts are bound to ask
the question of royalty stacking.
||Pravin Anand, managing
partner of Anand and Anand, completed his law studies in
New Delhi in 1979 and has practised as an IP lawyer since
He has been counsel in several landmark IP cases,
including those involving the first Anton Piller order
(HMV); first Mareva injunction order (Philips);
first Norwich Pharmacal order (Hollywood
Cigarettes); moral rights of artists (Amarnath
Sehgal); first order under the Hague Convention
(AstraZeneca); and several significant cases for
pharmaceutical clients such as Merck, Novartis, Pfizer
and Roche. He received the National Innovation Foundation
Award from the Indian government in recognition of pro
bono work for rural innovators at the grassroots.
He is coauthor of the two volumes of
Halsbury’s Laws of India on intellectual
property and author of the India chapter in Copyright
Throughout the World. He also serves on the editorial
board of several international IP journals –
including many leading journals on IP jurisprudence
– and international legal magazines such as
CTLR, PLC – Life Sciences, Asia IP, The Patent
Lawyer, Who’s Who Legal – Patents
and Lexis Nexis Asia IP Guide.
He has spoken extensively at various forums, including
the World Intellectual Property Organisation,
International Association for the Protection of
Intellectual Property (AIPPI), International Trademark
Association, Licensing Executives Society, International
Bar Association, LAW ASIA and the UN Conference on Least
Developed Countries in the Digital World.