HC Finds Lava Guilty Of Patent Infringement, Slaps Penalty

In a major set back to Lava International, the Delhi High Court has found the domestic handset manufacturer guilty of patent infringement in its dispute with Swedish technology major Ericsson. The high court in its interim order has asked the company to deposit a sum of INR 50 crore with the court. Failing the same, Lava will not be allowed to import mobile phones under the patents and technology, which are subject of the suit patents, and sell them in the market directly or indirectly.

According to the Financial Express report, the court has made exports subject to the deposit of the prescribed amount. In the 67-page order, justice Manmohan Singh has unambiguously termed Lava an ‘unwilling licensee’ that adopted delaying tactics and never showed any interest in negotiating the terms of the patents with Ericsson despite the latter making efforts towards that end, the report stated.

The court has ordered that Lava, in addition to depositing the amount, file the statement of accounts for the period of May 31, 2011 to May 2016 and continue to file the same every quarter till the final judgment is delivered in the case. It has allowed Ericsson to move an application for further deposit in case the final hearing of the suit is delayed on account of Lava.

While the order comes as a relief for Ericsson in yet another patent dispute case — it has earlier got similar favorable orders in its disputes with other domestic handset makers such as Micromax, iBall and Intex.

Holding Lava guilty of patent infringement and dismissing its petition for relief by terming it as false and frivolous, the court imposed a cost of R50,000 on it which is to be deposited in the Prime Minister’s National Relief Fund.

Lava International has given no comments on the order. The court in its order has quoted several instances to show how Ericsson was willing to negotiate the royalty rates but Lava did not responded. “Thus, the plaintiff (Ericsson) has been able to make out a strong prima-facie case in its favor and against the defendant (Lava). Balance of convenience also lies in favor of the plaintiff and against the defendant. In case the interim order is not passed or the defendant is not ready to enter into FRAND agreement with the plaintiff, the other licensee would also take the same stand which is being taken by the defendant,” the court said in its order.

It quoted Ericsson’s senior counsel as stating that from a very small business in 2011, when the negotiations started, the defendant’s (Lava’s) business has increased extensively. “At present, the business of defendant in mobile industry is about INR 7,000 crore. The defendant is the leader among the other traders and it is intentionally and deliberately not entering into the agreement with the plaintiff. The defendant has also failed to disclose this court as to under which technology its phones are being used,” the order observed.

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