Delhi High Court Awards ₹244 Crores Damages To Ericsson In Suit Against Lava Over Patents Infringement

The Delhi High Court has awarded Rs. 244 crores damages to Ericsson in a suit filed by it against Lava International Limited over infringement of Standard Essential Patents (SEPs).

Justice Amit Bansal acknowledged the transformative impact of the evolution of mobile telecommunications in India, which has opened up access to information and digital services, leading to a more connected and digitally empowered society.

“This progress, has been supported by implementation of standards by Standard Setting Organisations (SSOs), which have facilitated the seamless integration of new technologies and the universal adoption of new technology in mobile technology,” the court said.

It said that Ericsson established patent ownership and Lava's counter claim was admissible in light of the scheme of the Patents Act.

Ericsson's suit against Lava was based on eight SEPs in the following areas- Adaptive Multi-Rate (AMR) speech codec, Enhanced Data Rates for GSM Evolution (EDGE), Features in 3G.

Ericsson submitted that the suit patents were implemented by Lava in its devices. It was claimed that Ericsson offered to license its SEPs to Lava on FRAND terms and requested latter to enter into negotiations and discussions for obtaining license.

However, Ericsson said that despite its request to execute a FRAND license, Lava continued with its activities in India and failed to obtain any license from Ericsson on FRAND terms.

In the cross suit, Lava submitted that the patents in question were neither valid in terms of the Patents Act nor essential, and thus, there cannot be any claim of infringement.

It was also claimed that Ericsson failed to make a full and fair disclosure to Lava with regard to its SEPs and provide FRAND terms of licensing of its SEPs and accordingly, committed breach of its FRAND obligations.

The court held as valid seven SEPs asserted by Ericsson and found one to be invalid.

Justice Bansal held Lava to be an Unwilling Licensee due to its failure to negotiate with Ericsson in good faith, consistently delaying licensing negotiations, and failing to respond to offers or present any counteroffer.

In respect of damages, the court recognised that Ericsson was entitled to receive damages calculated based on the loss of royalty or license fees it would have received had Lava executed a FRAND license agreement at the commencement of its business operations.

“This approach aligns with legal precedents and ensures that the patent owner is compensated for the royalties they would have earned through licensing,” the court said.

It added that given the significant market for standardized products, it is hoped that in times to come India will become a leading neutral venue for global SEP resolution.

“Decree is passed in favour of Ericsson for the recovery of damages amounting to Rs. 244,07,63,990/- (Two hundred forty-four crores seven lakhs sixty-three thousand nine hundred and ninety only), along with interest @ 5% per annum from the date of this judgment until the full realization of the said amount,” the court ordered.

Counsel for Lava: Mr. Arun Kumar Varma, Senior Advocate with Mr. Abhay Raj Varma, Ms. Priyanka Ghosh and Mr. Arjun Rekhi, Advocates

Counsel for Respondent: Mr. Sandeep Sethi, Senior Advocate with Ms. Saya Choudhary Kapur, Mr. Ashutosh Kumar, Mr. Devanshu Khanna, Ms. Vrinda Bagaria, Mr. Vinod Chauhan, Ms. Radhika Pareva, Mr. Vivek Ranjan, Mr. Vikram Singh Dalal and Ms. Tanvi Tewari, Advocates

Title: LAVA INTERNATIONAL LIMITED v. TELEFONAKTIEBOLAGET LM ERICSSON and other connected matter

Citation: 2024 LiveLaw (Del) 406

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