iBall under FRAND scanner

The mundanity of our lives is ruled by the monotony of the usage of technological devices — smartphones operating over 3G/4G networks, laptops using Wi-Fi, or even the now omnipresent earphones playing music from MP3/MP4/iPod devices. For any function, nevertheless, the technical intricacy involved within each cog has to work together, implying that these technological devices naturally need to fulfil certain standards, i.e. in common legal parlance,procedures by which devices connect with each other and other technological know-how and expertise in order to accomplish their functionality.

These protocols, in turn, could entwine hordes or numerous numbers of patents which cover or claim parts thereof of the technology which when pooled together make the said devices work.

A patent that governs any part of the technology used in a standard is called a standard-essential patent (SEP). Though these standards are pivotal to the modern world, they position challenging patent-licensing problems. The same was outlined in a recent decision, the Hon’ble Delhi high court refrained iBall, from importing mobile handsets and tablets, via an interim order effective until the Court’s next hearing on this matter. This was because the products were surreptitiously infringing upon the essential patents of Ericsson, the Swedish telecom gear making giant. They had even indicted iBall for neglecting to sign a license agreement with regard to standard-essential patents covering wireless technologies. iBall which ranks as one of top tablet brands in India has a 14.9% market share in Q2, followed by Samsung at 13.8%, Micromax at 12% and Xiaomi at 9.5%.[i] Apart from tablets its business also ventures in smartphones, laptops as well as wireless routers.

The Court stated in this matter stated that, this interim order was of high pertinence, adding in hindsight that, Ericsson was sure to face irreparable loss and injury otherwise. He further remarked that this would prove as a deterrent in terms of the fact that iBall would not market mobile phones without paying heed to the Fair, Reasonable and Non-Discriminatory Agreement [FRAND] or paying royalty. The FRAND Agreement enshrines licensing obligations often required by standards organizations for members that participate in the standard-setting process.

Standard-setting organizations are the industry groups that set communal standards for a specific industry so as to certify congruency and inter-serviceability of devices produced by different companies. In simple terms industry players have to agree to make their intellectual property accessible, say by way of licenses, to everyone or possible licensees, to use their intellectual property, in this case patented technology. In the present case, iBall had purportedly not made any attempt to pursue Ericsson in this regard, before tailing off with the decision of marketing and distribution of their products.

Evidently, Ericsson has always been very rigorous with regard to the protection of its SEP’s. In December 2014, Ericsson had filed a complaint against Chinese smartphone giant, Xiaomi, as the latter had blundered by not answering six patent royalty requests made by the pervasive, Ericsson. This resulted in a ban on the sale and import of the Xiaomi phones in India, which are powered by the Taiwanese chipmaker, MediaTek. Early this year, in February, a Court had stated that it would investigate the allegations claimed by Ericsson against Xiaomi, as the latter was irate with the given ban.

Only time will tell as to how testing the iBall negotiations will be in future.