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Delhi HC’s ban on sale of Xiaomi handsets is a bit too harsh

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The Delhi High court has just declared a ban on the sale of Xiaomi handsets in India after Ericsson accused the latter of infringing upon its patents. The court has restrained Xiaomi and its agents from making, assembling, importing or selling  its devices which infringe the mobile phone technology patented by Ericsson.

In less than a year after their launch in India, Xiaomi has become one of the biggest players in the smartphone industry, posing as a tough competitor to Samsung and Micromax. India has also become the second
largest market for Xiaomi after its home country China. The Delhi court’s judgement will be huge blow for Xiaomi that’s vowing the top position in India with a range of best-selling smartphones including the Redmi 1s, Mi 3 and the Redmi Note.

So does this mean an end of the Xiaomi era in India? Sorry Samsung, but the chances of a complete ban seem to be quite slim.

As the injunction was taken on an ex parte basis, Xiaomi was not given a chance to defend itself in court. But if we’ve learnt anything from past instances, Xiaomi is likely to reject the charges and file an appeal with the Delhi High Court, giving it the chance to negotiate terms with Ericsson.

Not only has the Delhi court taken a harsh action against Xiaomi by banning its devices in India, it’s done that by looking at just one side of the story. Instead of investigating the matter, the court has ordered a probe after the judgement has been made. Chances are that the ban would be applicable only until authorities finish the inspection and nail down the devices that infringe Ericsson’s patents or, the ban would be applied only on specific Xiaomi handsets.

Infringing upon Ericsson’s patents is not unique to Xiaomi. Big players including Micromax, Gionee, Intex and even Samsung and Acer have also been sued by Ericsson for using its patented technologies and yet, they continue to sell their devices freely across the globe.

In early 2013, Ericsson sued Micromax for infringing eight of its patents for a range of wireless technologies, including 3G, AMR and Edge. The Delhi High Court had then granted an ex-parte interim injunction similar to how it has handled the case with Xiaomi. Instead of a ban, the Delhi High court ordered Micromax to pay a percent of sales in the form of royalties for each phone that uses Ericsson’s technologies until December 2015.

In its defence, Micromax accused Ericsson of failing to adhere to global commitments on providing its industry-essential patents to handset makers under its fair, reasonable
and non-discriminatory (FRAND) terms. Considering the fact that Ericsson is no longer a player in the handset industry, it has a lot to gain from the royalties it earns from manufacturers using its patented technologies. So a complete ban on Xiaomi in India would also hurt Ericsson’s chances of earning through royalties.

Similarly, Ericsson also sought a ban on Samsung products in the US two years ago for 24 patent infringements. One of these include the technology used in translating speech into digital information and back, which is now basic for every mobile phone. These essential technologies are governed by patents that come under Standard, Essential Patents (SEPs). As with most companies, Samsung refused to pay the fees because Ericsson was reportedly asking for unreasonable amounts as royalties.

Xiaomi’s case is no different. The company is said to have infringed upon SEPs, which are subject to Fair, Reasonable and Non-Discriminatory(FRAND) terms. Big players, including Apple and Samsung have both become victims as well been guilty of SEP abuse, which are used to stymie one another in the highly competitive mobile market.

We hope that the Delhi High court revisits its decision to ban Xiaomi devices, while also making sure that tech firms do not use SEPs as weapons to bully manufacturers into paying obscene amounts in royalties.

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