In the ongoing patent battle between smartphone vendor Micromax and Ericsson, the Delhi High Court has ordered the former to pay royalties to the latter. These royalties amount to one percent of the selling price of Micromax s devices, Economic Times reports. Also Read - Micromax In 2b first impressions: A decent desi phone at budgetAlso Read - Micromax In 2b launched with 5000mAh battery, 6GB RAM in India: Check price, specs
This interim order is applicable till December 31, 2015, when the court has ordered to the end the trial. If this order is upheld, experts say that Micromax could end up having to pay as much as Rs 10 crore per month till that time. For the company this could mean having to give up on up to 20 percent of profits on these devices. Micromax has further said that it has operations overseas and when it plans to expand to other markets, it will negotiate royalty rates separately with Ericsson under global guidelines. Also Read - Micromax In 2b budget phone set to launch in India today: Expected specs and price
Last year, Ericsson had sued Micromax for Rs 100 crore in Delhi High Court alleging that the smartphone vendor had refused to enter into a licensing agreement covering its patented innovations across several wireless technology standards such as GSM, EDGE and third generation (3G).
While Ericsson has exited the mobile space, it is still one of the biggest patent holders alongside the likes of Nokia and Qualcomm among others. The patent battle with Micromax maybe the most high-profile case, but it has similar cases against the likes of Intex and Gionee.
The patents in question are a part of what are called standards-essential patents and holders are expected to license them on Free Reasonable and Non-Discriminatory (FRAND) terms. Though Micromax was said to have keen on negotiating a FRAND license with Ericsson, the companies could not come to a suitable conclusion. One of the primary reasons for not signing the agreement was that Micromax wanted to link the payment to the value of the chipset while the latter insisted that it be a share of the handset value as is the case globally.