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The Competition Commission of India (CCI) will undertake a probe to see if Swedish mobile infrastructure player Ericsson is indulging in anti-competitive practices.
CCI is acting on a plaint by home-grown handset major Micromax, which had sought a probe against Ericsson for allegedly demanding unfair, discriminatory and exorbitant royalty for its patent regarding GSM technology.
Micromax said it had received a notice from Ericsson in 2009 alleging that it had infringed on Ericsson’s essential GSM patent and demanded that the former secure licences of these patents on fair, reasonable and non-discriminatory terms (FRAND terms). Micromax said no detail of the patents so infringed by it was provided by Ericsson.
Ericsson sent a similar notice in 2011 as well and demanded Micromax secure FRAND licence. Micromax said it had sought details several times but the same was not provided by Ericsson.
Sole licensor
It entered into a non-disclosure agreement with Ericsson in 2012, following which it was asked to accept the terms with a specified time period, failing which it will be construed as refusal to sign FRAND.
Micromax said Ericsson had abused its dominant position by imposing exorbitant royalty rates for standard essential patents as it was aware that there was no alternate technology available and it was the sole licensor globally.
According to industry experts, royalty payments for such patents can be up to 2 per cent. Considering that a smartphone involves around 2 lakh patents, royalty on each would make the proposition costly for players like Micromax
CCI said: “The Commission is of the opinion that it was a fit case for thorough investigation by DG into allegation made by the informant and violation if any of the provision of the Competition Act.”
Earlier this year, Ericsson sued Micromax for patent infringement, claiming Rs 100 crore in damages.
“We are aware that Micromax has filed their response in our ongoing lawsuit in India, where we sued them for patent infringement in March 2013,” said an Ericsson spokesperson.
“For a long period of time, Ericsson has made numerous attempts to sign a licence agreement with Micromax on FRAND terms. As this is an on-going litigation we cannot comment any further.”
Patent fights between phone makers have intensified globally as vendors strive to make their offering different. Recently, Europe’s antitrust authority charged Google’s Motorola Mobility unit with abusive enforcement of its rights over a technology essential for the rest of the smartphone industry.
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