In the matter of Nokia Technologies Oy vs Guangdong Oppo Mobile Telecommunications Corp Ltd., the Plaintiff, Nokia, sought direction from the Court to the Defendant, Oppo, under Order XXXIX Rule 10 of the CPC to deposit an amount with the Court at FRAND rates, which would represent the royalty for using the Plaintiff’s Standard Essential Patents (SEPs). Oppo had earlier obtained a first FRAND license agreement for utilizing Nokia’s SEPs, which expired in 2021. Oppo has not renewed the license Agreement or taken any fresh license from Nokia.
Alluding to the judgment of the UK Supreme Court of the United Kingdom in Unwired Planet International Ltd v Huawei Technologies (UK), the Delhi High Court clarified the criteria for paying out royalty based on SEPs, such as (i) whether the suit patent is in fact a SEP; (ii) whether the technology used by the Defendant infringes the SEP; (iii) whether the royalty rate at which the Plaintiff is willing to license comes under the ambit of FRAND and (iv) the Plaintiff has to establish that the Defendant is unwilling to take the license at the FRAND rate. Unless all these four factors coalesce, the Court cannot call upon a defendant to pay any amount as royalty to the plaintiff for obtaining a license from the plaintiff for exploiting the suit patents.
The Court was of the considered opinion that Nokia has not been able to make out a case of any direction to Oppo to make a deposit in terms of Order XXXIX Rule 10 of the CPC for reasons enumerated therein, few of which are mentioned below:
- The first FRAND license agreement was on cross-licensing basis. In the present application, Nokia does not even visualize, much less suggest, any cross-licensing arrangement; it merely seeks a unilateral deposit by Oppo.
- Absence of unequivocal admission, on Oppo’s part, of any specific liability for being permitted to exploit Nokia’s SEP portfolio.
- Oppo contested the very essentiality and validity of 2G, 3G and 4G patent portfolio of Nokia.
The Court also held that, both jurisprudentially and etymologically, there is a clear distinction between an admission and an offer. Amounts offered during negotiations unequivocally cannot be treated as admitted unless in the communications relating to such negotiations unequivocal admission of liability is found to exist. Further, the Court observed that amounts offered (during negotiations) can never constitute the basis for an order under Order XXXIX Rule 10, unless, with the offer, there is an unequivocal admission of liability. In the Court’s opinion, such unequivocal admission of liability was not found in the e-mail exchanges between Oppo and Nokia.
The Court dismissed the application filed by Nokia under Order XXXIX Rule 10 of the CPC.
The case citation can be found at: https://indiankanoon.org/doc/56297912/