TELEFONKTIEBOLAGET LM ERICSSON(PUBL) vs LAVA INTERNATIONAL LTD

2024-03-28 Information

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment Reserved on: 30th May, 2023
Judgment Delivered on: 28th March, 2024

+ CS(COMM) 65/2016

LAVA INTERNATIONAL LIMITED ….. Plaintiff
Through: Mr. Arun Kumar Varma, Senior Advocate with Mr. Abhay Raj Varma, Ms. Priyanka Ghosh and Mr. Arjun Rekhi, Advocates with Mr. Nishant Nandan and Mr. Kush Srivastava, Authorised Representatives.
versus

TELEFONAKTIEBOLAGET LM ERICSSON ….. Defendant
Through: Mr. Sandeep Sethi, Senior Advocate with Ms. Saya Choudhary Kapur, Mr. Ashutosh Kumar, Mr. Devanshu Khanna, Ms. Vrinda Bagaria, Mr. Vinod Chauhan, Ms. Radhika Pareva, Mr. Vivek Ranjan, Mr. Vikram Singh Dalal and Ms. Tanvi Tewari, Advocates.

+ CS(COMM) 1148/2016 and CC(COMM) 14/2017

TELEFONAKTIEBOLAGET LM ERICSSON(PUBL) ….. Plaintiff
Through: Mr. Sandeep Sethi, Senior Advocate with Ms. Saya Choudhary Kapur, Mr. Ashutosh Kumar, Ms. Vrinda Bagaria, Mr. Devanshu Khanna, Mr. Vinod Chauhan, Ms. Radhika Pareva, Mr. Vivek Ranjan, Mr. Vikram Singh Dalal and Ms. Tanvi Tewari, Advocates.
versus

LAVA INTERNATIONAL LTD ….. Defendant
Through: Mr. Arun Kumar Varma, Senior Advocate with Mr. Abhay Raj Varma, Ms. Priyanka Ghosh and Mr. Arjun Rekhi, Advocates with Mr. Nishant Nandan and Mr. Kush Srivastava, Authorised Representatives.

CORAM:
HON’BLE MR. JUSTICE AMIT BANSAL
JUDGMENT
1.INTRODUCTION ……………………………………………………………………………………………………………..8
2.BRIEF FACTUAL MATRIX ………………………………………………………………………………………………… 12
2.1. BACKGROUND OF PROCEEDINGS IN THE TWO SUITS …………………………………………………………………….. 14
2.2. RECORDING OF EVIDENCE …………………………………………………………………………………………………… 22
2.3. FINAL HEARING ……………………………………………………………………………………………………………….. 24
3.WHETHER ERICSSON IS THE OWNER OF THE SUIT PATENTS. ……………………………………………….. 24
4.WHETHER COUNTER CLAIM FILED BY LAVA IS BARRED. ……………………………………………………… 27
5.WHETHER ERICSSON IS ENTITLED TO PERMANENT INJUNCTION. ………………………………………… 27
6.INVALIDITY OF THE SUIT PATENTS ………………………………………………………………………………….. 28
6.1. THE INVENTIONS CLAIMED BY ERICSSON IN THE SUIT PATENTS ARE MERE ALGORITHMS. …………………………….. 31
6.1.1. Submissions on Behalf of the Parties …………………………………………………………………….. 32
6.1.2. Legal Provisions and Guidelines……………………………………………………………………………. 35
6.1.3. Judicial Precedents …………………………………………………………………………………………….. 39
6.1.4. Evidence Led by the Parties …………………………………………………………………………………. 44
6.2. THE INVENTIONS CLAIMED IN THE SUIT PATENTS ARE NOT NOVEL AND DO NOT INVOLVE ANY INVENTIVE STEP. …. 46
6.2.1. Submissions on Behalf of the parties …………………………………………………………………….. 46
6.2.2. Legal Provisions and Significant Rulings ………………………………………………………………… 47
6.2.3. Lack of Novelty Legal Principles …………………………………………………………………………. 49
6.2.3.1. Seven Stambhas Approach …………………………………………………………………………………………… 55
6.2.4. Lack of Inventive Step Legal Principles ……………………………………………………………….. 57
6.2.5. Expertise/Credibility of the Witnesses of Both Sides ……………………………………………….. 65
6.3. THE SPECIFICATIONS OF THE SUIT PATENTS DO NOT SUFFICIENTLY OR FAIRLY DESCRIBE THE INVENTION OR THE BEST METHOD BY WHICH THE CLAIMED INVENTION IS TO BE PERFORMED OR IMPLEMENTED. ………………………………………. 65
6.3.1. Submissions on Behalf of the parties …………………………………………………………………….. 66
6.3.2. Legal Provisions and Significant Rulings ………………………………………………………………… 66
6.3.3. Evidence Led on Behalf of The Parties …………………………………………………………………… 68
6.3.4. Analysis And Findings …………………………………………………………………………………………. 73
6.4. THE SUIT PATENTS WERE OBTAINED BY MAKING MISREPRESENTATIONS TO THE PATENT OFFICE. ………………….. 73
6.4.1. Submissions on Behalf of the Parties …………………………………………………………………….. 73
6.4.2. Legal Provisions and Significant Rulings ………………………………………………………………… 74
6.4.3. Analysis and Findings …………………………………………………………………………………………. 78
7.INVALIDITY OF IN 203034 ……………………………………………………………………………………………… 79
7.1. CLAIM CONSTRUCTION ………………………………………………………………………………………………………. 80
7.2. PATENTABILITY OF THE CLAIMS ……………………………………………………………………………………………… 82
7.2.1. Evidence Led on Behalf of Lava ……………………………………………………………………………. 82
7.2.2. Evidence Led on Behalf of Ericsson ……………………………………………………………………….. 87
7.2.3. Analysis and Findings …………………………………………………………………………………………. 89
7.3. CHALLENGE TO THE NOVELTY OF IN 203034 ……………………………………………………………………………. 96
7.3.1. Prior Art: G.729 ………………………………………………………………………………………………….. 96
7.3.1.1. Analysis and Findings: G.729 ………………………………………………………………………………………… 96
7.4. CONCLUSION ………………………………………………………………………………………………………………….. 99
8.INVALIDITY OF IN 203036 ……………………………………………………………………………………………… 99
8.1. CLAIM CONSTRUCTION …………………………………………………………………………………………………….. 100
8.2. PATENTABILITY ………………………………………………………………………………………………………………. 106
8.2.1. Evidence Led on Behalf of Lava ………………………………………………………………………….. 106
8.2.2. Evidence Led on Behalf of Ericsson ……………………………………………………………………… 112
8.2.3. Analysis and Findings ……………………………………………………………………………………….. 114
8.3. CHALLENGE TO THE NOVELTY OF IN 203036 ………………………………………………………………………….. 118
8.3.1. Prior Art: G.729 ………………………………………………………………………………………………… 119
8.4. CHALLENGE TO THE INVENTIVE STEP OF IN 203036 ………………………………………………………………….. 121
8.4.1. Prior Art: ETS 300 726 (1996) …………………………………………………………………………….. 121
8.4.2. Prior Art: Schroeder ………………………………………………………………………………………….. 124
8.4.3. Findings on Prior Arts ……………………………………………………………………………………….. 126
8.5. CONCLUSION ………………………………………………………………………………………………………………… 127
9.INVALIDITY OF IN 234157 ……………………………………………………………………………………………. 127
9.1. CLAIM CONSTRUCTION …………………………………………………………………………………………………….. 131
9.2. PATENTABILITY ………………………………………………………………………………………………………………. 134
9.2.1. Submissions of the Parties …………………………………………………………………………………. 134
9.2.2. Analysis and Findings ……………………………………………………………………………………….. 136
9.3. CHALLENGE TO THE NOVELTY OF IN 234157 …………………………………………………………………………… 138
9.3.1. Prior Art: G.729 ……………………………………………………………………………………………….. 138
9.4. CHALLENGE TO THE INVENTIVE STEP IN IN 203034 …………………………………………………………………… 141
9.4.1. Prior Art: Anil Ubale ………………………………………………………………………………………….. 141
9.4.2. Prior art: McElroy …………………………………………………………………………………………….. 144
9.4.3. Prior Art: ETS 300 726 ……………………………………………………………………………………….. 147
9.4.4. Prior Art: Zinser ………………………………………………………………………………………………… 150
9.4.5. Findings on Prior Arts ……………………………………………………………………………………….. 153
9.5. CONCLUSION ………………………………………………………………………………………………………………… 154
10.INVALIDITY OF IN 203686 ……………………………………………………………………………………………. 154
10.1. CLAIM CONSTRUCTION………………………………………………………………………………………………… 155
10.2. PATENTABILITY …………………………………………………………………………………………………………. 159
10.2.1. Submissions of the Parties …………………………………………………………………………………. 159
10.2.2. Evidence Led on Behalf of the Parties ………………………………………………………………….. 161
10.2.3. Analysis and Findings ……………………………………………………………………………………….. 163
10.3. CHALLENGE TO THE NOVELTY OF IN 203686 ……………………………………………………………………… 164
10.3.1. Prior Art: Milnor ……………………………………………………………………………………………….. 165
10.3.2. Prior Art: IEEE 802.11 Standard, 1997 …………………………………………………………………. 168
10.3.3. Prior Art: WO549 …………………………………………………………………………………………….. 172
10.3.3.1. Submissions of Lava: WO549 ……………………………………………………………………………….. 174
10.3.3.2. Submissions of Ericsson: WO549 ………………………………………………………………………….. 175
10.3.3.3. Analysis and Findings: WO549 ……………………………………………………………………………… 176
10.4. CHALLENGE TO THE INVENTIVE STEP IN IN 203686 ………………………………………………………………. 180
10.4.1. Prior Art: WO549 …………………………………………………………………………………………….. 181
10.4.1.1. Submissions of Lava: WO549 ……………………………………………………………………………….. 181
10.4.1.2. Submissions of Ericsson: WO569 ………………………………………………………………………….. 182
10.4.1.3. Analysis and Findings: WO549 ……………………………………………………………………………… 183
10.4.2. Prior Art: DW1/23 …………………………………………………………………………………………….. 184
10.4.2.1. Submissions and Evidence of Lava: DW1/23 ……………………………………………………………. 184
10.4.2.2. Submissions and Evidence of Ericsson: DW1/23 ………………………………………………………. 188
10.4.2.3. Analysis: DW-1/23 ……………………………………………………………………………………………….. 190
10.4.3. Findings on Prior Arts ……………………………………………………………………………………….. 193
10.5. CONCLUSION……………………………………………………………………………………………………………. 194
11. INVALIDITY OF IN 213723 ……………………………………………………………………………………………. 194
11.1. CLAIM CONSTRUCTION………………………………………………………………………………………………… 197
11.2. PATENTABILITY …………………………………………………………………………………………………………. 198
11.2.1. Submissions of Lava ………………………………………………………………………………………….. 198
11.2.2. Submissions of Ericsson …………………………………………………………………………………….. 200
11.2.3. Discussion on Patentability of IN723 ………………………………………………………………….. 201
11.2.4. Evidence Led on Behalf of the Parties ………………………………………………………………….. 202
11.2.5. Analysis and Findings ……………………………………………………………………………………….. 204
11.3. CHALLENGE TO THE NOVELTY AND INVENTIVE STEP IN IN 213723 ……………………………………………… 206
11.3.1. Prior Art: GSM 06.31 …………………………………………………………………………………………. 207
11.3.1.1. Comparison of Prior Art 06.31 with Patent IN 213723………………………………………………. 208
11.3.2. Prior Art: GSM 06.12 …………………………………………………………………………………………. 209
11.3.2.1. Comparison of GSM 06.12 with Patent IN 213723 …………………………………………………… 210
11.3.3. Comparison with D4 …………………………………………………………………………………………. 210
11.3.3.1. Comparison with Patent IN 213723: ………………………………………………………………………. 212
11.3.4. Findings on Prior Art …………………………………………………………………………………………. 212
11.4. CONCLUSION……………………………………………………………………………………………………………. 213
12. INVALIDITY OF IN 240471 ……………………………………………………………………………………………. 213
12.1. CLAIM CONSTRUCTION………………………………………………………………………………………………… 216
12.2. PATENTABILITY …………………………………………………………………………………………………………. 221
12.3. CHALLENGE TO THE NOVELTY OF IN 240471 ……………………………………………………………………… 222
12.3.1. Prior Art: Daniel Wong ……………………………………………………………………………………… 222
12.4. CHALLENGE TO THE INVENTIVE STEP IN IN 240471 ………………………………………………………………. 224
12.4.1. Prior Art: Blakeney ……………………………………………………………………………………………. 225
12.4.2. Prior Art: Srinivasan ………………………………………………………………………………………….. 228
12.4.3. Prior Arts: DW-1/40 and DW-1/41 ……………………………………………………………………… 231
12.5. CONCLUSION……………………………………………………………………………………………………………. 235
13. INVALIDITY OF IN 229632 ……………………………………………………………………………………………. 235
13.1. CLAIM CONSTRUCTION………………………………………………………………………………………………… 236
13.2. PATENTABILITY …………………………………………………………………………………………………………. 242
13.2.1. Submissions and Evidence of the Parties ……………………………………………………………… 242
13.2.2. Analysis and Findings ……………………………………………………………………………………….. 244
13.3. CHALLENGE TO THE NOVELTY OF IN 229632 ……………………………………………………………………… 246
13.3.1. Prior Art: Mobiware ………………………………………………………………………………………….. 246
13.4. CHALLENGE TO THE INVENTIVE STEP IN IN 229632 ………………………………………………………………. 251
13.4.1. prior art: D1 …………………………………………………………………………………………………….. 251
13.4.2. prior art: D2 …………………………………………………………………………………………………….. 253
13.5. CONCLUSION……………………………………………………………………………………………………………. 256
14. INVALIDITY OF IN 241747 ……………………………………………………………………………………………. 256
14.1. CLAIM CONSTRUCTION………………………………………………………………………………………………… 258
14.2. PATENTABILITY …………………………………………………………………………………………………………. 262
14.2.1. Evidence of Lava ………………………………………………………………………………………………. 262
14.2.2. Evidence of Ericsson ………………………………………………………………………………………….. 264
14.2.3. Analysis and Findings ……………………………………………………………………………………….. 266
14.3. CHALLENGE TO THE NOVELTY OF IN 241747 ……………………………………………………………………… 267
14.4. CHALLENGE TO THE INVENTIVE STEP OF IN 241747 ……………………………………………………………… 270
14.4.1. Prior Art: Al-Zoman …………………………………………………………………………………………… 271
14.4.2. Prior Art: Joel Morris …………………………………………………………………………………………. 275
14.4.3. Prior Art: US 5559810 ……………………………………………………………………………………….. 278
14.4.4. Prior Art: Kousa ……………………………………………………………………………………………….. 281
14.4.5. Findings on the prior arts ………………………………………………………………………………….. 283
14.5. CONCLUSION……………………………………………………………………………………………………………. 285
15. INFRINGEMENT………………………………………………………………………………………………………….. 285
15.1. BACKGROUND ………………………………………………………………………………………………………….. 285
15.2. SUBMISSIONS ON BEHALF OF ERICSSON …………………………………………………………………………….. 286
15.3. SUBMISSIONS ON BEHALF OF LAVA ………………………………………………………………………………….. 288
15.4. WHETHER DECLARATIONS FILED BY ERICSSON BEFORE ETSI WERE PROPER. …………………………………. 290
15.4.1. ETSI IPR Policy ………………………………………………………………………………………………….. 290
15.4.2. Submissions on Behalf of Lava……………………………………………………………………………. 292
15.4.3. Submissions on Behalf of Ericsson ………………………………………………………………………. 293
15.4.4. Legal Position: Nature of Declarations ………………………………………………………………… 295
15.4.5. Admissibility of ETSI declarations filed by Ericsson ………………………………………………… 296
15.4.6. Legal Position: Time Line for Declarations ……………………………………………………………. 299
15.4.7. Evidence Led by the Parties ……………………………………………………………………………….. 301
15.4.8. Analysis and Findings ……………………………………………………………………………………….. 304
15.4.9. Implied Waiver ………………………………………………………………………………………………… 311
15.5. ESSENTIALITY OF THE SUIT PATENTS ………………………………………………………………………………… 312
15.5.1. Relevant Clauses of The ETSI IPR Policy ……………………………………………………………….. 312
15.5.2. Judicial Precedents …………………………………………………………………………………………… 313
15.5.3. Correspondence Exchanged Between The Parties …………………………………………………. 314
15.5.4. Admissions by Lava …………………………………………………………………………………………… 317
15.5.5. Evidence Led by the Parties ……………………………………………………………………………….. 318
15.5.6. Analysis and Findings ……………………………………………………………………………………….. 327
15.6. INFRINGEMENT OF THE SUIT PATENTS ………………………………………………………………………………. 328
15.6.1. Doctrine of Exhaustion ……………………………………………………………………………………… 328
15.6.1.1. Submissions on Behalf of the Parties ……………………………………………………………………… 329
15.6.1.2. Legal Provisions …………………………………………………………………………………………………… 330
15.6.1.3. Evidence Led on Behalf of the Parties and Analysis ………………………………………………….. 332
15.6.2. High Court of Delhi Rules Governing Patent Suits, 2022 ………………………………………… 339
15.6.3. Two-Step Test for Establishing Infringement ………………………………………………………… 341
15.6.4. Admissions Made by Lava …………………………………………………………………………………. 343
15.6.5. Analysis and Findings ……………………………………………………………………………………….. 345
16. FRAND ……………………………………………………………………………………………………………………… 351
16.1. BACKGROUND ………………………………………………………………………………………………………….. 352
16.2. INTRODUCTION TO FRAND ………………………………………………………………………………………….. 352
16.3. THE FRAND COMMITMENT …………………………………………………………………………………………. 354
16.4. SIGNIFICANT INTERNATIONAL RULINGS ON FRAND ………………………………………………………………. 356
16.5. WITNESSES ON BEHALF OF BOTH THE PARTIES …………………………………………………………………….. 362
16.6. WHETHER LAVA NEGOTIATED WITH ERICSSON IN GOOD FAITH ………………………………………………… 362
16.6.1. Correspondence exchanged between the parties ………………………………………………….. 362
16.6.2. Analysis of Correspondence and Evidence Led on Behalf of the Parties ……………………. 371
16.6.3. Conclusion ………………………………………………………………………………………………………. 380
16.7. CAN FRAND RATE BE USED AS A MEASURE OF DAMAGES ………………………………………………………. 380
16.7.1. Submissions on Behalf of The Parties ………………………………………………………………….. 380
16.7.2. Legal Provisions and Judicial Precedents ……………………………………………………………… 381
16.7.3. Evidence Led by the Parties ……………………………………………………………………………….. 382
16.7.4. Analysis and Findings ……………………………………………………………………………………….. 384
16.7.5. Application of Filters in Calculating FRAND Rates …………………………………………………. 384
16.8. WHETHER DAMAGES CAN BE GRANTED ONLY FOR TESTED DEVICES …………………………………………… 385
16.9. WHETHER DAMAGES CAN BE GRANTED ONLY ON THE BASIS OF THE SMALLEST SALEABLE PATENT PRACTISING UNIT (SSPPU) ………………………………………………………………………………………………………………………… 386
16.9.1. Submissions on Behalf of the Parties …………………………………………………………………… 386
16.9.2. Judicial Precedents …………………………………………………………………………………………… 387
16.9.3. Evidence Led by the Parties ……………………………………………………………………………….. 393
16.9.4. Analysis and Findings ……………………………………………………………………………………….. 397
16.10. WHETHER DAMAGES CAN BE GRANTED ONLY FOR ASSERTED SUIT PATENTS AND NOT FOR THE ENTIRE PORTFOLIO …………………………………………………………………………………………………………………………… 397
16.10.1. Submissions on Behalf of the Parties ……………………………………………………………… 397
16.10.2. Judicial Precedents ………………………………………………………………………………………. 398
16.10.3. Evidence Led by the Parties …………………………………………………………………………… 402
16.10.4. Analysis and Findings …………………………………………………………………………………… 408
16.11. WHETHER COMPARABLE LICENSING APPROACH CAN BE PREFERRED FOR CALCULATION OF DAMAGES ……. 410
16.11.1. Submissions on Behalf of the Parties ……………………………………………………………… 410
16.11.2. Judicial Precedents ………………………………………………………………………………………. 410
16.11.3. Evidence Led by the Parties …………………………………………………………………………… 412
16.11.4. Analysis and Findings …………………………………………………………………………………… 416
16.12. WHETHER SIPROLABS LICENSING PROGRAM FOR WCDMA SEPS IS RELEVANT TO THIS CASE. …………. 417
16.12.1. About Siprolab ……………………………………………………………………………………………. 418
16.12.2. Submissions On Behalf of the Parties on SIPROLAB Licensing program……………….. 418
16.12.3. Evidence of Lava in Respect of SIPROLAB Licensing Program …………………………… 419
16.12.4. Analysis and Findings …………………………………………………………………………………… 424
16.13. WHETHER ERICSSONS OFFER TO LICENSE THE PORTFOLIO OF PATENTS RESULTS IN HOLD UP OR ROYALTY STACKING …………………………………………………………………………………………………………………………… 428
16.13.1. Introduction ……………………………………………………………………………………………….. 428
16.13.2. Submissions On Behalf of the Parties ……………………………………………………………… 429
16.13.3. Judicial Precedents ………………………………………………………………………………………. 429
16.13.4. Evidence led by the Parties …………………………………………………………………………… 431
16.13.5. Analysis and Findings …………………………………………………………………………………… 432
16.13.6. Whether Lavas conduct leads to hold-out. …………………………………………………….. 433
16.14. WHETHER THE LICENSES FILED ON BEHALF OF ERICSSON ARE COMPARABLE LICENSES. ……………………… 435
16.14.1. Submissions on behalf of the parties ……………………………………………………………… 435
16.14.2. Judicial Precedents ………………………………………………………………………………………. 436
16.14.3. Evidence Led by the Parties …………………………………………………………………………… 438
16.14.4. Redacted Copies of the Agreements and Affidavit Provided to Shankar Iyer (DW-4) 443
16.14.5. Analysis and Findings …………………………………………………………………………………… 445
16.15. WHETHER OFFERS MADE BY ERICSSON TO LAVA WERE WITHIN FRAND RANGE. …………………………… 446
16.15.1. Submissions on behalf of the parties ……………………………………………………………… 446
16.15.2. Evidence Led by the Parties …………………………………………………………………………… 446
16.15.3. Analysis and Findings …………………………………………………………………………………… 450
17.WHETHER DAMAGES CAN BE GRANTED ONLY FOR THREE YEARS PRIOR TO FILING OF THE SUIT. .. ……………………………………………………………………………………………………………………………….. 451
17.1. SUBMISSIONS ON BEHALF OF THE PARTIES …………………………………………………………………………. 451
17.2. LEGAL PROVISIONS …………………………………………………………………………………………………….. 453
17.3. ANALYSIS AND FINDINGS ……………………………………………………………………………………………… 454
18.CALCULATION OF DAMAGES ………………………………………………………………………………………… 456
19.COSTS ………………………………………………………………………………………………………………………. 460
19.1. LEGAL PRINCIPLES FOR DETERMINATION OF COSTS ……………………………………………………………….. 460
19.2. ANALYSIS AND FINDINGS ……………………………………………………………………………………………… 463
20.RELIEF ………………………………………………………………………………………………………………………. 464
21.SUMMARY OF JUDGMENT …………………………………………………………………………………………… 466
22.POSTSCRIPT ………………………………………………………………………………………………………………. 475

1.
The evolution of mobile telecommunication in India has made anindispensable contribution to the democratisation of access to informationand digital services, bringing about profound changes in how peoplecommunicate, transact, and access information. It set the stage for a moreconnected and digitally empowered India, as we continue to embrace newertechnologies in the coming years. Therefore, mobile telecommunication inIndia has been marked by rapid growth, increased mobile penetration andsignificant technological advancements.

2.
The evolution of mobile phones has been a remarkable journey oftechnological advancement. Starting from the bulky and analogue mobilephones of the 1990s, we have witnessed a transition to sleek andmultifunctional smartphones with powerful computing capabilities.Alongside this, telecommunications networks have evolved from basicvoice-only systems like 2G with moderate internet capabilities in the form ofGPRS and EDGE, to high-speed data networks like 3G, 4G LTE and 5G,enabling seamless communication, wider internet access and a myriad ofapplications. This evolution has not only transformed the way we connectwith each other but has also reshaped industries, economies, and societies byfostering global connectivity and enabling innovations that were onceunimaginable.

3.
This transformative journey of mobile phones and telecom networkshas been supported by the development and implementation of Standards.Standards are defined as agreed-upon specifications or protocols thatensure products, services and systems are compatible and interoperableacross various environments and technologies. Standards have facilitated the

seamless integration of new technologies, such as the transition from 2G to
3G, 4G LTE, and now 5G. This enables devices to communicate more effectively, support a wider range of applications, and provide users with faster, more reliable internet access. Moreover, the standardization has played a pivotal role in ensuring that innovations in mobile technology can be adopted universally, allowing consumers worldwide to benefit from the latest advancements. This foundational work paves the way for Standard Setting Organizations (SSOs) to continue shaping the future of telecommunications, ensuring that the industry remains cohesive, forward-looking and universally accessible.

4.
SSOs such as European Telecommunication Standards Institute (ETSI), Institute of Electrical and Electronics Engineers (IEEE), International Telecommunication Union (ITU), Bureau of Indian Standards (BIS) and Telecommunications Standards Development Society, India (TSDSI) set technological standards for the telecommunications industry including standards that are relevant to interoperability of mobile phone devices with telecommunication networks. Telecommunication devices such as cellular phone, handsets, tablets and dongles, which have certain components embedded in them to enable them to work on 2G/3G/4G/5G networks worldwide. The manufacturers of the aforesaid devices are required to comply with these technical standards. This is said to be possible only by a certain set of patents referred to as Standard Essential Patents (SEPs).

5.
SEPs are patents that are deemed essential for the implementation of a particular industry standard, such as those used in telecommunication,

electronics or other technology sectors. These patents are typically assigned
in the name of companies and individuals who have contributed to the development of a standard and they are considered essential because any product or technology complying with that standard must incorporate that patented technology. In short, when a patent covers a particular component/element/device/method corresponding to a technical specification for a technology that forms a part of a standard, such a patent is regarded as an SEP for such standard. SEPs play a crucial role in promoting interoperability, competition and innovation within industries that rely on technical standards, while also ensuring that the patent holders are adequately compensated for their contributions to these standards.

6.
It is important to note that not all patents related to a standard becomeSEPs and only those patents that are deemed essential for implementing thestandard are classified as SEPs. The assignees of SEPs commit to certainlicensing obligations that are referred to as FRAND terms, i.e., fair,reasonable and non-discriminatory terms. The process of determiningessentiality and adherence to FRAND terms is essential to ensure that SEPscontribute to interoperability, competition and innovation within an industrywhile avoiding monopolistic practices or unfair licensing practices.

7.
A patentee typically declares a patent to be an SEP through a formaldeclaration process, which involves notifying relevant SSO or in some casesindustry consortiums of the patents essentiality to a particular standard.Thus, an SEP can be said to be a patent that corresponds to an industrystandard. Such a standard is mutually agreed by various service providers,equipment manufacturers and in some cases sectoral regulators and is

mandatorily implemented for a particular technology. Such standards are
also recognised and implemented by the governments of the countries. For instance, the Department of Telecommunications, India (DoT), has recognized ETSI standards and ITU, TEC, 3GPP, 3GPP2, IETF, ANSI, EIA, TIA, and IS standards as approved standards for GSM, WCDMA, UMTS, and EDGE network and equipment providers and as a consequence, the same are required to be complied with by various device importers, manufacturers and sellers. This is meant to ensure that complete compatibility and interoperability is achieved.

8.
In many cases, the manufacturers and sellers of the aforesaid devices are in a peculiar situation where they are compelled to ensure that their devices conform with international standards governing the manufacture of devices. The said compliance is possible only by using technologies, for which patents are held by other companies. Recognizing the effects of such a monopoly, SSOs require that in addition to disclosure of patents/patent applications prior to the adoption of a standard, its members undertake to grant irrevocable licenses to all implementers/users of the standards on FRAND terms.

9.
In light of the aforesaid, various elements, components, products, technologies, apparatus that correspond to these standards are implemented by entities manufacturing and selling devices, which comply with GSM/WCDMA/UMTS standards related to 2G, EDGE and 3G networks.

10.
With this background, I shall now proceed to decide both the captioned cross suits, i.e., CS(COMM) 65/2016, filed on behalf of Lava International Limited (hereinafter referred to as Lava) and

CS(COMM)1148/2016
, filed on behalf Telefonaktiebolaget LM Ericsson (hereinafter referred to as Ericsson).

2. BRIEF FACTUAL MATRIX
11.
Ericsson is engaged in the business of designing and manufacturing telecommunications equipment, setting up telecommunication networks and driving innovation in the field of telecommunications, data communications and mobile networks.

12.
Ericsson claims to have a global portfolio of patents, a large number of which are SEPs, that are also used in implementation of various standards set by the ETSI and other SSOs. Ericssons business involves licensing those patents to companies manufacturing and selling telecommunications equipment such as mobile phones and infrastructure. Ericssons suit against Lava, i.e., CS(COMM)1148/2016 is based on infringement of eight SEPs relating to the following technology areas:

i.
Adaptive Multi-Rate (AMR) speech codec Codec that conserves use of bandwidth and enhances speech quality (AMR). AMR is used mandatorily in 3G enabled phones and at the option of an implementer/manufacturer in 2G enabled phones.

ii.
Enhanced Data Rates for GSM Evolution (EDGE) A transceiving unit for block automatic retransmission request (EDGE). EDGE is used in 2G standard compliant devices at the option of an implementer.

iii.
Features in 3G Multi service handling by a single mobile station and a mobile radio for use in a mobile radio communication system (3G).

13.
Ericsson claims to be the registered owner of the eight suit patents that are the subject matter of the present suit. Five of the said patents bearing numbers IN 203034, IN 203036, IN 234157, IN 203686 and IN 213723 are referred to as the AMR Patents as according to Ericsson they are essential for implementing the AMR Standard. The patent bearing number IN 241747 is referred to as the EDGE Patent as the same is stated to be essential for implementing the EDGE standard and the patents bearing numbers IN 229632 and IN 240471 are referred to as the 3G Patents as the said patents are stated to be essential to the 3G standard.

14.
Lava is an Indian company, which is engaged in the business of selling mobile phones, dongles, storage devices and tablets. As stated by Lava, the aforesaid products are primarily manufactured in China and are subsequently imported to India.

15.
It is pleaded by Ericsson that the suit patents are implemented by Lava in the aforesaid devices sold by Lava. Further, the AMR Patents as well as the EDGE Patent, correspond to optional, but widely implemented portions of the 2G standard.

16.
It is the case of Ericsson that Ericsson offered to license its SEPs to Lava on FRAND terms and requested Lava to enter into negotiations and discussions for obtaining license. However, despite Ericssons request to execute a FRAND license, Lava continued with its activities in India and failed to obtain any license from Ericsson on FRAND terms qua Ericssons portfolio of SEPs.

17.
On the other hand, it is the case of Lava that the suit patents are

neither valid in terms of the Patent
s Act, 1970 (hereinafter referred to as Patents Act) nor essential, rendering them unenforceable. Therefore, there cannot be any claim of infringement against Lava. Further, it is pleaded by Lava that Ericsson waived its rights to enforce any of its SEPs against entities like Lava since Lava imports and distributes its mobile phones and other devices that incorporate chipsets, which alone can be said to implement Ericssons patents.

18.
It is also stated that Ericsson failed to make a full and fair disclosure to Lava with regard to its SEPs and provide FRAND terms of licensing of its SEPs to Lava and accordingly committed breach of its FRAND obligations towards Lava. Ericsson also issued groundless threats of legal proceedings including infringement action in respect of its SEPs.

2.1. BACKGROUND OF PROCEEDINGS IN THE TWO SUITS
19.
In 2015, Lava filed a suit against Ericsson, being CS (OS) 01/2015 before the District Court, Gautam Budh Nagar, Noida (hereinafter referred to as Noida Suit), in which following reliefs were claimed:

(a) Declare that the Defendant is estopped and/or has waived its right to enforce its Indian patents and/or patent applications which are and/or have been claimed by the Defendant to be essential to 2G and/or 3G standards, in view of:

(i)
Defendant’s strategy to not assert any of its claimed standard essential patents against manufacturers/designers of chipsets;

(ii)
Defendant’s strategy to not assert any of its claimed standard essential patents in China against any manufacturer of mobile phone and tablet devices; and/or

(iii)
Due to Defendant’s failure to timely disclose such patents and/or patent applications to ETSI;

(b) Declare that in view of its inequitable conduct the Defendant cannot enforce its patents which are and/or have been claimed by the Defendant to be essential to 2G and/or 3G standards, against the Plaintiff;

(c) Declare that the Defendant, as claimant of standard essential patents, is bound to publish its standard licensing terms and conditions;

In the alternative to prayer (a) and (b) above:

(i) Declare that the Defendant is bound to grant an irrevocable license under its standard essential patents, including patents which are essential and/or claimed to be essential by the Defendant to 2G and/or 3G standards, on fair, reasonable and non-discriminatory (FRAND) terms, to the Plaintiff herein;

(ii) Declare the fair, reasonable and non-discriminatory (FRAND) terms, including royalty rates, on which the Defendant should grant a license under its Indian patents and patent applications which are enforceable and essential to 2G and/or 3G standards, to the Plaintiff herein; and

(iii) Grant an injunction in mandatory terms directing the Defendant to license its Indian patents and patent applications which are enforceable and essential to 2G and/or 3G standards at the FRAND terms determined by this Hon’ble Court.

d) Declare that the threats of legal proceedings issued by the Defendant are unjustifiable;

e) Grant an injunction restraining the Defendant and their directors,
representatives, agents, officials, employees and any other person acting under or on behalf of the Defendant from, in any manner issuing any groundless threats against the Plaintiff.

f) Pass such other and further orders as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case.

20.
On 19th March, 2015, Ericsson filed a suit against Lava before this court seeking the following reliefs:

i. A decree of Permanent Injunction be passed in favour of the Plaintiff and against the Defendant, its officers. Directors, Agents, Distributors and Customers restraining them from manufacturing/assembling, importing, selling, offering for sale, advertising including through their and third party websites, products (telephone instruments, mobile handsets, tablets, hand held devices, dongles etc.), including the models mentioned in paragraph 7 of the plaint and any future or other devices or models, that include the AMR, 3G EDGE technology/devices/apparatus as patented by the Plaintiff in suit patents IN 203034, IN 203036, IN 234157, IN 203686, 213723 (THE AMR PATENTS), IN 229632, IN 240471 (THE 3G PATENTS) AND IN 241747 (THE EDGE PATENT), so as to result in infringement of the said suit patents, until the Defendant has procured appropriate licenses from the Plaintiff;

ii. A decree of damages of at least Rs. Fifty crores for the past sale be passed in favour of the Plaintiff and against the Defendant and the Defendant be also directed to render sales accounts qua the telecommunication devices (handsets, tablets, dongles etc.) sold by it in India that incorporated the Plaintiff’s patented technology till date. The Plaintiff submits that the valuation of damages is in approximate figures and on the complete disclosure of the revenues earned by the Defendant, the Plaintiff undertakes to pay further court fee as may be determined by this Hon’ble Court.

iii. A decree be passed declaring that the rates offered by the Plaintiff qua its portfolio of Standard Essential Patents are FRAND in nature;

iv. An order for delivery up of infringing components/elements, semi-manufactured products/ parts, products manufactured using the patented technology/devices/apparatus including packaging, labels, brochures and other printed material for the purposes of destruction;

v. Costs of the suit be awarded to the Plaintiff;

vi. Any further order(s) which this Hon’ble Court may deem fit and proper in the interest of justice and equity be passed in favour of the Plaintiff and against the Defendant.

21.
Subsequently in the said suit, a counter claim was filed by Lava on 28th July, 2015 seeking the following reliefs:

(a) Dismiss the Suit filed by the Plaintiff;

(b) The claims of Indian Patent No. IN 203034, IN 203036, IN234157, IN 203686, IN 213723, IN 229632, IN 240471 and IN 241747 be revoked;

c) Cost may be awarded in favour of the Defendant/Counter Claimant;

d) Pass any other relief as this Hon’ble Court may deem fit and proper in the interest of justice.

22.
On a Transfer Petition filed by Ericsson before the Supreme Court, being T.P.(C) NO. 1071/2016, the Supreme Court vide order dated 31st July, 2015, transferred the Noida Suit to this Court and it was renumbered as CS (COMM) 65/2016.

23.
On 18th January, 2016, a submission was made on behalf of Lava before this Court that Lava does not wish to press the Noida Suit. This request was vehemently opposed by Ericsson and hence, Lava was given liberty to file an application seeking withdrawal of the Noida Suit. However, no such application was filed by Lava.

24.
On 2nd February, 2016, the following consolidated issues were framed in both the suits:

1. Whether the plaintiff is owner of following patents:

i.
IN 203034 titled as Linear Predictive Analysis by synthesis encoding method and encoder;

ii.
IN 203036 titled as Apparatus of producing from an original speech signal a plurality of parameters;

iii.
IN 234157 titled as A method of encoding/decoding multi-codebook fixed bitrate CELP signal block;

iv.
IN 203686 titled as Method and system for alternating transmission of codec mode information;

v.
IN 213723 titled as Method and apparatus for generating comfort noise in a speech decoder;

vi.
IN 229632 titled as Multi service handling by a Single Mobile Station;

vii.
IN 240471 titled as A mobile radio for use in a mobile radio communication system;

viii.
IN 241747 titled as A transceiving omit unit for block automatic retransmission request; OPP

2. Whether the defendant is infringing the abovesaid suit patents? OPP

3. Whether the counter-claims of the defendant is barred? OPP

4. Whether the abovesaid suit patents are invalid in nature and are liable to be revoked in the light of the grounds raised by the defendant in its counter claim? OPD

5. Whether the plaintiff is entitled to a decree declaring that the rates offered by the plaintiff qua its portfolio of Standard Essential Patents are FRAND in nature as claimed? OPP

6. Whether the defendant is liable to be permanently injuncted from infringes the plaintiffs patents? OPP

7. Whether the plaintiff is entitled to damages or accounts the profits? If so, on what terms and for what period? OPP

8. Relief.

25.
By an order passed on 1st March, 2016, this Court allowed an application filed by Ericsson seeking constitution of a Confidentiality Club and directed the parties to file a list of not more than three lawyers and two expert witnesses, who alone would be entitled to see the confidential documents and would be bound by the confidentiality orders of this Court. The relevant extract of the said order is set out below:

14. Under these circumstances, it is directed that within one week, each party is directed to provide on an affidavit, a list of not more than three lawyers (who are not and have not been in-house lawyers of one of the parties) and not more than two external expert witnesses, who alone will be entitled to see the aforesaid confidential documents/patent license agreements. They (members of club) would be bound by confidentiality orders passed by this Court and shall not make copies or disclose the contents of the said aforesaid confidential documents/patent license agreements to anyone else or anywhere else, including in other legal proceedings, oral and written communications to the press, blog publications etc., so that the spirit of the confidentiality regime would be preserved. The inspection can only be done through the confidentiality club members and no copies will be made of such confidential documents/license agreements. After the inspection, the aforesaid
confidential documents/patent license agreements be resealed and again deposited with the Registrar General of this Court. It is also made clear that during recordal of evidence with respect to aforesaid confidential documents/patent license agreements etc., only the members of the confidentiality club shall be present. The proceedings of this Court, when the said documents are being looked at, would be in camera to the effect that only the members of the confidentiality club be permitted to be present.
(Emphasis supplied)

26.
The aforesaid order was challenged by Lava before the Supreme Court. The Supreme Court disposed of the SLP via order dated 1st April, 2016 while observing as follows:

At the time of hearing of the petition, it has been submitted by the learned senior counsel appearing for the respondent-plaintiff that the respondent is willing, upon being directed by the Court, to give copies of the documents to the petitioner-defendant by redacting the confidential information including the name of the parties. However, the rates will not be redacted.
In view of the above statement made by respondent, the learned senior counsel appearing for the petitioner seeks permission to withdraw the petition.
In pursuance of the above statement, the respondent is directed to abide by the above statement at the time of trial.
The documents shall be given by the respondent in the course of the day to the present petitioner. Cross-examination shall proceed further on Monday, the 4th April, 2016 in the High Court.
The special leave petition is, accordingly, disposed of as withdrawn.
(Emphasis supplied)

27.
Pursuant to this order, Ericsson filed various documents in sealed covers, including 54 licensing agreements entered into by Ericsson with the third parties.

28.
Subsequently, on the basis of a prima facie finding that the suit patents were valid and that Lava was infringing the same, an interim injunction was passed against Lava via judgment dated 10th June, 2016,

restraining Lava from importing or selling its devices infringing Ericssons
patents. However, subject to Lava depositing a sum of Rs. 50 crores with the Registrar General of this Court by way of an FDR, the operation of the aforesaid judgment was to be stayed till the final disposal of the suit. Lava was also directed to file statement of accounts for the period from 2011 to 31st May, 2016 and thereafter, quarterly statements till the final judgment is delivered. The operative portion of the said judgment is reproduced below:

114. For the reasons aforesaid given, the application filed by the plaintiff is allowed. The application filed by the defendant being I.A. No.16011/2015, which is false and frivolous, is dismissed as in that application, the defendant sought injunction against the plaintiff for stay of operation of suit patent and to restrain the plaintiff from claiming any right to the suit patent. Once this court, prima facie, holds that the defendant is guilty of infringement, the patents are valid and no credible defence is shown by the defendant, the question of passing the said relief does not arise. The said frivolous application filed by the defendant is dismissed with cost of Rs.50,000/- which shall be deposited by the defendant with the Prime Ministers National Relief Fund, within two weeks from today. The present case is a fit case wherein the defendant is liable to be injuncted from manufacturing, importing, selling, offering for sale its devices including phones, tablets, dongles, etc. which infringe the plaintiffs patented technology. The order of injunction is passed accordingly.

115. It is clarified that the said interim order would become operative w.e.f. 21st June, 2016. From that date onwards, the defendant shall not import mobiles under the patents and technology, which are subject of the suit patents, and not to sell the same in the market, directly or indirectly through agent, shopkeepers, dealers, distributors or any other person on its behalf. The defendant shall also not export the impugned goods. All Custom Authorities in India are directed not to release the impugned mobile phones if received from overseas countries under technology of suit patents of the plaintiff to the defendant or any person on its behalf w.e.f. 21st June, 2016. The interim order, which is passed on merit, would be subject to the condition that if the defendant, without prejudice, will deposit a sum of Rs.50 crores with the Registrar General of this Court by way of FDR as security amount on or before 20th June, 2016, the operation of interim order shall remain stayed till the final
disposal of the main suit. In addition to that, under those circumstances, the defendant shall also file the statement of accounts for the period of 2011 to 31st May, 2016 before Court by 10th July, 2016 and continue to file the same every quarterly till the final judgment is delivered in the main suit. The plaintiff would be also at liberty to move an application for further deposit, in case final hearing of the suit is delayed on account of the defendants side.
(Emphasis supplied)

29.
The aforesaid judgment was taken in appeal by Lava. Vide order dated 22nd June, 2016 read with order dated 22nd July, 2016, the Division Bench of this Court modified the aforesaid order by directing Lava to deposit a sum of Rs. 30 crores with the Registrar General of this Court. Pursuant thereto, Lava deposited a sum of Rs. 30 crores in the form of an FDR with the Registrar General of this Court. Resultantly, the interim injunction against Lava remained in abeyance till the final adjudication of the suits. Further, the Division Bench directed that the statement of accounts shall be filed by Lava in a sealed cover. Pursuant thereto, Lava filed statement of accounts till March, 2022.

30.
Vide order dated 26th September, 2024, the Division Bench, disposed of the appeal, with the direction that the amount deposited in the FDR shall be subject to the outcome of CS(COMM) 1148/2016, i.e., one of the present suits. The said order is set out below:

This appeal is directed against the order of the Ld. Single Judge who had ordered the defendant/appellant to deposit Rs.50 crores as interim licence fee. During the pendency of the present appeal, this court had reduced the amount to Rs.30 crores as an interim measure and at the same time clarified the Ld. Single Judges observation permitting the plaintiff to move for further deposit in case final hearing was delayed on account of the defendants conduct. The evidence of the parties in the deposition of the witnesses had been concluded. It is submitted that the Ld. Single Judge has scheduled the hearing from 03.12.2018 onwards. In the light of these developments, the court is of the opinion that the interim order made on
22.07.2016 should be and is hereby made absolute. This is of course subject to the final outcome of the proceedings in the suit. The deposit made shall also await appropriation/disbursement, as the case may be, by the final judgment of the Ld. Single Judge and any consequential directions made in the course of CS(COMM)No.1148/2016. All rights and contentions of the parties are reserved. This appeal is disposed of in the above terms. Pending application is also disposed of.
2.2. RECORDING OF EVIDENCE
31.
Vide order dated 22nd February, 2016, Dinesh Dayal, retired Additional District Judge (ADJ), was appointed as the Court Commissioner by this Court to record evidence of the parties in the both the suits. Evidence was recorded by the Court Commissioner over 32 sittings from 28th March, 2016 to 20th July, 2016.

32.
The following four witnesses deposed on behalf of Ericsson:

i.
John Han (PW-1), Vice-President of Ericsson since 2013. He deposed in relation to Ericssons patent license agreements, FRAND terms, Ericssons declarations to ETSI and the conduct of Lava and the royalties/damages payable to Ericsson. He was cross-examined over 7 sittings.

ii.
Stefan Bruhn (PW-2), working at Ericsson Research, Expert Media Codec Technologies since 2008 as in-house technical expert. He deposed in relation to the essentiality and validity of Ericssons patents and the infringement thereof. He also deposed in relation to the development and adoption of standards by the ETSI. He was cross-examined over 6 sittings.

iii.
Mats Sagfors (PW-3), in-house technical expert for Ericsson. He deposed in relation to the essentiality and validity of Ericssons

patents and the infringement thereof. He also deposed in relation to
the development and adoption of standards by the ETSI. He was cross-examined over 4 sittings.

iv.
Jonathan D. Putnam (PW-4), Founder and Principal of Competition Dynamics Inc., a Litigation Firm in USA. He deposed as an external expert in relation to determination of FRAND rates in general and the damages/royalties payable by Lava for Ericssons patents. He was cross-examined over 2 sittings.

33.
The following four witnesses deposed on behalf of Lava:

i.
G.S. Madhusudan (DW-1), Senior Project Advisor with the Department of Computer Science and Engineering at Indian Institute of Technology, Madras. He gave expert testimony in relation to infringement, essentiality and validity of the suit patents. He was cross-examined over 4 sittings.

ii.
V. Kamakoti (DW-2), Professor, Department of Computer Science and Engineering, Indian Institute of Technology, Madras. He gave expert testimony in relation to infringement, essentiality and validity of the suit patents. He was cross-examined for over 2 sittings.

iii.
Sunil Bhalla (DW-3), the Founder-Director of Lava. He gave evidence related to the facts of the case and in rebuttal. He deposed as a fact-witness in relation to the FRAND negotiations and quantum of damages. He was cross-examined over 4 sittings.

iv.
Shankar Iyer (DW-4), Vice President and Head of Intellectual Practice of Cornerstone Research, Washington. He deposed as an

external economics expert in relation to the FRAND licensing terms.
He was cross-examined over 3 sittings.

34.
The Court Commissioner had scheduled the recording of evidence of Lava in rebuttal from 18th July, 2016 to 26th July, 2016. Lava sought to lead evidence in rebuttal and filed an affidavit of Dr. Ray Perryman (DW-5). However, he could not travel to India from USA for cross-examination. Accordingly, on an application being filed by Ericsson for closing the evidence of Lava, its evidence was closed vide order dated 22nd July 2016.

35.
On 22nd August, 2016, the suit filed by Ericsson being CS(OS) 764/2016 was renumbered as a commercial suit being CS(COMM)1148/2016. The counter claim filed by Lava was also renumbered.

2.3. FINAL HEARING
36.
The final arguments in the present suits before this Bench commenced from 8th February, 2023 and were heard over nineteen dates of hearing of about two hours each. The hearing concluded on 30th May, 2023, on which date the judgment was reserved and both the parties were granted l