Micromax will have to pay Swedish telecom giant Ericsson royalties on every device sold, the Delhi High Court has ruled. The ruling is part of an interim arrangement between the two companies, who are expected to finalise a patent deal by April 9.

The HC agreed to an interim arrangement between the two companies, which would mean Micromax would have to pay royalties for using features that relate to the Ericsson’s 2G, 3G and EDGE patents. The royalties range between 1.25 percent and 2 percent of sale price for every phone or tablet Micromax sells. Ericsson had approached the HC seeking over Rs 100 crore in damages from the Indian manufacturer.

A patent battle in the Indian courts

A patent battle in the Indian courts

As per the terms of the arrangement, the money for the royalties will have to be deposited in the court until the dispute is settled. The technical term for such an arrangement is FRAND (fair, reasonable, and non-discriminatory terms) license agreement.

The interim agreement states that Gurgaon-based Micromax and the Customs department would have to notify the Swedish company when a consignment of Micromax devices arrives in India. Following an inspection by Ericsson’s representative the consignment would be cleared for release and will be immediately handed over to Micromax. Upon sale, Micromax has to deposit the percentage of royalty in the court.

Ericsson’s attorney Pratibha Singh welcomed the High Court's decision. “This shows Indian courts can decide very complex patent litigation swiftly,” Singh was quoted as saying by a leading daily.

A spokesperson for Micromax said the company is in negotiations with Ericsson. “Micromax is committed to negotiating a FRAND licence with Ericsson as Ericsson has undertaken to providing a FRAND licence to Micromax. Since the matter is pending before the Hon'ble court it would be incorrect for Micromax to make any further statements on the matter.

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