Background
Ericsson alleged that Micromax's mobile handsets implemented technology covered by Ericsson's declared standard-essential patents relating to 2G and 3G communication standards (AMR, EDGE), without a valid licence. Because SEPs are, by definition, unavoidable for any device implementing the relevant standard, Ericsson had committed — as a condition of standard-setting — to license these patents on FRAND terms to any willing licensee.
The Dispute
Micromax contested both the royalty rates Ericsson demanded and the basis on which they were calculated — a percentage of the selling price of the entire handset, rather than the value of the specific chipset implementing the standard. This "royalty base" question — whether FRAND royalties should be calculated on the smallest saleable patent-practising component or the end product — became, and remains, one of the most contested issues in SEP litigation globally.
The Delhi High Court's Interim Approach
The Delhi High Court granted interim relief requiring Micromax to make interim royalty payments to Ericsson pending final adjudication, without conclusively determining the FRAND rate at that stage — an approach that let both commercial reality (continued market access for Micromax) and Ericsson's patent rights coexist while the substantive dispute proceeded.
Why It Still Matters
- This case, and the parallel Ericsson disputes against Intex and others that followed it, effectively founded Indian SEP/FRAND jurisprudence — before this, Indian courts had little occasion to grapple with standard-essential patent licensing.
- The royalty-base debate it opened remains unresolved in a definitive sense and continues to surface in subsequent SEP litigation in India and internationally.
- The willingness of Indian courts to grant interim relief conditioned on royalty payment, rather than injunctive relief alone, set a template balancing patentee rights against continued market competition that later SEP cases have followed.