INTELLECTUAL PROPERTY RIGHT

MID- TERM ASSIGNMENT

Submitted to

Prof. Preeti Gadhavi



Submitted by

Rashmi singh
Jishita mohan
Shubhangi Adiwan
Supriya Pote


DEPARTMENT OF FASHION MAGNAGEMENT
STUDIES
(NIFT 2013-15)
DATE : 9/10/2014


CASE 1 - Ericsson sues Micromax for patent
infringement



Every Morning in a Indian House starts with a cup of tea & a news on smartphone
companies like HTC, Motorola, Apple fighting the patent wars, but it seems that
the Smartphone patent war has been finally arrived in India too.
Ericsson, worlds biggest telecom network equipment maker has recently filed a
patent infringement suit against Micromax, one of Indias largest domestic mobile
handset manufacturers .
The suit, filed at the Delhi High Court, involves a huge claim of Rs.
100 crores made by Ericsson by way of damages, which makes it so far one of the
biggest cases of its kind in in terms of damages sought in a patent suit in the
Indian IT and Telecommunications sector.
The dispute in itself is of considerable significance because this marks the arrival
of patent wars on the Indian shores, with similar feuds between tech giants
including Samsung, Apple, Google and Microsoft already going in courtrooms
around the world
Noone can forget the big patent-war between Apple and Samsung, the litigation
which is still ongoing in US courts. So, if youve been waiting for a little such
drama in Indian courts, here it comes and it may be the biggest patent
infringement suit in India on account of claimed damages of 100 crore!Ericsson,
one of the biggest patent holders in mobile technology, has sued domestic
company Micromax over patent-infringement of standard essentials patents
covering wireless technology of GSM, EDGE, 3G. As reported by Economic Times,
Ericsson has been trying to strike a license deal with Micromax for over 3 years,
but the two companies couldnt reach to an agreement leading to legal action
from Ericsson claiming whopping Rs.100 crores in damages. The disputed devices
of Micromax include products from Ninja series, Funbook Talk, and the Canvas 2
series.
Justice Manmohan of Delhi High Court has directed Micromax to pay 1.25%-2% of
the sales price of disputed devices as royalty fee in the court for about 1 month as
interim order. The court has also ordered the two companies to negotiate a
FRAND license agreement and the two parties have agreed to this. Ericsson is also
given permission to inspect consignment of Micromax devices as it arrives at
customs. Once, the consignment is cleared by Ericsson claiming no objection, the
consignment will be handed over to Micromax. Advocate Pratibha Singh
representing Ericsson on this case appreciated the swiftness and promptness
exhibited by Indian court in handling of big ticket patent litigation.
A Micromax Spokersperson acknowledged that the company is trying to negotiate
a license agreement on FRAND terms (Fair, Reasonable and Non-discriminatory)
with Ericsson. He objected to further comments citing legal matters. This case is
interesting as Ericsson holds several technology innovations whereas Micromax
doesnt hold high-profile technology patents, unlike in case of Apple and Samsung
where both the parties are big tech giants holding tons of patents. However, since
this is case of standard essential patents, the damage claimed may not be well
received by the Court.
The outcome of this patent litigation will be interesting to watch as this may lead
to hammer on other domestic companies like Intex, Lava, Karbonn, Spice, etc.
Micromax is the biggest domestic player in the country and so its the first to be
embroiled in the court. Well keep our eyes and ears on for the next hearing on
this case so keep reading news updates from us. If the damage settlement
amounts to huge numbers, this may add to the cost of handset prices resulting in
imminent price increase in budget phone in near future. Your take on this case in
comments!

1. The present information filed under Section 19(1)(a) of the Competition
Act, 2002 (the Act) by Micromax Informatics Limited (Micromax). The
Informant claims itself to be the worlds 12th largest mobile handset
manufacturer, having started its operations in India in 2008 and with
ground breaking technologies coupled with affordable prices for mobile
phones. The Opposite party, Telefonaktiebolaget LM Ericsson (Publ)
(Ericsson/Opposite Party), founded in 1876 under laws of Sweden and a
parent company of the Ericsson group, is one of the worlds largest
telecommunication companies, having a global market share of 38%.
Ericsson is engaged in business of manufacturing network/base station
equipment and telecommunication networks. Ericsson, on its official
website, claims to have 33,000 patents to its credit, with 400 of these
patents granted in India, and the largest holder of Standard Essential
Patents for mobile communication.
2. The Informant has alleged that the OP was demanding unfair,
discriminatory and exorbitant royalty for its patents regarding GSM
technology. The royalty demanded by Ericsson was excessive when
compared to royalties charged by other patentees for patents similar or
comparable to the patents held by Ericsson.
3. The Informant received a notice from OP on 03.11.2009, alleging that the
informant had infringed essential GSM patents of OP. OP demanded that
Informant should secure the licences of these patents on Fair, Reasonable
and Non-Discriminatory Terms (FRAND Terms). No details of the patents so
infringed by the Informant were provided by the OP.
4. As per the informant, OP sent a similar notice to the OP sent a similar
notice to the informant again on 29.06.2011, repeating its demand that
informant should secure FRAND licences from OP. OP also mentioned in the
above said letter to the Informant that it was intimating Securities
Exchange Board of India about Informants activities of infringing the
patents of OP, which may be relevant to safeguard interests of future
investors in Informants upcoming public issue. Informant made a request
for details of the FRAND licences from the OP, but the same were not
provided. However, thereafter Informant at the instance of the OP entered
into a Non-Disclosure Agreement with OP on 16.01.2012. The terms of the
FRAND licences were disclosed to the Informant after this agreement for
the first time on 05.11.2012, i.e. after almost 16 months of request made
by the Informant in July, 2011. OP further demanded that the Informant
should accept licences on FRAND terms within 25 days, otherwise it will be
construed as refusal to sign FRAND licence agreement. The royalty rates
imposed by the OP were as under:
a) GSM - 1.25% of sale price of product of the Informant,
b) GPRS - 1.75% of sale price of product of the Informant,
c) EDGE - 2% of sale price of product of the Informant,
d) WCDMA/HSPA: Phones, Tablets - 2% of sale price of product of the
Informant,
e) Dongles - USD 2.50 per dongle.

5. OP thereafter instituted a civil suit against the Informant, being C.S. (OS)
442/2013, before High Court of Delhi, alleging infringement of eight
Standard Essential Patents (SEPs), used in 2G, 3G and 4G devices. The Single
Bench of the High Court passed an ad interim ex-parte order in favour of
the OP. The Court also directed the Custom Authorities that as and when a
consignment was imported by Micromax, Ericsson should be intimated, and
objections of OP be decided under Intellectual Property Rights (Imported
Goods) Enforcement Rules, 2007.
6. On appeal against the above order preferred by Informant, the Division
Bench clarified that the directions of the Single Judge would not be read as
an opinion prima facie in favour of either party.
7. The Commission considered all the material on record and the arguments
addressed by the Advocates for both the Parties.As per clause 6 of ETSI IPR
policy, an IPR owner is required to give irrevocable written undertaking,
that it is prepared to grant irrevocable licences on FRAND Terms, to be
applied fairly and uniformly to similarly placed players. The patent owner
has to grant irrevocable licence to the following extent:
a) Manufacture, including the right to make or have made customized
components and sub-systems to the licensee's own design for use in
manufacture;
b) Sell, lease, or otherwise dispose of equipment so manufactured;
c) Repair, use, or operate equipment; and
d) Use methods

What Ericsson Had to Say to the Court:
Ericsson is the biggest patent-holders in the mobile phone industry with
over 30,000 patents and more than 100 license agreements with major
companies.
Ericsson claims that this this legal action on its part was inevitable after more than
three years negotiation with homegrown mobile manufacturer Micromax has
refused to enter licence agreements over use of several of its standard essential
patents (SEP) patents across wireless technology standards such as GSM, EDGE
and 3G despite several attempts by the former.
The infringed product portfolio from Micromax includes the popular Ninja series
phones, Funbook Talk tablet, and the Canvas 2 series smartphone.
The company has sued Micromax over patent infringement and has moved to
Delhi High Court, demanding huge Rs 100 crores in damages.
Micromax in its defense
Micromax has been quick to reject all the allegations by Ericsson and made the
counter-allegation that Ericsson failed to stick to global commitments on
providing its industry-essential patents to handset makers under FRAND (Free
Reasonable and Non-Discriminatory) terms.
Claims have also been made that Ericsson, following its exit from the handset
market after termination of its legal battle with Sony, was seeking to extort
unrealistic amount of licensing fees, as is evident from its ongoing battles with not
only Micromax, but also other players like Samsung.
FRAND :WHAT IT IS?
Reasonable and non-discriminatory terms (RAND), also known as fair, reasonable,
and non-discriminatory terms (FRAND), are a licensing obligation that is often
required by standard-setting organizations for members that participate in the
standard-setting process.
Standard-setting organizations are the industry groups that set common
standards for a particular industry in order to ensure compatibility and
interoperability of devices manufactured by different companies.
Standard-setting organizations commonly have rules that govern the ownership
of patent rights that apply to the standards they adopt. One of the most common
rules is that a patent that applies to the standard must be adopted on
"reasonable and non-discriminatory terms" (RAND) or on "fair, reasonable, and
non-discriminatory terms" (FRAND). The two terms are generally
interchangeable; FRAND seems to be preferred in Europe and RAND in the U.S.
Standard-setting organizations include this obligation in their bylaws as a means
of enhancing the pro-competitive character of their industry. They are intended
to prevent members from engaging in licensing abuse based on
the monopolistic advantage generated as a result of having their intellectual
property rights (IPR) included in the industry standards. Once an organization is
offering a FRAND license they are required to offer that license to anyone, not
necessarily members of the group.
Without such commitment, members could use monopoly power inherent in a
standard to impose unfair, unreasonable and discriminatory licensing terms that
would damage competition and inflate their own relative position.
ORDERS OF DELHI HIGH COURT
Delhi High Court, in the form of an interim order by Justice Manmohan, has
issued an order to Micromax to deposit a certain amount of money, apparently in
a bid to protect Ericssons monetary interests while the negotiations are
continuing.
The deposit prescribed consists of category-specific royalties, such as 1.25% of the
sale price for phones/devices capable of GSM, 1.75% of sale price for
phones/devices capable of GPRS + GSM, 2% of sale price for phones/devices
capable of EDGE + GPRS + GSM and for WCDMA/HSPA [UMTS] phones/devices,
calling tablets and finally, USD 2.50 for Dongles and data cards.The amount has to
be deposited with the court. The decision to pay the said amount comes under
the FRAND (fair, reasonable, and non-discriminatory terms) license agreement
between the two companies.
The court has also permitted officials from Ericsson to work with customs officers
in the inspection ofMicromax's consignments to check for devices infringing
Ericssons patents.
The court had asked both the companies to negotiate a FRAND (fair, reasonable,
and non-discriminatory) licence agreement which would be valid till the next
hearing, and Micromax is said to have agreed to pay interim payment with the
court.
INFERENCE:
This is so far one of the biggest cases of its kind in the Indian IT space. If the court
sides with Ericsson, other Indian manufacturers having a dream run so far might
find themselves facing similar courtroom sessions and accusations. It might also
propel other patent holders like Nokia to join the case against the local players












CASE 2 YOUTUBE VS VIACOM COPYRIGHT INFRINGEMENT CASE

Viacom International Inc filed a copyright infringement lawsuit against Youtube. It
alleges 70,000 instances of infringement on Youtubes site between 2005 to2008.
It did not severely limit the safe harbor protections of the Digital Millennium
Copyright Act as Viacom had urged the court to do. In 2010, the District Court for
the Southern District of New York granted summary judgment in YouTubes favor,
finding that it was immune from the plaintiffs claims of copyright infringement as
YouTube was eligible for the safe harbor protections available under the DMCA
for qualified service providers such as YouTube.

UNDERLYING ISSUES
The main issue on appeal was whether YouTube could be deprived of the
DMCA safe harbor protections if it was generally aware of prevalent
infringement on its site, or whether, instead, it would only be deprived of
such protections if it had actual knowledge or was generally aware of
specific infringing activity
One of the criteria entitling a service provider to safe harbor protection
concerns whether the service provider was aware, specifically or generally,
of infringing activity. The focus of the Viacom appeal was whether the
general awareness language in one of the safe harbors, referred to as Red
Flag Marc Rachman
Holly Melton Knowledge, only required general awareness of prevalent
infringing activity on YouTube, or, instead, required general awareness of
facts and circumstances of specific infringement.
In Viacoms case before the district court, Viacom alleged that between
2005 and 2008, over 60,000 instances of video clips that were posted on
YouTube contained unauthorized copies of Viacoms copyrighted shows,
such as "SpongeBob SquarePants" and "The Daily Show.
Viacom argued that YouTube, nonetheless, should not be entitled to the
DMCAs safe harbor because it was generally aware of prevalent
infringement on its service and thus was not eligible for safe harbor
protection.
Youtube argued that it was entitled to the safe harbor defence as it was not
actually or generally aware of the specific infringements claimed by Viacom
until it received the DMCA takedown notice from Viacom, and that once it
did receive the notice, it acted expeditiously in removing all the referenced
clips.
YouTube argued that with a volume of 1 billion daily views, it would be
prohibitively burdensome to require it to actively monitor every upload on
its site for potentially infringing content.
It held that with respect to "Red Flag Knowledge," awareness of prevalent
infringing activity in general is not enough to disqualify a service provider
from protection.
Rather, to be disqualified from the safe harbor, in the absence of actual
knowledge, a service provider must have awareness of facts or
circumstances that indicate specific and identifiable instances of
infringement.
The Second Circuit focused on internal YouTube correspondence in which
company founders and other upper-level management acknowledged that
certain video clips users had uploaded to the website constituted
infringement
FINAL JUDGEMENT
Thus, the court reversed the grant of summary judgment in YouTubes
favor and remanded the case to the Southern District of New York for a
determination of whether the clips referenced in the emails were clips at
issue in the lawsuit, and YouTube was therefore aware of specific instances
of infringement.
The Second Circuit further held that the common law doctrine of willful
blindness may be applied, in appropriate circumstances, to demonstrate
knowledge or awareness of specific instances of infringement under the
DMCA, and instructed the district court to consider on remand whether
there were sufficient facts to demonstrate that YouTube made a deliberate
effort to avoid knowledge of specific instances of infringement, which
would also deprive it of the protections of the safe harbour

CONCLUSION
This decision confirms that online service providers can still rely on the safe
harbor provisions of the DMCA in defending against copyright infringement
claims, even if these providers have general awareness of prevalent
infringing activity on their websites.
Online service providers do need to continue to have in place procedures
for expeditiously handling DMCA takedown notices, and should quickly
address instances where they otherwise have knowledge of specific
infringing activity, whether that knowledge is actual or general.