BREACH OF FRAND BY GANGES IN THEIR SEP

TO BE PROVED:
 Ganges did patent hold up. (how? By violating Frand principles)

In fact, in the case of Micromax Informatics Limited v Telefonaktiebolaget LM Ericsson(Publ),

the Competition Commission of India noted, “hold-up can subvert the competitive process of
choosing among technologies and undermine the integrity of standard-setting activities.
Ultimately, the high costs of such patents get transferred to the final consumers.”[6]

The statement from the Competition Commission of India (CCI) highlights the concept of "hold-
up" in the context of standard-setting activities and its potential impact on competition and
consumers. Let's break it down:

Hold-Up: Hold-up refers to a situation where a patent holder exploits its intellectual property
rights, particularly standard-essential patents (SEPs), to demand excessive royalties or impose
unfavorable licensing terms after the standard incorporating their technology has been adopted.
Essentially, the patent holder "holds up" other market participants by leveraging the essential
nature of their patented technology to extract higher royalties or gain unfair advantages.

Competitive Process and Technology Choice: Standard-setting activities involve the

establishment of technical standards that enable interoperability and compatibility among
products and services within an industry. When hold-up occurs in standard-setting, it can distort
the competitive process by influencing the selection of technologies incorporated into the
standard. Companies may choose technologies not based on their merit or efficiency but rather
on the perceived risks of facing hold-up by certain patent holders. This undermines the integrity
of standard-setting activities, which should ideally prioritize technical superiority and innovation.

Consumer Impact: Hold-up practices can ultimately harm consumers. When patent holders
demand excessive royalties or impose unfair licensing terms, the costs incurred by manufacturers
or service providers are typically passed on to consumers in the form of higher prices for
products or services. Thus, consumers end up bearing the burden of inflated costs associated with
patented technologies, even if those technologies are essential for ensuring product compatibility
and functionality.

Transfer of Costs: The statement emphasizes that the high costs associated with hold-up
practices are ultimately transferred to consumers. This transfer of costs occurs because
manufacturers or service providers, facing demands from patent holders, may raise prices to
maintain profitability or absorb increased licensing costs. As a result, consumers may pay more
for goods or services incorporating patented technologies, even if those technologies are
necessary for ensuring product compatibility or meeting industry standards.
In summary, the CCI's statement underscores the detrimental effects of hold-up practices on
competition, technology choice, and consumer welfare. By distorting the competitive process
and inflating costs, hold-up can hinder innovation, undermine consumer choice, and result in
higher prices for consumers. Therefore, it's crucial for regulatory authorities to address and
prevent such anticompetitive behavior to foster a competitive market environment and protect
consumer interests.
Federal Trade Commission v. Qualcomm Inc. (2017):
In this case, the U.S. Federal Trade Commission (FTC) alleged that Qualcomm, a leading
semiconductor company, engaged in anticompetitive practices related to its licensing of
standard-essential patents (SEPs) for wireless communication technologies.
The FTC accused Qualcomm of using its dominant market position to impose unfair licensing
terms and engage in exclusionary tactics, including refusing to license its SEPs to competitors
and offering lower licensing rates to customers who exclusively purchased Qualcomm's chips.
In May 2019, a federal district court ruled against Qualcomm, finding that its licensing practices
violated antitrust laws. The court ordered Qualcomm to renegotiate licensing agreements and
refrain from engaging in certain anticompetitive behaviors.
Motorola Mobility LLC v. AU Optronics Corp. (2015):
In this case, Motorola Mobility (a subsidiary of Google) sued AU Optronics and other
manufacturers for price-fixing LCD panels. Motorola alleged that AU Optronics had conspired
with other LCD panel manufacturers to fix prices, resulting in inflated prices for products such as
smartphones and tablets.
The case highlighted the intersection of patent law and antitrust law, as Motorola's claims were
related to the impact of price-fixing on its products incorporating LCD panels.
AU Optronics was found guilty of price-fixing by the U.S. Department of Justice and other
regulatory authorities, leading to fines and legal actions against the company and its executives.