Malikie Innovations Ltd. & Anr. Vs Xiaomi Corporation & Ors. (Delhi High Court)
Delhi High Court ordered Xiaomi entities to secure ₹272 crore because SEP implementers cannot continue exploiting standardized patented technology without furnishing interim security during FRAND disputes, even before final determination of infringement or royalty rates.
In a significant judgment on Standard Essential Patent (SEP) enforcement and FRAND licensing disputes, the Delhi High Court has examined the circumstances in which an alleged implementer of standardized technology may be directed to furnish pro tem security pending adjudication of infringement and licensing claims. The dispute arose from allegations concerning unlicensed use of patents said to be essential to 3G, 4G and 5G cellular standards in mobile devices sold in India. The plaintiffs sought interim monetary protection on the ground that the defendants continued to manufacture, import and sell standard-compliant devices while negotiations for a FRAND licence remained unresolved.
The Court’s judgment deals in depth with the nature of FRAND obligations, the conduct expected from both SEP holders and implementers during licensing negotiations, the relevance of comparable licence agreements at the interim stage, and the power of courts to create temporary balancing arrangements in complex patent disputes. Ultimately, the Court directed furnishing of security of approximately ₹272 crore, while clarifying that the order was not a final adjudication on infringement, validity, essentiality or FRAND royalty rates, but an interim measure intended to balance equities between the parties during the pendency of the suit.
