Anand and Anand successfully represented InterDigital Technology in the Delhi High Court against Oppo in Patent Infringement Case

Anand and Anand successfully represented InterDigital Technology in the Delhi High Court against Oppo in Patent Infringement Case

In a major blow to Chinese smartphone giant Oppo, the Delhi High Court has ordered the company to deposit millions of dollars in interim security for allegedly infringing on patents owned by InterDigital. These patents, known as Standard Essential Patents (SEPs), are crucial technologies used in 3G, 4G, and 5G networks and devices, including those made by Oppo, Realme, and OnePlus.

The Court ruled in favour of InterDigital, which had accused Oppo of using its SEPs without proper licensing and paying fair, reasonable, and non-discriminatory (FRAND) royalties.

Justice Prathiba Singh’s ruling mandates that the Defendants deposit a sum covering past sales for the years 2021-22, 2022-23, and 2023-24 with the Registrar General of the Court. This amount will be held in an interest-bearing fixed deposit in auto-renewal mode. The consequences of non-compliance are clear: InterDigital retains the right to move an application before the Court, seeking an injunction against Oppo’s device sales.

The Court directed Oppo to deposit the undisclosed sum which is expected to be in the millions of dollars within three months..

“Failure to deposit the amount would entitle InterDigital to move an application before the Court for seeking an injunction/restraint order from sale of any further devices by the Defendants in India, due to non-compliance of Court orders,” Justice Singh ordered.

In addition to the financial repercussions, the Court has imposed a penalty of ₹500,000 ($6,000) on Oppo for causing delays during the proceedings.

To maintain confidentiality during the trial, the Court has established a “confidentiality club.” This exclusive group comprises designated experts, internal representatives from both parties and their legal counsel. Only club members will have access to the documents exchanged during the trial.

InterDigital was represented in the High Court by Team Anand and Anand, which included Pravin Anand (Managing Partner), Vaishali Mittal, Siddhant Chamola, and Pallavi Bhatnagar.

This ruling follows a similar case against Oppo by Nokia, which was settled through a licensing agreement. It also coincides with a German court's decision in favour of InterDigital, finding Oppo guilty of patent infringement. Both cases highlight the growing importance of FRAND licensing for SEPs and the potential legal consequences for companies deemed to be infringing.

For several years, InterDigital and Oppo negotiated a licensing agreement without reaching a consensus. Frustrated by the lack of progress, InterDigital initiated legal proceedings against Oppo in various jurisdictions, including India, the UK, and Germany. The Delhi High Court's ruling underscores the court's commitment to protecting the rights of SEP holders and discouraging "holdout" tactics by implementers who refuse to pay fair compensation for essential technologies.

The outcome of this case could set a precedent for future SEP disputes in India. Oppo now faces significant financial pressure and potential market disruption if it fails to comply with the court order. Meanwhile, the ruling strengthens InterDigital's position in its ongoing litigation against Oppo and emphasizes the importance of respecting intellectual property rights in the mobile technology landscape.

The Court dismissed Oppo’s plea to secure InterDigital’s interest through bank guarantees from various banks. When a foreign bank (HSBC) declined to appear before the Court, Oppo proposed an alternative: providing a bank guarantee from an Indian bank.

However, InterDigital countered this proposal, arguing that bank guarantees are insufficient to deter infringers who persistently hold out. Instead, InterDigital urged the Court to mandate a cash deposit by Oppo.

InterDigital initiated its Indian campaign by requesting pro-tem security payment from Oppo for the unauthorised use of its SEPs, preceding other stages of the lawsuit such as interim injunction and trial. During the ongoing arguments, Oppo proposed to provide bank guarantees drawn by its bank, HSBC Paris, in line with a counteroffer made in 2022. InterDigital accepted this proposition with the condition that the bank guarantees would solely serve as security for the Indian suits. The High Court concurred, stipulating that without prior court permission, the bank guarantee could not be utilised as security in any other foreign proceedings between the parties.

HSBC Paris, however, declined to appear before the High Court, leaving InterDigital’s interests hanging in the balance. The Indian arm of HSBC asserts its complete independence from HSBC Paris, absolving itself of any responsibility for the latter’s actions.

As a result, the Court reopened the pro-tem security proceedings to consider InterDigital's request to convert the impracticable bank guarantee into a cash payment.

Over the course of several months, the parties debated this issue. Meanwhile, the Division Bench of the Delhi High Court issued rulings in Intex v. Ericsson and Nokia v. Oppo, which clarified the legal landscape in India regarding the paramount importance of balancing the interests of SEP holders. These rulings emphasized the need to prevent SEP holders from being unfairly disadvantaged by implementers engaging in holdouts.