In the landmark case of Nokia Technologies OY v Guangdong OPPO Mobile Telecommunications Ltd. & Ors., the Supreme Court of India addressed a crucial issue concerning the alleged infringement of Standard Essential Patents (SEPs) post the expiry of a licensing agreement.
This case was significant in the realm of intellectual property rights, particularly in the context of adhering to and interpreting FRAND (Fair, Reasonable, and Non-Discriminatory) commitments.
The dispute originated when Nokia Technologies OY (Nokia) accused Guangdong OPPO Mobile Telecommunications Ltd. (Oppo) of using three of its SEPs integral to mobile communication technologies, beyond the expiration of their licensing agreement in 2021. The contention arose after Oppo’s sales in India skyrocketed following the expiration of a licensing agreement between the two companies. Nokia alleged that Oppo continued to use its patented technology without requisite consent, prompting Nokia to seek legal recourse.
Meanwhile, Oppo had approached a Chinese court to fix a FRAND rate for Nokia’s SEPs, indirectly acknowledging the use of the patents in question.
Nokia’s demand for a pro-tem deposit from Oppo was based on the royalties outlined in their 2018 agreement. Oppo, however, argued this demand lacked legal basis, asserting that it contravened FRAND principles and cited the Indian Patent Act, 1970, particularly sections that allow challenging patent validity despite existing license agreements.
In July 2023, a divisional bench of the Delhi High Court directed Oppo to deposit 23% of its Indian sales revenue post the 2018 agreement’s expiry. This ruling was grounded in the interpretation of the obligations of SEP implementers during negotiation phases, as per the framework of FRAND. This ruling came after the Court determined that Oppo had been utilizing Nokia’s technology without proper authorization. Oppo subsequently challenged this judgement in the Supreme Court.
The Supreme Court also refused to stay the Divisional bench’s decision. This ruling emphasized the necessity for SEP implementers to provide adequate security during licensing disagreements.
Furthermore, the Supreme Court granted Oppo a grace period of 10 days to submit an affidavit of compliance with the order. This gesture underscores the Court’s willingness to provide reasonable opportunities for resolution and adherence to legal directives. Following the Supreme Court’s ruling, counsel for Oppo and Vivo (part of Oppo’s parent company) expressed willingness to comply with the Indian FRAND rate set by the Indian court, preserving their right to appeal.
For the tech industry and legal community, this case serves as a guide in balancing patent rights with licensing duties, setting a benchmark for future SEP disputes and negotiations.
On January 24, 2024, both Nokia and Oppo released press statements declaring agreements for cross licensing, thus setting this three-year long patent battle.