Telefonaktiebolaget Lm Ericsson (Publ) vs Mercury Electronics and Another

S. Muralidhar, J.

IA No. 15542 of 2013 (u/s. 151 CPC)

This is an application u/s 151 of the CPC 1908 (''CPC'') filed by the Plaintiff, Telefonaktiebolaget LM Ericsson (Publ) [''Ericsson''], seeking

permission to file affidavits of Mr. Harish Sharma and Mr. Max Olofsson along with the claim chart mapping in a sealed envelope. The further

prayers are that the said affidavits and the claim chart mapping should be kept in a safe custody and to only permit joint inspection of the

documents by the parties and their counsel. The background to this application is that the aforementioned suit has been filed by Ericsson against

Mercury Electronics (Defendant No. 1) (''Mercury'') and Micromax Informatics Limited (Defendant No. 2) (''Micromax'') seeking permanent

injunction to restrain the Defendants from manufacturing, importing, selling, offering for sale, advertising products which include telephone

instruments, mobile handsets, tablets, handheld devices etc. as well as the models mentioned in Annexure A to the plaint and any future or other

devices or models, which include the Adaptive Multi-Rate (''AMR''), 3G and EDGE technology/devices/apparatus as patented by Ericsson in the

suit patents so as to result in infringement of the said suit patents. Ericsson has also prayed for a decree of damages in the sum of Rs. 100 crores

against Micromax and a direction to Micromax to render sales accounts for the years 2008-2012 for the mobile devices (Handsets, tablets etc.)

that incorporated the Plaintiffs patented technology. Ericsson further seeks delivery up of infringing components/elements etc. from Mercury and

Micromax.

Ericsson states that it is the owner of a huge portfolio of patents especially in 2G and 3G technologies and this has led to compatibility and

uniformity of standards across the world. Ericsson claims that there are more than 100 licensees who pay royalty for the use of its patents. As per

the Ericsson''s assessment, it holds 1/3rd of the patents essential for 2G technology (standards) and 25% of the patents essential for 3G technology

(standards).

As far as the present suit is concerned, Ericsson is seeking permanent injunction to restrain Mercury and Micromax from infringing the following

Indian patents owned by it:

* AMR Patents:

-IN203034

-IN203036

-IN234157

-IN203686

-IN213723

*3G Patents:

-IN229632

-IN240471

* EDGE Patent:

-IN241747

Para 17 of the plaint contains the titles of the AMR patents, 3G patents and EDGE patents. Para 18 of the plaint states that all the suit patents

are essential patents as they correspond to the standards issued by the European Telecommunications Standards Institute (''ETSI'') related to 2G

and 3G technologies. It is stated that the Department of Telecommunications (''DoT'') has recognized ETSI standards as approved for GSM,

WCDMA/UMTS network and equipment providers. Ericsson refers to the clauses of the Unified Access Services Licence (''UASL'') agreement,

which every telecom service providers enters into with the DoT, which mandate that the subscriber terminals employed in the network shall be of a

type/model certified by an internationally accredited agency which includes ETSI and that only such category of a subscriber unit as has been

granted such a certificate shall be brought into and operated within India under the Agreement. In para 19, a reference has been made to a letter

dated 3rd October 2008 issued by the Wireless Planning & Coordination Wing, Ministry of Communication & Information Technology, DoT

which has also adopted ETSI and other international standards for GSM/WCDMA network equipment. Consequently, mobile devices like

handsets, tablets etc., which are imported into India, require to be compliant with standards issued by ETSI and other international accredited

agencies. The relevant portion of the letter states as under:

I am directed to state that while issuing import license in respect of GSM/CDMA network equipment, Clause 2.2(d)(i) of UASL Agreement shall

be applicable which states that equipments should meet the relevant International Telecommunication Union (ITU)/Telecommunication Engineering

Center (TEC)/International Standardization bodies such as 3GPP/3GPP2/ETSI/IETF/ANSI/EIA/TIA/IS.

Para 20 of the plaint sets out, ''by way of illustration alone'', some of the ETSI standards that correspond to the suit patents. In the ''remarks''

column, the function of each of the patents is explained. The Note appended thereto reads thus:

Note: Technical specifications are worked out by 3GPP and the same are adopted as standards by ETSI. Further, all the suit patents have been

declared by the Plaintiff to ETSI and are also stored in ETSI''s database. As the aforesaid standards are extremely bulky in volume (some of them

run into 300+pages), thus copies of them are not being filed, however, they are easily accessible online from www.etsi.org.)

In para 21 of the plaint, it is stated that Mercury and Micromax are importing, assembling, marketing, selling, offering for sale etc., various

devices (mobile handsets, tablets etc.) which are compliant with the aforesaid ETSI standards thereby infringing the Ericsson''s patents without

obtaining any licence. In para 22 of the plaint, it is stated that Ericsson commenced negotiations with Micromax and offered licences on reasonable

terms as per Ericsson''s commitment to Fair, Reasonable and Non-discriminatory (FRAND) licence standards. It is stated that Micromax has,

however, avoided paying any licence fee.

Para 23 of the plaint sets out the details of various suit patents in a tabular form. It has six columns. Column No. 1 sets out the serial number,

Column No. 2 sets out application and patent number, Column No. 3 the patent title, Column No. 4 the date of filing of the patent application,

Column No. 5 the date of grant of patent and Column No. 6 the date of its expiry. These details are followed by another table setting out a

detailed ''discussion and analysis'' of the suit patents and their claims.

In para 24 of the plaint, it is stated that Micromax is one of the largest sellers of mobile phones in India and sells several devices (mobile

handsets, tablets etc.) which are changed/upgraded on a regular basis by introducing new models. It is stated that Mercury has been selling the

products of Micromax inter alia within the territorial jurisdiction of this Court. In para 25 of the plaint, it is averred that a large number of mobile

devices/phones sold by Mercury and Micromax in the past (and which they continue to sell) have incorporated Ericsson''s patented

technology/apparatus pertaining to AMR, 3G and EDGE technology.

In para 26 of the plaint, in a tabular form, the results of the test report as generated by Sasken Communication Technologies Limited (''Sasken'')

to which the Micromax''s mobile models were sent for testing have been set out. Paras 27 and 28 set out, in detail, which kind of tests were

conducted. It was concluded that the Micromax models infringed the suit patents. Paras 29 to 33 of the plaint set out the correspondence and

negotiations which took place between Ericsson and Micromax. It is stated that Micromax was informed that it was infringing the suit patents and

was asked to obtain licences under FRAND terms.

While directing issuance of summons in the suit and notice in the application, IA No. 3825 of 2013 under Order XXXIX Rules 1 & 2 CPC,

the Court passed an interim order directing that ""the Custom Authorities are directed that as and when any consignment is imported by Defendant

No. 2, intimation thereof shall be given to the Plaintiff and objections, if any, of the Plaintiff thereto shall be decided under Intellectual Property

Rights (Imported Goods) Enforcement Rules, 2007 till further orders.

Immediately thereafter, upon service of summons, Defendant No. 1 filed IA No. 4694 of 2013 under Order XXXIX Rule 4 CPC in which the

an agreed ''interim arrangement'' was put in place by the order dated 19th March 2013. Inter alia, it was agreed that Micromax/Customs would

intimate Ericsson''s notified person whenever a consignment arrived and Ericsson''s representative would, within twenty-four hours take inspection

of the consignment. Pending final determination of royalties payable by the parties, Micromax agreed to make interim payments as per the term

sheet enclosed with letter dated 5th November 2012 for different types of phones/devices. Micromax undertook to deposit the interim payments in

Court within five working days of the intimation by the Customs of the arrival of the consignment. Post inspection, Ericsson would forthwith inform

the Customs that it had no objection to the release of the consignment so that the consignment could immediately be handed over to Micromax.

The said interim arrangement has continued since.

Against the order dated 6th March 2013, Micromax filed FAO (OS) No. 143 of 2013 which was disposed of by the Division Bench on 12th

March 2013 clarifying that ""the impugned order would not be read by the Custom Authorities as an opinion prima facie in favour of either party."" It

was further observed that ""the impugned order would require the Custom Authorities to exercise statutory discretion as envisaged by the

Intellectual Properties Rights (Imported Goods) Enforcement Rules, 2007."" Thereafter the parties unsuccessfully attempted settlement through

mediation.

The present application has been filed by Ericsson in the above background seeking the reliefs already noticed. At the outset, the Court would

like to consider the prayer to permit Ericsson to place on record the affidavit of Mr. Harish Sharma. Admittedly this deals with what has transpired

during the mediation proceedings. The Court cannot permit a party to a mediation to bring on record what transpired during the mediation

proceedings. Rule 20 (c) of the Mediation and Conciliation Rules 2004 requires the parties to mediation proceedings to maintain strict

confidentiality. The Supreme Court in Moti Ram (D) Thr. L.Rs. and Another Vs. Ashok Kumar and Another, held that unlike proceedings in

Court, mediation proceedings are meant to be confidential and disclosure of the happenings in mediation proceedings would destroy the

confidentiality of the mediation process.

Ericsson states that the affidavit of Mr. Harish Sharma was necessitated ""due to the allegations made by Micromax that the mediation

proceedings failed due to Ericsson''s conduct."" The Court makes it clear that any such allegation, if made by Micromax, will not be taken note of

and will stand expunged. Accordingly the first prayer in this application is rejected. The affidavit of Mr. Harish Sharma will be removed from the

record.

The second prayer is for permission to tender the affidavit of Mr. Max Olofsson. Para 3 of the application explains its contents as under:

Furthermore, an exemplary and illustrative claim chart mapping, correlating the claims of suit patents with the relevant standards of ETSI, is

being filled along with the affidavit of Mr. Max Olofsson. It is submitted that the details of these standards and the matching patents are already

contained in the plaint. The present chart is meant to merely reiterate the essentiality of the suit patents. It is most respectfully submitted that the

aforesaid mapping chart is extremely technical in nature and has been provided by Ericsson''s technical team and contains information which is

confidential in nature.

Mr. Amit Sibal, learned counsel for Micromax raised serious objection to the Court entertaining the above request. According to him, Ericsson

has failed to construe each of the suit patent claims in the body of the plaint itself. He submits that in a suit for infringement of patents, it was

mandatory for the Plaintiff to set out, in detail, the claims under the patents as well as explain whether the patent covered a particular

component/element/device/method etc. corresponding to a technical specification for a technology that forms a part of a standard. In other words,

it was necessary for the Plaintiff to show that the suit patent was an essential patent for such standard. According to him, merely describing the

function of each patent, as has been done in para 20 of the plaint, is insufficient. He stated that the plaint only described the net result that could be

achieved by deploying the suit patents and not how that result was achieved.

Mr. Sibal submitted that unless Ericsson explained in the plaint how the ETSI standard was achieved by using the suit patents, it was not

possible for Micromax to know whether in fact its mobile handsets infringed the suit patents. Mr. Sibal submitted that the attempt to bring on

record the affidavit of Mr. Olofsson ought not to be permitted. It would amount to indirectly permitting the plaint to be amended to make good an

obvious defect. He submitted that Court should consider Ericsson''s prayer for interim injunction only on the basis of the existing pleadings without

taking into account the affidavit of Mr. Olofsson. He relied on the decisions in Rajveer Food Marketing (I) Pvt. Ltd. Vs. Amrit Banaspati

Company Ltd., , Lallubhai Chakubhai Jariwala Vs. Chimanlal Chunilal and Co., , Rodi & Wienenberger A.G. v. Henry Showell Ltd. [1969] RPC

367, Marsden v. Albrecht and Albrecht (The Illustrated Official Journal (Patents) 785) and The Read Corporation and F.T. Read & Sons, Inc. v.

Portec, Inc. 970 F.2d 816.

Before considering the above submissions, the law as explained in some of the decisions of Courts abroad and our courts may be briefly

noticed. In Marsden v. Albrecht and Albrecht, the Court of the Appeal in England required the trial court to examine whether ""the Plaintiff has

sufficiently identified the acts done by the Defendants which, he says, constitute an infringement of his process."" In The Read Corporation and F.T.

Read & Sons, Inc. v. Portec Inc. the United States Court of Appeals explained that ""the determination of infringement is a two-step process. First,

the language of the claim must be interpreted. Second, the accused device must be compared to the claim language as interpreted."" In Rodi &

Wienenberger A.G. v. Henry Showell Limited the House of Lords explained that a Court, when approached by a patent holder alleging

infringement of its patent, had to ""construe the specification and claim."" It had to determine whether the alleged infringer had taken ""all the essential

features or only some

Turning to the decision of the Indian courts, in Lallubhai Chakubhai Jariwala v. Chimanlal Chunilal and Co., the Bombay High Court held that it

was necessary for a Plaintiff ""to give the particulars of the breaches constituting the alleged infringement of his patent rights"". In Rajveer Food

Marketing (I) Pvt. Ltd. v. Amrit Banaspati Company Ltd. it was emphasised at the stage of grant of interim injunction the Court had to proceed

only on the basis of the pleadings that existed at the time of the grant of the ad interim ex parte injunction and not on the basis of subsequent

pleadings sought to be inserted by a Plaintiff by way of amendment. In sum, the law explained in the above decisions is that the plaint itself must set

out with sufficient clarity the specifications and the claims under the suit patent, the results they seek to achieve and in what manner the defendants

have infringed the suit patents.

The question that arises in the present case is whether Ericsson''s plaint, when read along with the documents filed with the plaint, satisfies this

requirement. If it does, even without the affidavit of Mr. Olofsson, then that document is only making explicit what is already on record. As already

noticed, paras 20 and 23 of the plaint set out the specifications and the claims under each of the suit patents and an analysis of each of them. Para

23 also explains what the claims under each of the suit patents seek to achieve. As regards the plea that the plaint must also describe in sufficient

detail ''how'' the standard is achieved using the suit patents, Mr. Andhyarujina, learned Senior counsel for Ericsson pointed out that the documents

filed with the plaint contained the necessary details and that the claim chart mapping was prepared from the material already on record. Ericsson

was, therefore, not seeking to bring on record any new details. Para 26 of the plaint explains in sufficient detail how the allegedly infringing devices

of Micromax were tested. The test results for each such device have also been set out.

In order to determine whether Ericsson has shown ''how'' the standard could be achieved using the suit patents and in what manner Micromax

has infringed the suit patents, not only the plaint but also the documents filed with the have to be examined. There may be a large volume of

documents and it may not make it practicable to set out all the details contained therein in the plaint itself. As explained by the Supreme Court in

Liverpool and London S.P. and I Asson. Ltd. Vs. M.V. Sea Success I and Another, it is not only the plaint but the documents filed with it that

have to be examined to determine what the Plaintiffs case is.

The affidavit of Mr. Olofsson that is sought to be filed encloses the claim chart mapping which purportedly enables Micromax to know the

manner in which the standards can be achieved using the suit patents, and correspondingly the manner in which the suit patents have been infringed

by the Micromax products. Ericsson claims that the claim chart mapping is an analysis of the material contained in the documents filed with the

plaint. It must be noted that although the affidavits of Mr. Harish Sharma and Mr. Olofsson have been filed in the Court in a sealed cover, copies

thereof have been provided to Mercury and Micromax. They are, therefore, aware of the contents of both affidavits. It was not suggested by Mr.

Sibal that the claim chart mapping was not substantiated by the documents already filed by Ericsson.

It is, therefore, not possible to accept the contention that the plaint, read with the documents filed with it, do not meet the requirement of

Ericsson having to construe the claims under the suit patents. The affidavit of Mr. Olofsson does not seek to bring on record details that cannot be

otherwise culled out from the documents already on record.

Accordingly, Ericsson is permitted to file the affidavit of Mr. Olofsson along with the claim chart mapping in a sealed cover. The said affidavit

and the enclosed claim chart mapping will be kept in safe custody. Joint inspection of the said affidavit and the documents enclosed are permitted

only to the parties and their counsel.

It is clarified that nothing in this order will be construed as an expression by the Court of an opinion on the merits of the contentions of either of

the parties. Further, the right of Mercury and Micromax to challenge the veracity of the affidavit of Mr. Olofsson or the claim chart mapping

enclosed therewith at the appropriate stage of the suit is reserved. The application is disposed of in the above terms.