Ericsson facing anti-competitive lawsuit in India

Swedish infrastructure vendor Ericsson is facing an investigation from the Indian Competition Commission for breaching the Indian Competition Act. Local handset manufacturer Micromax has alleged that the vendor has demanded “unfair, discriminatory and exorbitant royalty” for its patents regarding GSM technology.

According to a filing by the Competition Commission of India, the royalties demanded by Ericsson for its essential GSM patents were excessive compared with royalties charged by other patentees for patents similar or comparable to the patents held by Ericsson.

For its part Ericsson claims to have made numerous demands that Micromax licence its patents on Fair, Reasonable and  Non-Discriminatory Terms (FRAND Terms). With these demands not met, Ericsson said, it launched legal action against the handset vendor in March. Micromax’ complaint to the CCI is part of its “general defense” Ericsson said.

However, according to the filing, no details of the patents infringed by the handset maker were provided by Ericsson. Moreover the filing alleges that Ericsson made its demands only after 16 months’ of requests from Micromax, giving the handset vendor only 25 days to comply.

The document stated: “The allegations made in the information and not refuted by [Ericsson] concerning royalty rates make it clear that the practices adopted by [Ericsson] were discriminatory as well as contrary to FRAND terms.”

Ericsson added that it will fully cooperate with the authority in this investigation to reach a “fair and reasonable” conclusion.

In January last year Ericsson took steps to place more emphasis on protecting its intellectual property. The vendor claims to have the industry’s strongest wireless IPR portfolio with 27,000 granted patents covering a range of technologies, such as wireless access and WLAN. It has already signed more than 90 license agreements with firms in the industry,

It reorganised its Licensing and Patent Development department with the aim of creating a larger revenue stream from its IPR. The vendor said at the time that it was aiming to increase IPR revenues above the SEK 4.6bn ($662m) net revenue generated in 2010.