Well, 100 Crores isn’t a joke!

Most of the decision makers in the Indian high tech industry must be shocked on reading the news about a leading mobile phone seller in the sub continent, Micromax, getting sued by one of the world’s largest telecom infrastructure players, Ericsson, over alleged infringement of patents related to 2G and 3G wireless technologies.

While instances of patent infringement and litigation are rare in Indian scenario, this particular case should be taken quite seriously considering the huge market for mobile phones in India. It only signals that other big companies—including Apple, Samsung, Nokia and others—who have patent portfolios to their name in India would sooner or later try to block budding Indian companies from taking away their market share.

Several questions may arise in the reader’s mind at this point of time; we are attempting to answer a few here.

1. What could have Micromax done to avoid this? 

Due diligence from an intellectual property perspective before launching its products in the market, identifying blocking patents and seeking licenses from the respective patent holders; thus settling for a royalty based payment to existing patent holders.
Also, Micromax initially entered the mobile device market with innovative solutions to the local consumers’ problems. It was at this point that the company should have build an IP portfolio defending its product line by investing a fraction of 100 crore rupees that it is currently being asked to pay in infringement damages.

2.  What other Indian companies should learn from this?

In our opinion, this piece of news is a good pointer for all the innovative Indian companies to take the Indian IP regime seriously.
For a quick glance, the data available from Indian Patent Office for the year 2010–11 shows that the top ten applicants in India are foreign MNCs, and if that alone is not convincing enough, eight out of these top ten companies are IT and Telecom sector giants.

These numbers only indicate that eventually all the big MNCs, taking a cue from Ericsson’s lawsuit, would start enforcing their patents on the Indian companies.

3. How to mitigate the risk of getting into patent infringement lawsuit?

A straight forward answer would be: Do what Micromax could not, in time. In other words, before you launch your product in the market, do an IP due diligence check to make sure that you have freedom-to-operate clearance!
In simpler terms, (ideally) before you launch your products in the market, search for any existing patents or patent applications which could be potential infringement threats.

If the freedom-to-operate analysis shows that your product falls under the scope of any patent and risks infringing a patent, then at any given time there are three ways to overcome this risk:

  1. Design around the patent
  2. Acquire a license from the patentee
  3. Nullify or revoke the patent

If the outcome of this process indicates that your product does not fall under the scope of any existing patents, then the risk of litigation is mitigated.

How can Inolyst help?

Being experts at intellectual property management, we offer end-to-end solutions for IP infringement risk mitigation to our customers. Our analyses would bring out the key patents blocking your products in the market and help you identify the best possible solution to overcome the blockade. If you are not infringing on anyone’s patent, you can create your own line of IP assets in the form of patents.
Get in touch with us and we will take this discussion a step ahead in protecting your business!


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