Legal Challenges in Navigating FRAND (Fair, Reasonable, and Non-Discriminatory) Commitments
Standard Essential Patents (SEPs) were once a niche topic for telecom specialists. With 5G, IoT devices, connected cars, smart meters and even “smart” fans in Indian homes, SEP and FRAND disputes are now everyone’s business – device makers, start-ups, operators and, of course, IP lawyers.
SEPs and FRAND: The Basic Idea In Simple Words
A SEP is a patent that you must use if you want to implement a particular technical standard – for example, certain 4G/5G communication protocols in a smartphone or a smart watch. Because implementers cannot “design around” such patents, SEP owners commit at the standard-setting stage to license them on FRAND terms – Fair, Reasonable and Non-Discriminatory.
In Plain Language, FRAND Means:
- You can charge, but you must be fair: no extortionate rates just because people are locked into the standard.
- You must be reasonable: royalties should reflect the actual technical contribution and be consistent with comparable licences.
- You cannot discriminate between similarly placed licensees without good reason – for example, you cannot give sweet-heart terms to one OEM and punish its rival with impossible rates.
The difficulty is that FRAND is a principle, not a formula. Indian courts have had to work out what it means case by case.
The Early Indian SEP Battles: Ericsson’s Cases
Delhi High Court’s SEP docket started almost a decade ago, mainly with Ericsson’s suits against Indian and Chinese smartphone companies (Micromax, Intex, Gionee, Lava, Xiaomi).
A Few Key Themes Emerged From These:
- Interim Injunctions and Deposits
In Ericsson v Xiaomi[1], the Court initially granted an ex parte injunction stopping Xiaomi from importing and selling certain phones for infringing Ericsson’s 2G/3G SEPs. On appeal, a Division Bench allowed Xiaomi to sell devices using Qualcomm chipsets (licensed by Ericsson) on the condition that Xiaomi deposited INR 100 per device with the Court – a kind of interim FRAND security. - Portfolio licensing and royalty-based
In Intex v Ericsson[2], the Court rejected the Competition Commission of India’s preference for using the “smallest saleable patent-practising component” as the royalty base. Instead, it accepted Ericsson’s approach of using the price of the downstream device (e.g., a handset) and comparable licences to set an interim royalty, signalling comfort with portfolio licences and device-level royalties.
- Huge damages and the Lava case
In March 2024, in the long-running Ericsson v Lava[3] dispute, the Delhi High Court awarded approximately INR 244 crore in damages to Ericsson for infringement of its telecom SEPs, finding that Lava had failed to enter into a FRAND licence despite prolonged negotiations. The Court treated Ericsson’s offers as FRAND-compliant and held that Lava had effectively “held out” while continuing to use the technology.
These early cases set the tone: Indian courts will grant strong interim relief, order deposits, and are not shy about heavy final damages if they conclude that the implementer has dragged its feet on licensing.
InterDigital v Xiaomi: 5G, Global FRAND and Anti-Anti-Suit Injunctions
The Inter Digital v Xiaomi[4] saga brought 5G and global FRAND issues firmly into the Indian picture. InterDigital sued Xiaomi in Delhi, alleging infringement of 3G/4G/5G SEPs in its Indian portfolio. Xiaomi responded by filing a suit in Wuhan, China, seeking a determination of a global FRAND rate and an anti-suit injunction to restrain InterDigital from proceeding elsewhere.
Justice C. Hari Shankar of the Delhi High Court then granted an anti-suit/anti-enforcement injunction, effectively restraining Xiaomi from enforcing the Wuhan order to block the Indian proceedings. The Court clarified the conceptual distinction between anti-suit, anti-anti-suit, and anti-enforcement injunctions. It emphasised that Indian courts were competent to determine FRAND for Indian patents, even if there were parallel global proceedings.
This is crucial for 5G and IoT implementers in India: you cannot assume a foreign FRAND rate case will freeze Indian trials. If you are selling devices in India that implement SEPs, you must be prepared to justify your “willing licensee” conduct before Indian courts as well.
Delhi High Court’s New “Do’s and Don’ts” for FRAND Negotiations
More recently, the Delhi High Court has begun to articulate behavioural expectations for both SEP owners and implementers in FRAND talks. A 2024 order (in a SEP dispute involving a global telecom company and an Indian device maker) set out “do’s and don’ts” for negotiations:
Some of the key points include:
- An implementer cannot stay silent or indefinitely delay on the plea that it needs to see all of the SEP holder’s other licence agreements first. A SEP holder is entitled, in principle, to offer a portfolio licence (not just patent-by-patent) as long as the offer is on FRAND terms. Both sides have reciprocal obligations to negotiate in good faith; unilateral stonewalling or extreme take-it-or-leave-it behaviour can be held against a party when the Court later decides FRAND and remedies.
- In parallel, the Supreme Court has issued notice in matters relating to Ericsson and Monsanto, where CCI’s jurisdiction and approach to SEPs and FRAND are under challenge. This means the FRAND conversation is moving beyond the Delhi High Court into the national policy space.
What Does FRAND Actually Look Like in Numbers?
Indian courts have not laid down a rigid formula, but their practice points to a few anchors:
- Comparable licences
Courts give significant weight to real-world comparable licences, especially those with similarly placed licensees, a similar portfolio scope, and a similar geography.
- Royalty base
Despite competition law arguments for using the “smallest saleable unit”, interim orders in Ericsson cases have used the end-device price as the royalty base, with percentage rates or per-unit figures derived from comparable agreements.
- Security and deposits
Courts often bridge the negotiation gap by requiring implementers to deposit an interim royalty (per unit or a lump sum) while allowing continued sales, keeping both parties engaged without immediately crippling the business.
For 5G and IoT players, this means that “FRAND risk” is very real in India. If you ignore offers and keep shipping, you may end up paying back-dated royalties plus interest and possibly damages calculated on device-level sales.
How Indian Law Currently Balances SEP Rights and Competition
Indian law is trying to walk a tightrope. Patents are territorial and give strong exclusionary rights; a SEP is still a patent under the Patents Act, 1970. However, because SEPs sit inside standards, overly-aggressive enforcement can raise competition concerns – abuse of dominance, unfair pricing, refusal to license.
CCI has, in earlier orders, taken an assertive stance against SEP owners on issues such as high royalties and non-disclosure of licensing terms, favouring concepts such as the “smallest saleable unit”. Delhi High Court, however, has pushed back in its SEP cases, emphasising patent rights and endorsing portfolio licensing and device-based royalties.
The ongoing litigation before the Supreme Court on CCI vs Ericsson/Monsanto is expected to clarify the division of roles, such as when a FRAND dispute is purely a patent royalty disagreement. When does it cross into competition law territory? And how should Indian institutions coordinate between IP enforcement and antitrust oversight?
Practical Pointers for Indian Companies in the 5G/IoT Space
For implementers (device makers, IoT start-ups, automotive, electronics, the following practical points must be kept in mind:
- Do an early SEP exposure scan – understand which standards you are implementing and whether they are known to be SEP-heavy (3GPP, Wi-Fi, video codecs, etc.).
- When approached by a SEP owner or pool, acknowledge the letter; do not ignore it, but ask for claim charts and the basis for essentiality, and avoid endless delay. Consider interim licence or escrow arrangements if litigation risk is high.
For SEP holders active in India:
- Tailor FRAND offers to the Indian market realities (price points, volumes) and maintain internal consistency across licensees to withstand non-discrimination scrutiny.
- Be prepared for courts to ask for comparable licences (subject to confidentiality clubs) and to justify why your terms are FRAND in the Indian context.
Where India Seems to be Heading
The emerging picture from Ericsson, InterDigital and subsequent orders is that Indian courts are SEP-friendly in recognising strong patent rights and granting robust interim relief, including injunctions and security deposits. They expect both sides to negotiate in good faith and will closely examine conduct when deciding whether someone is a “willing licensor” or a “willing licensee”. Also, they are open to global FRAND conversations but insist that Indian patents and Indian sales remain subject to Indian judicial oversight.
For Indian IPR practitioners, SEPs and FRAND are no longer just telecom footnotes. They sit at the centre of every serious 5G and IoT business plan. The role of counsel is increasingly to translate dense standards and licensing terms into clear, commercial advice – helping clients avoid both infringement traps and unreasonable royalty demands, while navigating a FRAND landscape that is still evolving, but very much alive, in Indian courts.
About MAHESHWARI & CO.
MAHESHWARI AND CO. is a full-service Law Firm that represents its clients in a number of complex and high-value transactions. The firm works across four principal practice areas, Intellectual Property Rights, Corporate Law, Taxation and Litigation.
The Firm is well positioned to help inventors leverage the Patents Regime in India, aiming to accelerate and strengthen patent grant outcomes for its clients. As a trusted legal partner offering end-to-end IP services, including Patentability assessments, drafting and filing patent applications, to strategic prosecution and patent portfolio management, enforcement and litigation, the firm can guide clients through the complex procedural and substantive requirements of patent applications in India and Internationally with alacrity and prompt efficiency.
Author: Akshi Seem, Associate Partner
Co- Author: Gulshan Singh, Intern
- 2016 SCC OnLine Del 2404
- 2014 SCC OnLine CCI 8
- 2024 SCC OnLine Del 2497
- 2021 SCC OnLine Del 2424
