As we had reported earlier on this blog, the Controller General has made available the ‘Statements of Working’ or Form 27s filed by all patentees, under S. 146 of the Patent Act, disclosing the extent to which their patents have been worked within the territory of India. The disclosures contained in these statements are useful not only for the purposes of judging the effectiveness of the patent system but also aids in the valuation of patents.
Thanks to the manner in which the information has been put up on the website, it is possible to do a company wise search for the statements filed with the patent office. I did a search for Ericsson’s patents, hoping to come up with the Form 27s for the patents involved in the lawsuit filed by Ericsson against Micromax on March 6, 2013 before the Delhi High Court. (We’ve blogged about it over here and here) Unfortunately, I don’t have access to the patent numbers involved in the litigation, since the Delhi High Court nowadays issues ex-parte interim injunctions in patent infringement cases without even mentioning the patent numbers involved. But here is a random list of Form 27s filed by Ericsson for a few of its Indian patents. I’m presuming that at least some of these patents are involved in the litigation before the Delhi High Court.
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| Image from here |
Two observations about these Form 27s filed by Ericsson for some of its 3G patents:
(i) Ericsson does not disclose any of the information required under S. 146, namely the extent to which the patent has been commercially worked – the standard submission by Ericsson in all these Form 27s is as follows: “The said patent is one among the plurality of patents associated with a single product or plurality of products sold and to some extent manufactured by Ericsson in India. It will be really hard to evaluate the financial value of the said patent in isolation because of the said situation. We will try and provide further information on the sales, as specific as we can at any time, if requested by the Controller”.
Well isn’t a request for information under S. 146, specific enough for Ericsson to disclose information? What does Ericsson mean that it will provide the information only on a specific request by the Controller? What kind of company can’t value its own patents?
(ii) Ericsson’s commitment to FRAND licensing – the relevant portion of the Form 27 is as follows – “This patent is essential for a 3rd Generation Partnership Project (3GPP) standard and Ericsson is also, subject to reciprocity, committed to make its standard essential patents available through licensing on fair, reasonable and non-discriminatory (FRAND) terms.” How does Ericsson intend to FRAND licence its patents if it is really hard to evaluate the financial value of the said patent in isolation of the overall product?
The Ericsson-Micromax litigation: As we had reported earlier, the Delhi High Court fixed an interim royalty rate at 2.5% for those Ericsson’s patents used by Micromax. Given the disclosure, or rather lack of disclosure, in the Form 27s filed by Ericsson, it is necessary to ask the Delhi High Court how it gave its stamp of approval to the 2.5% royalty rate proposed by Ericsson on the 19th of March, 2013. Also, please note that there is only a few days of difference in the filing of Form 27 and the lawsuit before the Delhi High Court. The Form 27s, without any information, were filed between the 22nd of March and the 29th of March, 2013 i.e. merely a week after Ericsson suggested the 2.5% royalty rate before the High Court. If Ericsson had enough information to suggest an interim royalty rate to the Delhi High Court, why did it not file the same information before the Patent Office?
An interim injunction is an equitable remedy and in order to seek such a remedy it is of utmost importance that the plaintiff approaches the court with clean hands. Ericsson cannot make one statement to the Delhi High Court and another statement of the Patent Office. It is entirely possible that such conduct would be viewed as inequitable conduct, justifying the setting aside of an interim injunction.
At the same time, the Patent Office must make it a point to fine entities like Ericsson for not filing the relevant information. Foreign companies do not have a right to enter Indian markets, sue Indian companies when they are violating Indian laws. The law provides for a Rs. 10 lakh fine for not filing complete Form 27s with the Patent Office and the Controller General must make it a point to fine Ericsson, for at least the 8 patents involved in the Micromax litigation.
I would be surprised if Micromax has not already raised this issue before both the Delhi High Court and the Patent Office.
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