Dolby has dragged two Chinese mobile phone players, Vivo and OPPO, in India to the court over alleged licensing violations. The two companies have been directed by the Delhi High Court to deposit royalty on per unit manufactured, sold and imported in India in an escrow account while they negotiate the terms of licensing. Vivo and OPPO have also agreed to negotiate Fair, Reasonable and Non-discriminatory (FRAND) terms with Dolby. The litigation implies that two smartphone companies may have been selling smartphones with Dolby’s technology without paying royalties to the audio company. BGR India has reached out to all the parties for the statement.

The Delhi high court has directed the two companies to “furnish to the plaintiffs at the end of each month by the 5th day of the succeeding month the particulars of manufacture, sale and import of the devices using the subject technology; and, “depositing in this court by the 8th day of the succeeding month the royalty which may be so becoming due to the plaintiffs at the rate of Rs 34 per unit”. In the meanwhile, the two companies can continue to manufacture, import and sell their smartphones.

The latest tussle over licensing issue comes months after Ericsson sued Xiaomi over patent infringements. Ericsson had accused Xiaomi of refuse to respond in any way regarding a fair license to Ericsson’s intellectual property on FRAND terms. Later, the Delhi High Court had barred Xiaomi from selling smartphones that run on non-Qualcomm chipsets till the patent infringement lawsuit hasn’t been resolved. Though, Xiaomi did sign a deal with Qualcomm over a patent licensing agreement that would cover Qualcomm’s 3G, 4G patents including 3-mode (LTE-TDD, TD-SCDMA and GSM), complete devices

Ericsson had entered into a similar legal battle with Indian smartphone players like Micromax. Ericsson had filed a patent infringement lawsuit worth Rs 100 crore against Micromax in 2013, accusing Micromax of violating eight Standard Essential Patents (SEPs) used in its 2G, 3G and 4G devices. Later, Micromax moved the CCI, saying that “Ericsson abused its allegedly dominant position by imposing exorbitant royalties for the use of its SEPs, thereby violated the Competition Act, 2002.”

Earlier this year, the Indian government had floated a consultation paper on the patent and licensing issues. Industry experts had suggested the government intervene in setting royalties and FRAND terms, and payment of royalties on SEPs should be capped by fixing a limit by the DIPP. - BGR