Context: On Friday, the Delhi High Court made a discovery order in InterDigital v. OPPO public (June 2, 2024 LinkedIn post by ip fray). Either party was granted access (within the boundaries of a confidentiality club) to the other’s Qualcomm patent license agreement. InterDigital was denied access to OPPO’s license agreements with Ericsson and Orange as it had not made sufficiently clear inhowfar those agreements covering different patent portfolios would be relevant.
What’s new: A public redacted version of another order concerning the same dispute has become available now. OPPO successfully appealed a pro tem (“for the time being”) order that required an interest-bearing deposit. A two-judge panel overruled a single judge’s 2022 decision and clarified that temporary measures to ensure that a right holder will get paid (in case it prevails) serve a purely protective, not punitive, purpose. A bank guarantee is, therefore, considered sufficient.
Direct impact: The difference between bank guarantee and deposit does not move the needle between those two parties with a view to a potential settlement. OPPO can afford either one, but OPPO cannot take a license on terms that adversely affect its competitiveness in major price-sensitive markets.
Wider ramifications: The measured decision is nevertheless interesting as some seek to portray India as a jurisdiction that gives standard-essential patent (SEP) owners excessive leverage. In this case, however, the court carefully tailored a pro tem measure so as not to place an unnecessary burden on an implementer.
First, here’s the decision:
59 pages is a long document when considering that it deals with only the question of a deposit or a bank guarantee. Many pages deal with the procedural history and an issue that arose after the judge who made the original decision wanted to place certain demands on a bank (which is, however, only a third party to these proceedings). What also complicated that part of the discussion is that OPPO pointed to bank guarantees provided during proceedings before the Munich I Regional Court, covering global royalty obligations. And there was the question of what percentage of OPPO’s sales volume is generated in India: OPPO provided a number just shy of 19%, while InterDigital somehow persuaded the judge who made the initial decision to assume 25%.
The two occurrences of the word “punitive” are worth quoting here:
96. It is also relevant to note that directions to make a deposit equal to an amount that would be payable in terms of the counter offer made by the defendants could be passed only for the purpose of securing the plaintiffs and not as a punitive measure against the defendants. […]
…
106. As observed hereinbefore, pro tem orders are not required to be imposed as punitive measures. […]
The following paragraph is interesting with a view to the “state of play” between the two parties in the global dispute:
35. He pointed out that three out of the five patents asserted in CS(COMM) No.692/2021 had been invalidated in foreign jurisdiction and the defence raised by the defendants was not unsubstantiated. […]
Patent invalidations are sometimes overturned on appeal, but appeals can also result in additional invalidations. It appears that OPPO has been able to deal significant blows to InterDigital’s portfolio.
The two-judge panel clarified that in this dispute, unlike Nokia v. OPPO, the question of whether there was a credible defense to the infringement allegations had to be considered. It depends on case-specific facts. Between Nokia and OPPO, there had previously been a license agreement in place, and there were also some other differences that suggested OPPO recognized the need to take a license sooner or later. Conversely, this indicates that InterDigital is still trying to work out a SEP license agreement with OPPO for the first time.
In this successful appeal, OPPO was represented by Saikrishna & Associates founder Saikrishna Rajagopal, Sidharth Chopra, Julien George, Anu Paarcha, Avijit Kumar, Vivek Ayyagari, Aniruddh Batia, Arjun Gadhoke and N. Parvati. InterDigital was represented by Anand & Anand’s Pravin Anand, Gourab Banerji, Vaishali Mittal, Siddhant Chamola, Pallavi Bhatnagar and Gitanjali Sharma.