India: Telecom Industry Under The Regime Of IPR (A Brief Narration On The Ericsson Vs. Micromax Frand Case)

Last Updated: 4 November 2013
Article by Priyanka Rastogi and Aayush Sharma

From the past years, we have seen that Intellectual Property Rights (IPR) arise as an important tool of protection for every field viz. Electronics, Biotechnology, Mechanical and to their related industries. These industries are very well depending on IP protection; use it as source of profit and as a strong weapon for protection from their competitors in the country. In many legal cases such as Google vs Samsung, Micromax vs Ericsson, Novartis-Glivec case etc. IP act as a strong legal weapon for protection. Keeping an eye on the success stories of the IPR in different practising areas, this article would like to emphasize on the role of IP protection in the India's biggest industry as Telecom industry.

Before moving forward, one must know about telecommunication and its related industries in the country. Telecommunication may be defined as a communication at a distance by technological means, particularly through electrical signals or electromagnetic waves. Early telecommunication technologies included visual signals, such as beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs. Other examples of pre-modern telecommunications include audio messages such as coded drumbeats, lung-blown horns, and loud whistles. Electrical and electromagnetic telecommunication technologies include telegraph, telephone, and teleprompter, networks, radio, microwave transmission, fiber optics, communications satellites and the Internet.


In India, telecom industry is the world's second-largest telecommunications market, with 898 million subscribers as on March 2013. The sector's revenue grew by 13.4 per cent to reach US$ 64.1 billion in FY12. Telecom infrastructure in India is expected to increase at a compound annual growth rate (CAGR) of 20 per cent during 2008-15 to reach 571,000 towers in 2015. With this vast development, industry is facing IPR challenges in the country. These Intellectual protection (IP) challenges depends upon arises factors, government policies, stringent IP laws and with effect of global market in the industry. In India with the rise of global and Indian players in the industry, IP challenges occur and such challenges raises the chance of infringement and IP conflicts. In India Samsung, Ericsson, nokia, ZTE etc are some of the biggest players who filed patent in the Indian.

Telecom technology development is greatly driven by intellectual property rights (IPR), innovations, patents and contributions to standard due to enormous domestic market and steps forwarded Indian telecom technology companies.

With an ever-increasing awareness of IPR, several countries are proactively using IPR reserves to realign their trade policies and influence international standards. For example, China has been working on its home- grown technology called TD-SCDMA since 1998. TD-SCDMA, blessed by the Chinese government, has now evolved into the TD-LTE standard, a 4G technology standard likely to be adopted by Indian operators. In earlier technologies, such as 2G or 3G, most of the IPR has been held by companies from the western world. In contrast, in 4G technology, a significant fraction of the IPR is being held by Asia-Pacific organisations and companies. Despite this amiable trend in favour of the Asia-Pacific region, India's contribution to global telecom standards is practically non-existent. Most of countries having ample telecom market which have maintained their own nationalized standards development organisations (SDO) and take part in the global standards process. India has not participated yet in nationalized standards development organisations (SDO) and there is urgent need to focus on these telecom standards. Indian telecom industry is totally based on imported technology rather than being innovators of the same therefore there is a need of the hour to force IPR and promote standards setting organisations (SSO) participation, In order to catalyse technology development and manufacturing in India. There should be proper government allocations and need to form an Indian telecom SDO with its active participation from all the sources which are significant and able to give big push towards reflecting Indian IPR and Indian requirements into the global standards. Being a strong telecom force, development of such an SDO would help telecom industry to incorporate some of its specific requirements into the new global telecom standards. Here, academic research also has a big role in leading IPR-driven innovations.

After reviewing the current scenario, it was clearly observed that Indian telecom industry have the potential to create a vivacious ecosystem that can compete with global market. Earlier we have missed the 2G, the 3G and the 4G technology trend, now today is the time for India to jump on to the platform of the next-generation (beyond 4G) technology. This requires creating a framework for IPR generation and global standards participation with a thrust on indigenous product development. We may well enter another phase of exponential telecom growth in the country. Apart from a large domestic market, we have a strong talent pool as well. We, however, lack a vibrant entrepreneurial ecosystem. We need to create an ecosystem to promote companies to design and develop products and incentivise the creation of IPR.


Ericsson, world's biggest telecom network equipment maker filed a patent infringement suit against Micromax (Indian Telecom Giant), for allegedly infringing 8 of its telecom patents for a range of wireless technologies, including 3G, AMR and Edge. This case enlightened the new concept in the arena of Telecom IP laws i.e. Reasonable and non-discriminatory terms (RAND), also known as Fair, reasonable, and non-discriminatory terms (FRAND), are a licensing obligation that is often required by standard-setting organizations for members that participate in the standard-setting process.

In this case Ericsson filed a suit, involves a huge claim of Rs. 100 cr made by Ericsson by way of damages (one of the biggest case in terms of damages in telecommunications sector). Before going further we should understand the facts behind this case. In telecom industry, Standard-setting organizations (SSO) are those industry groups that set common standards for a particular industry where there main motive is to ensure compatibility and interoperability of devices manufactured by different companies. These groups owned certain rules that govern the patent ownership which they apply to the standards they adopt. These ownership rights comprises of patent rights apply on standards which are based on "Reasonable and Non- Discriminatory Terms" (RAND) or on "fair, reasonable, and non-discriminatory terms" (FRAND). Standardsetting organizations include this obligation in their bylaws as a means of enhancing the pro-competitive character of their industry. They are intended to prevent members from engaging in licensing abuse based on the monopolistic advantage generated as a result of having their intellectual property rights (IPR) included in the industry standards. Under the FRAND terms and conditions any organization who are offering a FRAND license are required to offer such license to anyone who may or may not a member of such group. In these terms if any member who is offering licenses and without such commitment, members could use monopoly power inherent in a standard to impose unfair, unreasonable and discriminatory licensing terms that would damage competition and inflate their own relative position. Under IP-Telecom regime Essential patents are very well declared as standards for the entire industry and such standards are set by SSO only on the basics of fair, reasonable and nondiscriminatory terms to anybody ready to seek such a license. Such an arrangement is considered to be a trade-off for the patentee because it ensures that its patents are used by the entire industry, it will have to adhere to fair and reasonable terms.


In telecom sector today it's a very essential factor to identify the innovation for the country's growth. Major steps should be taken by the industry and by the government for promoting the telecom industry under the IP regime. Ericsson vs. Micromax case is the first example of the negligence of the IP challenges in telecom sector. It can be said that these mobile infringements are said be starting of telecom wars in India. The dispute in itself has been of considerable significance because it marked the arrival of patent wars on the Indian shores, with similar feuds between tech giants including Samsung, Apple, Google and Microsoft already going in courtrooms around the world. Firstly, government should establish the National Innovation Council (NIC) which helps in encouraging the creation of several areas of Councils that are aligned to government ministries. Such NIA research and comments have led the Ministry of Commerce & Industry to prepare a draft of National Intellectual Property Right (IPR) Strategy. The Strategy will outline the vision for IPR laws in the country and open the field to more transparent understanding of India's IPR architecture along with CGPDTM. The Government is cognizant of the realities of the market and the needs of the investors. For example, in the telecom space, where India is among the top telecom markets around the world, the draft National Telecom Policy puts a special emphasis on domestic manufacturing and products for which IPRs reside in India. In the coming few months, investors will see an IPR environment in India which is stronger and keeps their investments secure.


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