Nokia royalty case: Oppo moves SC against HC order asking it to pay 23% of its India sales
A bench headed by Chief Justice of India DY Chandrachud will hear the case on August 4.
- Aug 3, 2023,
- Updated Aug 3, 2023 10:48 AM IST
Chinese mobile phone maker Oppo has moved the Supreme Court against a Delhi High Court order that asked it to deposit 23 per cent of its India sales. A bench headed by Chief Justice of India DY Chandrachud will hear the case on August 4.
The Delhi HC had asked the Chinese smartphone maker to deposit 23 per cent of the amount it paid under its 2018 License Agreement towards "royalty" for alleged infringement of Nokia's three standard essential patents (SEPs) in cellular technology.
The three SEPs are stated to be necessary to make cellular systems 2G, 3G, 4G, and 5G compliant. The 23 per cent figure was derived from Oppo's sales in India that was around 23 per cent of its total global sales.
As per the case details, Oppo in 2018 secured the licence from Nokia to use its some of the telecom company’s technology for a period of three years. Oppo reportedly made advance payments.
However, the agreement did not mention the use of patents relating to 5G standards. Looking at 5G devices, which account for 52 per cent of Oppo's sales in India, the company would have had to pay a higher amount to Nokia considering technology exchange.
Nokia, in its plea, said that after the expiry of the agreement, Oppo witnessed an unprecedented increase in sale India, where it sold around 77 million devices without paying anything to them as royalty.
Nokia added that they offered to discuss the renewal of the agreement but Oppo refused to negotiate. Following which, it moved the high court for infringement of its patent for 2G, 3G, 4G and 5G devices in India.
In its plea, Nokia demanded a pro tem (temporary) deposit from Oppo of an amount either based on the latest counter offer by the Chinese firm for a global licence or an amount equivalent to the royalty paid under the 2018 agreement.
Initially, a single judge of the High Court dismissed Nokia's plea seeking interim deposit, saying the court did not have the power to do so without going into the merits of the case. Nokia appealed again against the order before a two-judge bench of the court.
Then the HC division bench asked Oppo to deposit 23 per cent of its India sales.
“Keeping in view the status of Oppo as an ex-licensee, its admission that its phones use Nokia‟s patents, its willingness to renew the 2018 Agreement and make interim payments as late as June 2021, the fact that it has approached a Court in China for determining a FRAND (Fair, Reasonable and Non-Discriminatory (FRAND) rate as well as the consistent practice of this Court and the financial condition of Oppo, this Court is of the view that the impugned judgment is contrary to the facts as well as settled principles of law,” the order said.
Oppo’s reply
In their appeal, Oppo Guangdong Oppo Mobile Telecommunications Corp, Oppo Mobiles India, Realme Mobile Telecommunication (India), Oneplus Technology and others said the HC order "altered the level playing field".
It further caused significant hardship to them as it overlooked the fact that the Nokia Technologies' interest was secured by its bank guarantees (BGs).
Alleging "undue advantage" to Nokia, Oppo said that the obligation imposed on it to additionally secure Nokia in India, over and above the BGs submitted in furtherance to a global counteroffer, is "absolutely unfair".
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Chinese mobile phone maker Oppo has moved the Supreme Court against a Delhi High Court order that asked it to deposit 23 per cent of its India sales. A bench headed by Chief Justice of India DY Chandrachud will hear the case on August 4.
The Delhi HC had asked the Chinese smartphone maker to deposit 23 per cent of the amount it paid under its 2018 License Agreement towards "royalty" for alleged infringement of Nokia's three standard essential patents (SEPs) in cellular technology.
The three SEPs are stated to be necessary to make cellular systems 2G, 3G, 4G, and 5G compliant. The 23 per cent figure was derived from Oppo's sales in India that was around 23 per cent of its total global sales.
As per the case details, Oppo in 2018 secured the licence from Nokia to use its some of the telecom company’s technology for a period of three years. Oppo reportedly made advance payments.
However, the agreement did not mention the use of patents relating to 5G standards. Looking at 5G devices, which account for 52 per cent of Oppo's sales in India, the company would have had to pay a higher amount to Nokia considering technology exchange.
Nokia, in its plea, said that after the expiry of the agreement, Oppo witnessed an unprecedented increase in sale India, where it sold around 77 million devices without paying anything to them as royalty.
Nokia added that they offered to discuss the renewal of the agreement but Oppo refused to negotiate. Following which, it moved the high court for infringement of its patent for 2G, 3G, 4G and 5G devices in India.
In its plea, Nokia demanded a pro tem (temporary) deposit from Oppo of an amount either based on the latest counter offer by the Chinese firm for a global licence or an amount equivalent to the royalty paid under the 2018 agreement.
Initially, a single judge of the High Court dismissed Nokia's plea seeking interim deposit, saying the court did not have the power to do so without going into the merits of the case. Nokia appealed again against the order before a two-judge bench of the court.
Then the HC division bench asked Oppo to deposit 23 per cent of its India sales.
“Keeping in view the status of Oppo as an ex-licensee, its admission that its phones use Nokia‟s patents, its willingness to renew the 2018 Agreement and make interim payments as late as June 2021, the fact that it has approached a Court in China for determining a FRAND (Fair, Reasonable and Non-Discriminatory (FRAND) rate as well as the consistent practice of this Court and the financial condition of Oppo, this Court is of the view that the impugned judgment is contrary to the facts as well as settled principles of law,” the order said.
Oppo’s reply
In their appeal, Oppo Guangdong Oppo Mobile Telecommunications Corp, Oppo Mobiles India, Realme Mobile Telecommunication (India), Oneplus Technology and others said the HC order "altered the level playing field".
It further caused significant hardship to them as it overlooked the fact that the Nokia Technologies' interest was secured by its bank guarantees (BGs).
Alleging "undue advantage" to Nokia, Oppo said that the obligation imposed on it to additionally secure Nokia in India, over and above the BGs submitted in furtherance to a global counteroffer, is "absolutely unfair".
Also read: Xiaomi, Oppo, Vivo and Lenovo being probed for alleged GST evasion, says Centre
Also read: Vedanta shares in focus today as promoter entity to sell 4.3% stake
Also read: Meta launches AI tool AudioCraft that will turn simple text to audio and music