Thursday, December 11, 2014

Xiaomi Smartphone Sales In India Threatened By Patent Dispute With Ericsson

WUZHEN, China Founder and CEO of Xiaomi Lei Jun (R) speaks next to Sohu CEO Charles Zhang during a meeting at the World Internet Conference (WIC) in Wuzhen town, Zhejiang province November 20, 2014.

Sales of Xiaomi Inc.’s smartphones have been temporarily barred in India by a court order in connection with a patent dispute with Swedish networking gear maker Telefonaktiebolaget Lm Erisson. The interim order was reported by SpicyIP.com, a blog on India’s intellectual property law.


“Regarding the court injunction: we haven’t received an official notice from the Delhi High Court. However, our legal team is currently evaluating the situation based on the information we have,” Manu Jain, head of Xiaomi’s India operations, said in an emailed statement to International Business Times. “India is a very important market for Xiaomi and we will respond promptly as needed and in full compliance with Indian laws. Moreover, we are open to working with Ericsson to resolve this matter amicably,” he added.

India’s fast-growing smartphone market has attracted Chinese players such as Xiaomi as well as global brands like Motorola Mobility Holdings, which is now part of Lenovo Group Ltd. Competition is fierce and local handset sellers, including Micromax Informatics Ltd., have won market share using Chinese imports, challenging market leader Samsung Electronics Co. Ltd.

Xiaomi, China’s largest smartphone seller by shipments, says it has already sold over half a million handsets in India through October since it entered the market some five months ago. However, it didn’t give details of its handsets that were affected by the court order. The company sells its Redmi 1S entry-level and Mi3 mid-range handsets in India.

It had just started selling its Redmi Note handsets that support 4G wireless technology, which supports faster Internet speeds than the current 2G and 3G data networks that most Indian cities have. The company’s current Chinese flagship smartphone Mi4 is also expected to be launched early next year in India.

“Ericsson’s commitment to the global support of technology and innovation is undisputed. It is unfair for Xiaomi to benefit from our substantial R&D investment without paying a reasonable licensee fee for our technology,” Ericsson said in an emailed statement to IBTimes.

“After more than three years of attempts to engage in a licensing conversation in good faith, for products compliant with the GSM, EDGE, and UMTS/WCDMA standards Xiaomi continues to refuse to respond in any way regarding a fair license to Ericsson’s intellectual property on fair, reasonable and non-discriminatory (FRAND) terms. Ericsson, as a last resort, had to take legal action,” the company added. “To continue investing in research and enabling the development of new ideas, new standards and new platforms to the industry, we must obtain a fair return on our R&D investments. We look forward to working with Xiaomi to reach a mutually fair and reasonable conclusion, just as we do with all of our licensees.”

In a similar lawsuit, Micromax agreed to pay a royalty fee to Ericsson, under an interim order, The Economic Times reported last month. The Xiaomi case is CS(OS) 3775/2014: Telefonaktiebolaget Lm Ericsson Versus Xiaomi Technology and Others.

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