Xiaomi faces global FRAND litigation in France and India
Patent trust initiates ‘strategic’ legal proceedings in Paris alongside simultaneous proceedings in Delhi | Trust alleges unfair use by Xiaomi’s of 4G tech covered by 167 patent families | Litigation estimated to be worth more than $300m.
The Hong Kong tech giant Xiaomi Corporation is facing multi-market litigation by a non-practising entity (NPE) over a portfolio of 167 patent families.
Sun Patent Trust this week issued a summons to Xiaomi to negotiate a licensing agreement for the portfolio of Standard Essential Patents (SEPs) under fair, reasonable, and non-discriminatory (FRAND) terms.
The proceedings were launched by Delaware-based Sun Patent Trust, in the Paris Judicial Court, with similar proceedings filed in India at the same time as a part of a “multi-market legal strategy”.
This could be the first ruling to be made by the French court in a global FRAND dispute.
4G tech patents
The case focuses on Xiaomi’s use of LTE-A technology patents, which provide 4G communication standards.
LTE-A is an advanced 4G standard offering faster speeds, greater capacity, and better performance compared with 3G LTE networks.
Xiaomi—one of the world’s largest tech firms, with Q3 2023 revenues exceeding $10 billion—is accused of using this technology in nearly all 4G-enabled devices it has produced since late 2018.
Compliance and fair licensing
Sun Patent Trust is an IP rights trust which licences its portfolios through patent pools, other platforms and through individual licensing transactions.
Established in 2015, it holds more than 5,000 patents across North America, Europe, and Asia.
The company insists it is committed to FRAND terms as set by relevant standard-setting organisations.
Founded in 2010, Xiaomi is now China’s largest handset manufacturer and has expanded aggressively beyond its home market, establishing a strong presence in India, Europe, and other regions.
Joseph Casino, managing trustee of Sun Patent Trust, described the situation as a “matter of regret” that the company has “no alternative but to begin FRAND proceedings to bring Xiaomi to the table to negotiate and comply with international norms”.
“SEPs are not designed to be punitive,” added Casino, who is also a partner at Wiggin & Dana and leader of the firm's IP Practice Group.
“They are meant to facilitate the adoption of technology by having reasonable licensing for everyone in the market.”
He advised that the quickest way for Xiaomi to resolve this multi-jurisdictional dispute is to come to the table and agree on FRAND terms.
Strategic venue
Sun Patent Trust, which owns the patents in question, first approached Xiaomi in 2019.
Since then, Xiaomi’s conduct has indicated an unwillingness to arrive at FRAND licensing terms, according to Sun Patent Trust.
The company is now requesting that the court orders Xiaomi to resume negotiations and pay FRAND royalties for the sales of products implementing Sun Patent Trust’s SEPs.
The decision to choose France as the venue for resolving a global FRAND rate was a strategic one, according to the licensing company.
The European Telecommunications Standards Institute (ETSI), headquartered in France, plays a significant role in shaping Long-Term Evolution (LTE) standards not only in France but across Europe and other jurisdictions.
This makes the French legal framework a neutral arbiter for FRAND litigation.
France is also one of Xiaomi’s largest markets in Europe.
By choosing France, Sun Patent Trust aims to establish a fair basis for FRAND terms that can be agreed upon globally.
The French legal environment provides an influential perspective over an international IP dispute, allowing it to be settled quickly across other jurisdictions.
In India, Sun Patent Trust requested the High Court of New Delhi to stop Xiaomi from further infringing on its SEPs and to declare that Xiaomi was an unwilling licensee while Sun Patent Trust met its FRAND obligations.
Sun Patent Trust seeks financial compensation against Xiaomi for the alleged unfair use of its SEPs.
The move, said the firm, aims to send a message about the importance of adhering to FRAND terms in major markets worldwide.
Pravin Anand of Anand and Anand represents Sun Patent Trust in the High Court of New Delhi, India.
Counsel from Hoyng ROKH Monegier represents Sun Patent Trust in France.
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