Can Xiaomi sell MediaTek-based Redmi 6, Redmi 6A in India? It's complicated

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On December 8, 2014, the Delhi High Court granted an ex parte injunction order against Xiaomi for infringing patents owned by Swedish telecommunications firm Ericsson. Following a patent complaint from Ericsson. The patents, eight in all, were Standard, Essential Patents (SEPs) and subject to FRAND (Fair, Reasonable and Non-Discriminatory) terms. The order banned Xiaomi from selling, advertising, manufacturing or importing devices that infringed the SEPs in question in India. Customs officials were directed to stop the imports under the IPR Rules, 2007 and local commissioners were appointed to visit Xiaomi offices to ensure the implementation of these orders.

It was a major blow for Xiaomi, a relatively young company, that had just entered India. On the back of four very promising devices, the Mi 3, the Redmi, the Redmi 1S and the Redmi Note.

Ericsson had called its action a last resort after Xiaomi allegedly ignored more than three years of communication requests. "For more than three years, Ericsson made numerous attempts to engage in a licensing discussion with Xiaomi on fair, reasonable and non-discriminatory (FRAND) terms for products compliant with the GSM, EDGE, and UMTS/WCDMA standards. However, Xiaomi had refrained from responding in any way regarding a license to Ericsson's intellectual property. In December 2014, as a last resort, we took legal action to protect our R&D investment and intellectual property," it said. The patents in question involved AMR, 3G and EDGE technologies, i.e. IN203034, IN203036, IN234157, IN203686, IN213723 (AMR patents), IN229632, IN240471 (3G patents) and IN241747 (Edge Patent). Technologies that Xiaomi was allegedly using illegally in its devices.

XIAOMI VS ERICSSON: THEN

Although there were a lot of technicalities involved here, to a layman, everything narrowed down to the chipsets that Xiaomi was using in its devices. (There was more to it than just the chipset, but more on that later.) It wasn't particularly clear, at that time, what all devices were effected. What all devices were infringing Ericsson's patents. And Xiaomi wasn't up for a comment. But the temporary ban in India meant it had little choice but to open talks with Ericsson.

There's a reason why Xiaomi hasn't launched a MediaTek-based device in India in years

"It was only after the aforesaid ex-parte ad-interim order dated 8.12.2014 was passed," that Xiaomi, "approached the Plaintiff (Ericsson) and inquired about a license agreement," Ericsson had alleged, adding that, "pursuant to the signing of a non-disclosure agreement, the Plaintiff shared a draft Global Patent License Agreement (GPLA). with the said Defendant (Xiaomi) wherein it has been specifically stated that royalties shall be calculated after taking into consideration any existing agreement/arrangement which the Defendants may have with the Plaintiff's licensees."

Xiaomi was selling four devices in the Indian market, back then. While three of these devices were powered by a Qualcomm-based processor, the fourth had a MediaTek processor under the hood.

Referring to a Multi Product License Agreement between Ercisson and Qualcomm, Xiaomi argued that Ericsson had granted a "license in respect of some of its patents i.e. at least patents pertaining to CDMA (3G) Applications to Qualcomm which vests in them the right to make, use, sell. and import mobile device chipsets and devices incorporating chipsets. The benefits of the said license accrue to purchasers and customers, of Qualcomm chipsets."

Essentially, Xiaomi's devices powered by Qualcomm chipsets did not infringe Ericsson's patents "at least insofar as implementation of 3G technology and standards is concerned," the Delhi High Court said in its judgement dated April 22, 2016. Essentially, Xiaomi was free to sell Qualcomm-based devices in India. It has been only selling Qualcomm-based devices in India, well until now. No MediaTek-based devices.

Probably because, "the scope of the suit patents extends beyond the chipset," according to Ericsson.

XIAOMI VS ERICSSON: NOW

Although the Delhi High Court judgement, dated April 22, 2016, does not explicitly quote MediaTek-based Xiaomi devices, a statement from Qualcomm (given out to the court) shed some light on the matter. "Neither Xiaomi nor Qualcomm are licensed for GSM or EDGE applications under the Qualcomm-Ericsson agreement. The license therefore does not cover the 8 patents in Ericsson's Indian patent litigation against Xiaomi for GSM or EDGE applications. Furthermore, Qualcomm does not have the right to provide any rights under any Ericsson patents to Xiaomi's products using non-Qualcomm chipsets (such as Mediatek chipset)," says Qualcomm.

Even MediaTek notes that the Xiaomi-Ericsson court order was effectively supplemented by a consent order issued in August 2016. Since then, Xiaomi has been able to bring any platform device to India, including devices powered by MediaTek. MediaTek CFO David Ku, in fact, told The Mobile Indian recently, that "the lawsuit filed against Xiaomi by Ericsson is history, and now the things have settled down. Xiaomi is now free to use our chipsets. Xiaomi will launch a smartphone based on our chipset in India pretty soon."

Could he be referring to the Redmi 6 and the Redmi 6A. Quite possibly although things are not that simple. Ericsson thinks otherwise. "Ericsson and Xiaomi have not resolved their differences regarding licensing of Ericsson's standard essential patents, and any report that the lawsuit has been settled is incorrect. As per the interim court order, Xiaomi can sell MediaTek based phones in India, but have to pay an interim royalty for those sales pending resolution of the case," an Ericsson spokesperson said in an email statement to India Today Tech.

MICROMAX VS ERICSSON

Xiaomi may have been subject to the same patent infringements that became the subject matters of litigation Ericsson mounted against Micromax, Gionee and Intex at around the same period. At least one of these companies, aka Micromax, has been able to formally settle the legal dispute. Ericsson had taken Micromax to court in 2013 and claimed 100 crore in damages, for allegedly infringing its patented innovations across several wireless technology standards such as GSM, EDGE and 3G.

The two parties signed an agreement earlier this year under which Micromax will pay royalties to Ericsson on every phone it sells in India and overseas that uses 2G or 3G technology.

The last MediaTek-based Xiaomi device was, in fact, the Redmi Note. And then Xiaomi as sued by Ericsson and the rest as they say is history

"Learned counsel for the parties state that during the pendency of the present proceedings, the plaintiff (Ericsson) and defendant (Micromax) have entered into a Global Patent License Agreement dated 26th January, 2018 and in light of its execution, the parties have put an amicable end to their disputes," the Delhi High Court said in its judgement dated February 5.

Moreover, Micromax has also reportedly withdrawn its complaint to the Competition Commission of India (CCI) against unfair practices used by Ericsson to obtain royalties.

CAN XIAOMI SELL MEDIATEK-BASED REDMI 6, REDMI 6A IN INDIA? IT'S COMPLICATED

Xiaomi was not available for a comment on the matter, but going by Ericsson's statement, it's clear Xiaomi can't sell MediaTek-based devices in India yet. The Swedish firm has quashed all reports that it has reached any sort of agreement with Xiaomi, and made it clear that, unless Xiaomi is ready to pay royalties, it can't bring phones like the Redmi 6 and Redmi 6A to India. Which makes things complicated.

There's a reason why Xiaomi hasn't launched a MediaTek-based device in India in years. The last MediaTek-based Xiaomi device was, in fact, the Redmi Note. And then Xiaomi was sued by Ericsson and the rest as they say is history. With Xiaomi offering no clarity on the matter and Ericsson maintaining a firm stand, it's safe to say that, the future of MediaTek-based Xiaomi devices in India isn't bright. For now.