How and why Ericsson just banned Xiaomi from selling phones in India (UPDATE: Barra responds)

Chinese phone maker Xiaomi has been slapped with an injunction from a high court in India, which bans the sale of Xiaomi phones in the country.

Ericsson, one of the world’s biggest telecommunications equipment providers and holder of many vital patents that allow smartphones to connect to mobile networks, is behind the injunction. The Swedish mobile heavyweight alleges Xiaomi infringed on its patents.

Ericsson told TechCrunch that it has spent three years attempting to engage Xiaomi, but to no avail. After Xiaomi allegedly refused to respond, Ericsson filed for the injunction, forcing Xiaomi into negotiations. Ericsson demands Xiaomi pay royalties for the relevant patents on products that connect to 2G (GSM), EDGE, and 3G networks.

Indian authorities have reportedly been dispatched to Xiaomi’s offices in India to assure the rules of the injunction are not broken, namely selling or importing more phones. The injunction did not specify which models are affected.

A Xiaomi representative sent the following statement to Tech in Asia, saying it has not yet heard from the court:

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.
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.

Update on December 12: Xiaomi’s head of international Hugo Barra responded on Facebook to the injunction on behalf of the Mi India team:

We have been committed to continue our sales of Redmi Note and Redmi 1S devices in India. In the last 2 days alone, we received about 150,000 registrations for Redmi Note on Flipkart and the momentum has been terrific.
However, we have been forced to suspend sales in India until further notice due to an order passed by the Delhi High Court. As a law abiding company, we are investigating the matter carefully and assessing our legal options.
Our sincere apologies to all Indian Mi fans! Please rest assured that we’re doing all we can to revert the situation. We have greatly enjoyed our journey with you in India over the last 5 months and we firmly intend to continue it!

On shaky footing

Ericsson has mounted similar litigation against other phone makers, including Micromax, Gionee, and Intex, according to SpicyIP, which originally broke the news. But the court seems to have expedited the case against Xiaomi due to the company’s alleged refusal to respond to Ericsson’s complaints.

However, SpicyIP notes that the law under which the injunction was granted is questionable. The international TRIPS Rules from 2007 only applies to copyrights and trademarks, not patents. That means the law might be overstepping its mandate.

Secondly, according to Indian law, SpicyIP says a lower district court must decide the case, and a high court can only get involved if there is a counterclaim. Therefore, the high court is not in conformance with the law by granting the initial injunction.

In India, Ericsson has the high ground