InterDigital v Oppo

Case No. CS(COMM) 692/2021 & CS(COMM) 707/2021

31 May 2024

http://caselaw.4ipcouncil.com/india/high-court-delhi/interdigital-v-oppo

Patent exhaustion Standard-essential patents FRAND Discovery Document production Chipset v handset Confidentiality club SEP licensing Third-party agreements

A. Facts

InterDigital Technology Corporation and InterDigital VC Holdings Inc. (collectively, InterDigital) own a portfolio of patents. This portfolio contains patents declared as (potentially) essential to implementing wireless communication standards (3G, 4G, and 5G) and the H.265 high efficiency video coding (HEVC) standard.InterDigital Technology Corporation & Ors. v. Guangdong Oppo Mobile Telecommunications Corp. Ltd. & Ors., CS(COMM) 692/2021 & CS(COMM) 707/2021, High Court of Delhi, judgment dated 31 May 2024, paras 1-2.

Guangdong Oppo Mobile Telecommunications Corp. Ltd. and its associated companies (collectively, Oppo) manufacture and sell telecommunication devices. [2]

InterDigital filed two suits before the High Court of Delhi (the Court). CS(COMM) 692/2021 concerns five alleged SEPs relating to wireless communication technology and CS(COMM) 707/2021 concerns three alleged SEPs relating to the HEVC standard (collectively, Suit Patents). [3] InterDigital claimed that Oppo was using its patented technology without executing a licence agreement or paying royalties on FRAND terms. [3]

Oppo filed counter claims in both suits, contending that the Suit Patents were not valid, essential, or infringed. [4]

By the order dated 21 February 2024, a confidentiality club had been constituted by the Court for the exchange of sensitive documents, including third-party licensing agreements. [5] The club was subsequently revised and expanded with the consent of both parties on 20 March 2024 and 5 April 2024. [6]

During the proceedings, cross-applications for discovery of documents were filed by both parties.

InterDigital filed applications (I.A. 9355/2023 and I.A. 9384/2023) seeking directions requiring Oppo to produce certain licence agreements. [7] Initially, InterDigital sought production of all Oppo's third-party SEP licenses, and Oppo's agreements with Qualcomm concerning components procured for its devices. [7] On 5 April 2024, InterDigital narrowed its request to Oppo's agreements with Qualcomm and Ericsson in CS(COMM) 692/2021 and with Orange SA in CS(COMM) 707/2021. [7]

Oppo filed applications (I.A. 11485/2022 and I.A. 11484/2022) seeking constitution of a confidentiality club and directions for InterDigital to produce all third-party agreements relating to its alleged SEPs. [8] On 5 April 2024, Oppo narrowed its request to InterDigital's agreement with Qualcomm. [8]

By judgment dated 31 May 2024, the Court allowed the instant applications in part. [9] The Court directed both parties to produce their respective Qualcomm agreements. [10] These documents were instructed to be placed in the confidentiality club and filed with the Court in a sealed cover. [10] However, InterDigital's prayer for discovery of Oppo's Ericsson and Orange SA agreements was rejected. [11]

B. Court's reasoning

Discovery of Oppo's Qualcomm agreement

The Court allowed InterDigital's request for production of Oppo's Qualcomm agreement. [12] Applying the test for discovery the Court observed that documents sought in discovery need not be admissible in evidence. [13] It is sufficient if they would 'throw light on the matter in controversy.' [14]

The Court recognised that the parties disputed whether the alleged infringing technology resided in the chipset or the handset. [15] Oppo contended that the technology was implemented in chipsets procured from Qualcomm, which InterDigital has authorised to sell, and that the doctrine of exhaustion accordingly applied. [15] Considering that Oppo had raised exhaustion on this basis, the Court held there was 'no reason why' Oppo's agreement with Qualcomm 'ought not to be produced'. [16] The Court observed that the agreement was “quite relevant” to assessing the scope of Oppo's Qualcomm licenses, as well as the specific technology transferred to and implemented by Oppo. [17]

Moreover, the production of the agreement would reveal whether Qualcomm had represented to Oppo that its chipsets were under lawful licence from InterDigital. [6] According to the Court that representation formed the basis of Oppo's position that the Qualcomm chipsets 'practice the invention' of the Suit Patents. [6] The agreement would also be relevant for InterDigital to counter that contention. [6]

Discovery of Oppo's Ericsson and Orange SA agreements

The Court rejected InterDigital's request for discovery of Oppo's agreements with Ericsson and Orange SA, despite InterDigital's contention that they would inform the FRAND determination. [18] The Court observed that for the purpose of assessing FRAND rates, the SEP holder's third-party licenses are relevant, rather than those of the implementer. [19]

The Court held that the onus was first on InterDigital to establish essentiality and then infringement. [20] The 'positive evidence' had to be supplied by InterDigital. [20] Oppo's agreements with other third parties 'cannot have a bearing, at this stage', on the rates offered by InterDigital to its licensees. [20] The assessment had to be made 'on the basis of comparable licenses' of InterDigital or other SEP holders. [20] The Court found that InterDigital's application lacked specific justification for requiring the agreements, beyond general submissions of their utility for the determination. [20]

Furthermore, citing InterDigital v. Lenovo the Court also acknowledged the importance of proportionality and protecting third-party confidentiality in considering such requests.Ibid, para 33 citing InterDigital Technology Corporation & Ors. v. Lenovo Group Limited & Ors. [2021] EWHC 89 (Pat), para 31.

Discovery of InterDigital's Qualcomm agreement

The Court allowed Oppo's request for production of InterDigital's Qualcomm agreement, [22] finding it relevant to deciding Oppo's exhaustion argument as well as FRAND determination. [23] Examining the agreement is necessary to identify any technology overlap and to clarify whether the technology was licensed at the chipset or handset level. [23] Additionally, the Court held that the agreement may be necessary to determine acquiescence (arising from InterDigital's failure to enforce its rights against Qualcomm) though it will be decided later. [24]

The Court noted that in Lava v. Ericsson, the plaintiff's agreement with Qualcomm was considered when determining patent exhaustion. The Court held that a similar approach was warranted in this case. [25]

[1] InterDigital Technology Corporation & Ors. v. Guangdong Oppo Mobile Telecommunications Corp. Ltd. & Ors., CS(COMM) 692/2021 & CS(COMM) 707/2021, High Court of Delhi, judgment dated 31 May 2024, paras 1-2.
[2] Ibid, paras 25.
[3] Ibid, paras 1–2.
[4] Ibid, para 3.
[5] Ibid, paras 5 and 30.
[6] Ibid, para 30.
[7] Ibid, para 4.
[8] Ibid, para 5.
[9] Ibid, paras 37-38.
[10] Ibid, para 37-38.
[11] Ibid, para 37.
[12] Ibid, paras 29-30.
[13] Ibid, para 28, citing M.L. Sethi v. R.P. Kapur, (1972) 2 SCC 427, para 9.
[14] Ibid, para 28.
[15] Ibid, para 27.
[16] Ibid, para 29.
[17] Ibid, para 29-30.
[18] Ibid, para 31 and 34.
[19] Ibid, para 31.
[20] Ibid, para 32.
[21] Ibid, para 33 citing InterDigital Technology Corporation & Ors. v. Lenovo Group Limited & Ors. [2021] EWHC 89 (Pat), para 31.
[22] Ibid, para 38.
[23] Ibid, para 35.
[24] Ibid, para 36.
[25] Ibid, para 36, citing Lava International Ltd. v. Telefonaktiebolaget LM Ericsson, 2024:DHC:2698, para 609.