Recently Indian smart phone market is going through renaissance and Xiaomi was among one of the contender who sparked the wave of change, but now an order to stop sales in India with immediate effect from Delhi High Court has put Xiaomi on backfoot.
The reason behind the injunction is the patents relating to Standard, Essential Patents (SEPs) which are subject to FRAND (Fair, Reasonable and Non-Discriminatory) terms which are property of Ericsson and basically are essential elements which can be used by any company if they pay the royalty and licensing fees on time. In a statement from Ericsson even after repeated communication from their end Xiaomi didn’t comply or negotiate and instead ignored, thereby leading to legal action.
This is not good for Xiaomi as they enter a relatively new market and are still battling to make the brand name and after the privacy concerns and Indian Air Force concerns this is third time Xiaomi actions have forced user to consider their decision on buying another Xiaomi product. Soon Flipkart will also stop selling Xiaomi products as they are also the party against whom order has been passed.
Court has ordered Xiaomi to abstain from selling, advertising, manufacturing or importing devices that infringe the SEPs in dispute. While court could have ruled on fine for damages caused, an injunction is surprising although such must be the case for companies with no regards to law and order. Xiaomi products are also banned from import and Custom Officials are asked to stop imports under the IPR Rules, 2007.
The judgement lacks the basic approach of law in general but seeing the aggressive Xiaomi and way the pushing products in markets against the basic business principle the judgement is fair and immediately Xiaomi must get on same table with Ericsson if they plan to continue selling in India.