The plaintiffs, Dolby International AB and Dolby Laboratories Inc., filed a suit seeking permanent injunction, damages, and other reliefs against Lava International Ltd., alleging infringement of a suite of Standard Essential Patents (SEPs) forming part of Dolby’s Advanced Audio Coding (AAC) technology. Dolby claimed Lava's mobile devices implemented AAC-compliant technologies without procuring appropriate licenses, despite repeated communications since 2018.
The core dispute revolves around Dolby’s assertion that Lava had used AAC-related patents, some expired and others still valid, without entering into a FRAND (Fair, Reasonable, and Non-Discriminatory) license, even after extensive negotiations. Dolby contended that Lava engaged in dilatory tactics, failed to submit a counter-offer for years, and refused to pay any royalties while continuing to market devices that allegedly used Dolby’s patented technology.
Procedurally, the suit was instituted in 2024, followed by an application for interim relief and a pro tem security deposit under Order XXXIX Rules 1 & 2 CPC. On 1 May 2024, the Court gave Lava an opportunity to negotiate and submit a counter-offer. After failed negotiations, the Court directed Lava on 22 May 2024 to deposit ₹5.13 per device as volunteered by them, pending a formal determination.
The Court, after examining the prolonged negotiations, Dolby’s multiple offers, claim charts, licensing history with other manufacturers, and the absence of a timely counter-offer from Lava, held that Lava had acted as an unwilling licensee and indulged in patent holdout. The Court found that Dolby had complied with its FRAND obligations, whereas Lava had not reciprocated in good faith.
Rejecting Lava’s belated challenges on patent validity and essentiality, the Court emphasized that such issues were not raised during the six-year negotiation window and appeared to be afterthoughts. It held that Dolby had established a prima facie case of validity, essentiality, and infringement through extensive licensing, prior judicial precedents, and technical documentation.
Recognizing the need to balance equities and prevent Lava from gaining an unfair market advantage, the Court allowed Dolby’s application for a pro tem security order. It directed Lava to continue depositing ₹5.13 per device sold, as an interim measure, until the final adjudication of the suit. The judgment reaffirmed the Delhi High Court’s authority to grant such pro tem measures in SEP litigation to maintain the balance between implementers and patent holders.
No comments:
Post a Comment