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Indian telecoms regulator will enter the FRAND fray amid concerns over “grim state” of domestic innovation – IAM (blog)

Indian telecoms regulator will enter the FRAND fray amid concerns over “grim state” of domestic innovation – IAM (blog)

If you have followed the handful of SEP disputes currently taking place in India, you will no doubt be familiar with the Competition Commission of India (CCI), the antitrust body that is currently mounting two separate investigations of Ericsson’s licensing practices. Now it looks as though the country’s telecoms-specific regulator also wants to have its say on FRAND matters.

In September, the Telecom Regulatory Authority of India (TRAI) published a public consultation paper on ‘Promoting Local Telecom Equipment Manufacturing’. While India has developed a substantial domestic smartphone industry – with players including Micromax, Intex and Lava – it relies heavily on foreign telecoms equipment (to the tune of 90%). A number of factors are presented by TRAI in its paper, and one of these is intellectual property.

The authority starts by pointing out what it calls “the grim state of innovation” in India’s telecoms industry, which it suggests stems partly from the country’s low overall R&D expenditure (0.8% of GDP). For context, it cites a study of India’s patent environment by the University of Utah College of Law professor Jorge Contreras, which finds very few domestic-owned assets in the telecoms space:

Telecommunications firms, Indian Patents and Patent Applications (2000-2015)

Top 10 firms

Assignee

Nationality

Total Published Indian Applications and Issued Patents

Qualcomm

United States

5,954

Ericsson

Sweden

1,843

Samsung

South Korea

1,827

Nokia

Finland

1,744

Microsoft

United States

1,557

Philips

Netherlands

1,460

Sony

Japan

1,235

Alcatel-Lucent

France

971

Motorola

United States

842

LG

South Korea

791

Indian firms

Assignee

Patent Applications

HCL

11

Spice Digital

6

Videocon

1

Without many patents of their own, Indian telecoms firms face further issues when it comes to licensing, the paper continues. Among these are uncertainty as to what constitutes FRAND, a lack of information about exactly what licences are required to manufacture a specific product, the prevalence of non-disclosure agreements in patent deals and a large volume of litigation which forms a “bottleneck” for local companies.

Eventually, the TRAI poses two patent-related questions:

  • Are the existing patent laws in India sufficient to address the issues of local manufacturers? If no, then suggest the measures to be adopted and the amendments that need to be incorporated for supporting the local telecom manufacturing industry.
  • Please suggest a dispute resolution mechanism for determination of royalty distribution on a FRAND basis.

Anyone who would like to have a say on those questions can do so before October 16 at this link.

Over at SpicyIP, Rajiv Choudhry discusses the new FRAND initiative in the context of what he terms an “ongoing turf war” between the TRAI and the CCI. In the patent space, the latter has become a fixture thanks to its intervention in two SEP disputes involving Ericsson. The CCI launched investigations of the Swedish company based on complaints by both Intex and Micromax, both of which Ericsson sued for patent infringement. In March 2016, the Delhi High Court ruled that those probes could continue, suggesting that the CCI is going to have jurisdiction to look into such SEP matters going forward. If anything comes of this TRAI consultation, there could be a second SEP watchdog in India that patent owners will need to pay close attention to.

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