Nokia royalty case: SC refuses to stay Delhi HC order, asks Oppo to pay up in 3 weeks

The Supreme Court has turned down Chinese smartphone maker Oppo’s request and refused to interfere with Delhi High Court’s earlier order. The top court said that since the Delhi HC is to commence the trial in the trademark infringement suit, it would not be appropriate for it to interfere with or modify the order.

Earlier, the Delhi HC had asked the Chinese smartphone maker to deposit 23 per cent of the amount it paid under its 2018 License Agreement towards "royalty" for alleged infringement of Nokia's three standard essential patents (SEPs) in cellular technology.

The apex court on Friday asked the Chinese phone manufacturer to comply with HC's directions within three weeks. And also asked it to give an undertaking to the SC in 10 days.

The SC asserted that there was no justification for intervening at this stage and has allowed Oppo three more weeks to comply with the Delhi HC's order to deposit the specified amount from its India sales.

In 2018, Oppo got a licence from Nokia that allowed it to use some of the Finnish telecom gear company’s technology for three years. 

However, the agreement did not mention the use of patents relating to 5G standards. Looking at 5G devices, which account for 52 per cent of Oppo's sales in India, the company would have had to pay a higher amount to Nokia considering technology exchange. 

The dispute began when Nokia moved the Delhi HC, alleging that Oppo had continued to use its patented technology even after the expiration of a three-year contract.

Nokia, in its plea, said that after the expiry of the agreement, Oppo witnessed an unprecedented increase in sales in India, where it sold around 77 million devices without paying anything to them as royalty. 

Nokia added that they offered to discuss the renewal of the agreement but Oppo refused to negotiate. Following which, it moved the high court for infringement of its patent for 2G, 3G, 4G and 5G devices in India. 

In its plea, Nokia demanded a pro tem (temporary) deposit from Oppo of an amount either based on the latest counter offer by the Chinese firm for a global licence or an amount equivalent to the royalty paid under the 2018 agreement. 

Initially, a single judge of the High Court dismissed Nokia's plea seeking interim deposit, saying the court did not have the power to do so without going into the merits of the case. Nokia appealed again against the order before a two-judge bench of the court. 

Then the HC division bench asked Oppo to deposit 23 per cent of its India sales. 

Oppo, in its plea before the apex court, said the HC order "altered the level playing field".   

It further caused significant hardship to them as it overlooked the fact that the Nokia Technologies' interest was secured by its bank guarantees (BGs). 

Alleging "undue advantage" to Nokia, Oppo said that the obligation imposed on it to additionally secure Nokia in India, over and above the BGs submitted in furtherance to a global counteroffer, is "absolutely unfair". 

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