High Court of Delhi was dealing with petition filed under Order XI Rules 2 & 14 CPC as amended by the Commercial Courts (Amendment) Act, 2018 read with Section 151 CPC seeking discovery by interrogatories and production of certain documents from the defendants No.1 and 2.
Brief Facts:
Plaintiff alleges that the defendants were infringing five of its patents. It is stated that the suit patents relate to four different technologies used in the field of telecommunications. These are all technologies which the plaintiff claims have been standardized by Third Generation Partnership Project (3GPP) and adopted by various standard setting organizations (SSOs)/Standard Development Organizations (SDOs) including European Telecommunications Standards Institute (ETSI). It is also claimed that in India too, these are the prescribed standard essential patents, which are usually exploited by manufacturers/importers, including the defendants. The suit has been filed seeking a decree of permanent injunction to restrain the defendants from manufacturing/assembling, importing, selling, offering for sale, advertising including through their and third party websites, mobile phones including the models mentioned in the plaint and any future or other devices or models, that include UMTS enhancements and LTE technologies and result in infringement of the suit patents until the defendants have procured Fair, Reasonable and Non- Discriminatory (FRAND) license from the plaintiff. Inter-alia, damages have also been sought for the past use of all the patents including those that have since expired.
Plaintiff’s Contention:
Learned counsel for the plaintiff submitted that the defendants in their written statement have stated that they were not liable to make any payment to the plaintiff even under FRAND and as they had obtained their chipsets from Qualcomm and MediaTek, the defendants were not liable for any infringement. It is in these circumstances, the instant application has been moved for production of the license agreements executed between the defendants and Qualcomm and other companies, as it would help to determine the truth in the claim of the defendants. Thus, the lis could be determined from the disclosure made. It was submitted that the interrogatories were therefore to be allowed and the question of relevancy need not be considered at this stage.
Defendant’s Contention:
Learned Counsel for the defendant submitted that an application under Order XI Rules 2 & 14 CPC as amended by the Commercial Courts (Amendment) Act, 2018 read with Section 151 CPC cannot be routinely allowed and the court had to consider whether the answers and documents sought were necessary for the determination of the dispute. It was submitted that since it was the case of the plaintiff that their patents were standard essential patents, it was necessary to disclose and explain every stage of such mapping of the industry standards with their patents.
It was submitted that the services that it had advertised as being available on its handset were derived from the chips which were sourced from Qualcomm and MediaTek. Therefore, if there was any infringement, the plaintiff had to question these two companies, who have, however, not been made parties to the present case. It was also argued that the plaintiff under the FRAND obligation had to make disclosures before demanding a certain license fee from the defendants to establish that its demand was fair. However, in the present suit, there has been no such disclosure made.
HC’s Observations:
After hearing both the sides court stated that the interrogatories are intended to cut short trial. Time and expenses can be saved by interrogatories being served upon the adversary. Court stated that it is trite that one who asserts must prove and that the burden of proof never shifts, however, interrogatories may be served upon the adversary if the document or information in its possession and the production of documents and answers to the interrogatories, would have a bearing on the determination of the dispute. Court stated that in determining whether a document should be disclosed or questions answered, it would be seen whether the document/questions are relevant or would throw some light on the resolution of the dispute.
Court noted that even with the amendment of the CPC pursuant to the enactment of the Commercial Courts Act, there is an obligation on parties to produce all documents in their possession and to answer every plea, giving reasons as to why a stand contrary to the plea was being taken. Court stated that the salutary provisions are intended only to expedite disposal of commercial suits. The only precaution to be taken by the court while exercising its discretion under Order XI Rules 2 & 14 CPC is to ensure that the applicant is not embarking on a roving or fishing inquiry. So long as the document sought to be produced would throw light on the subject matter of the suit and the answers sought would assist in the fair disposal of the suit, the same ought to be allowed.
Court found that the plaintiff had sought the third-party license agreements entered into by the defendants with Qualcomm and other companies, relating to 3G (UMTS) or 3.5 (HSPA and HSPA+) or 4G (LTE) technologies.
Court stated that the contention of the learned counsel for the defendants that it is for the plaintiff to map their patents on to the standard essential features would also be settled by the production of this agreement, as it would be evident as to whether the patents work on the chipset or handset and what was the technology transferred by Qualcomm and others to the defendants. Of course, keeping the necessity of industry confidentiality, these documents need not be brought out into the open. However, as suggested in respect of I.A., moved by the defendants for production of third-party agreements by the plaintiff, to determine FRAND, a confidentiality club can be constituted even in respect of these agreements.
HC Held:
After evaluating submissions made by both the parties the Court held that “the interrogatories No.(c) and (d) seem to be interrogatories that do not lead anywhere and are therefore disallowed. With respect to the interrogatories No.(a) and (b), since they have a direct bearing on the technologies used by the defendants which in turn would have a bearing on the question of infringement as well as FRAND, it is considered appropriate to direct the defendants to answer these interrogatories by way of an affidavit.”
HC allowed the petition.
Bench: Hon'ble Ms. Justice Asha Menon
Case Title: Koninklijke Philips N.V. v. Vivo Mobile Communications Co. Ltd & Ors.
Case Details: CS (COMM) 383/2020 & CC(COMM) 4/2021
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