​India probes Xiaomi over possible sales ban violation

Xiaomi could be in hot water for going against a court order about selling phones - but the company blames an unauthorised reseller.
Written by Liam Tung, Contributing Writer

An Indian court is investigating whether Chinese handset maker Xiaomi violated an order banning it from selling phones with MediaTek chips.

Xiaomi is facing fresh troubles in India as part of an ongoing patent case involving Swedish networking company Ericsson, which sued the fast-rising smartphone maker over the alleged violation of eight of its patents last December.

In December, Xiaomi was prevented from selling any of its phones in India.

However, the restriction was later loosened, and the company was permitted to sell devices powered by Qualcomm chips until the next hearing in the case, then scheduled for February 5. The company however was not permitted to sell devices that use processors from Taiwanese chipmaker MediaTek.

As reported in the Financial Times, Ericsson has reported Xiaomi for possibly violating that order and an Indian court has taken the complaint seriously enough to investigate the issue. A court-appointed investigator is expected to report their findings at the next hearing on March 18. Until then, Xiaomi is allowed to sell Qualcomm devices in India. Hugo Barra, vice president of Xiaomi's international division, was in India last week to launch the new Mi4, which runs on a Qualcomm chip.

Ericsson confirmed to ZDNet that it had asked the court to investigate Xiaomi's sales in India.

"We understand that Xiaomi phones using MediaTek chipsets have been imported and sold in India despite the court's earlier injunction order. We asked the court to appoint a local commissioner to look into Xiaomi's phone shipments to India which has been granted," a spokesperson said.

The initial sales and import ban was aimed at both Indian online retailer Flipkart as well as Xiaomi.

However, Xiaomi told ZDNet that the MediaTek-equipped handsets that are selling in India are being sold "entirely without authorisation" through a website called xiaomishop.com, and not through its official channels, Flipkart and Aitel. Xiaomi also said it plans to take legal action against the website.

"We would like to clarify that sales by Xiaomishop.com are entirely without authorization from Xiaomi, and has no affiliation with Xiaomi in any way," a Xiaomi spokesperson said.

"It is owned and operated by a third party and is not an authorised seller of Xiaomi devices in India or any other part of the world. It is infringing our trademarks, and we have previously requested for them to stop selling Xiaomi products. We intend to take legal action against Xiaomishop.com."

Xiaomi's patent troubles in India come as the company is planning to expand internationally, after selling its handsets exclusively in Asia. Despite its limited expansion so far, the company is now the third largest smartphone maker in the world behind Samsung and Apple.

Over the Christmas break, Xiaomi raised $1.1bn in funding with a valuation of $45bn.

Ericsson is claiming Xiaomi has refused to accept what it believes are licenses for its mobile patents on fair, reasonable and non-discriminatory (FRAND) terms.

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