Budget handset maker Xiaomi has been reportedly banned from selling handsets in India until a patent dispute with Ericsson has been laid to rest.
The Delhi High Court has asked both Chinese handset maker Xiaomi and its partner on the ground, e-commerce firm Flipkart, to stop importing and selling handsets in India. The ruling will remain in place until February 5, when the Indian court will hear from both Xiaomi and Swedish equipment maker Ericsson, which alleges that intellectual property is being unfairly used without a licensing deal.
As reported by the Economic Times, both Flipkart and Xiaomi must provide details on devices sold in the country, as well as evidence that these devices are compliant with 3G, EDGE and AMR requirements. This technology, belonging to Ericsson, is offered to tech firms as 'standard essential patents' and are often necessary for the operation of today's mobile devices.
Ericsson claims that Xiaomi infringes upon eight of its patents in total.
According to documents seen by the publication, technology giant Ericsson has attempted to thrash out a deal with Xiaomi for patent licensing, but this was bypassed. Xiaomi recently set up an Indian subsidiary Xiaomi technology India PVT, which makes the firm liable in India to pay damages should the allegations prove to be true.
While Xiaomi's head in India says he is yet to receive the court order, Ericsson says the firm has tried to deal with the matter with Xiaomi for three years. In a statement, the company said:
"It is unfair for Xiaomi to benefit from our substantial R&D investment without paying a reasonable licensee fee for our technology."
India is Xiaomi's most lucrative market outside of China, and so the news likely to hurt the company's bottom line -- as well as potentially the handset maker's long-term prospects in the country. According to research from Canalys, Xiaomi is now the third-largest mobile device vendor worldwide, and managed to double shipment rates from three to six percent in the last quarter.
India has seen significant growth in mobile device adoption in recent times, with shipments increasing 84 percent in Q3 2014 year-on-year.
Read on: In the enterprise
- AT&T halts fiber investment until net neutrality argument settled
- Verizon, Amazon, Apple hand out tech freebies ahead of Black Friday
- Samsung staff fear the axe in annual reshuffle
- FCC pushes back against Obama on net neutrality
- Enterprise network security takes backseat to speed: McAfee
- Samsung retaliates against Nvidia with chip patent lawsuit