FRAND Licencing and its Legal Challenges in India

Abstract

The rapid advancement of Fifth-Generation (5G) wireless communication and the Internet of Things (IoT) has revolutionised global connectivity. These technologies depend heavily on technical standards to ensure interoperability between devices, networks, and applications. The patents that are indispensable for implementing these standards are known as Standard Essential Patents (SEPs).

To prevent SEP holders from abusing their dominant position, Standard Setting Organizations (SSOs) require them to licence their patents on Fair, Reasonable, and Non-Discriminatory (FRAND) terms. While FRAND aims to balance the interests of patent holders and technology implementers, disputes over its interpretation have become frequent and complex, often leading to litigation, antitrust investigations, and delays in innovation.

The legal and economic stakes are especially high in 5G and IoT ecosystems, where market entry barriers can hinder start-ups, SMEs, and developing economies. This research will examine the interplay between SEPs, FRAND obligations, and the innovation barriers that emerge when licencing practices become contentious.

Keywords: SEP, FRAND, Licence, 5G, IoT, Patent, Technology, SME.

Introduction

In our day to day life, we use multiple technologies covered by standards, and those everyday actions implicated hundreds of standard essential patents, or SEPs. Broadly speaking, a standard is a document or a technology that is defined by a standards body in a standard-setting process. Standards are often the result of many meetings over many years by industry representatives who work together to come to a consensus on a new technology. Of course, these companies also work separately to develop their own technologies, but the goal of working on a standard together is interoperability. Some commonly-known standards are USB, LTE, Wi-Fi, and others[1].

These patents are often referred to as standard essential patents (SEPs) because they are alleged to be “essential” to practicing the standard, even though the standard body never makes such a determination. SEPs are often “declared” to be essential by the patent holder to the SSO. Complex technological standards like Wi-Fi and cellular have thousands of patents relevant to each of the standard’s iterations[2].

India has seen an increase in litigation surrounding standard essential patents (SEPs) and fair, reasonable and non-discriminatory (FRAND) licencing commitments by SEP holders. As with every patent, the SEP owner also enjoys the privilege to licence its statutory rights, but it would have to be in line with its FRAND commitments[3].

A patentee has a right to initiate infringement litigation against unauthorised users, remedies wherein include injunction and/or damages inter alia[4]. To avoid legal uncertainty and guarantee a uniform application of rules when it comes to SEPs, new legislation is needed in India to clarify what FRAND terms mean, and the obligations stemming from a FRAND promise. Introducing clear rules on patent essentiality and validity checks should be reflected in a legislative text. At this moment, there is no mention of SEPs in either Indian Patent Act or Competition Act[5].

Standard Essential Patents and FRAND Commitments

A standard essential patent (SEP) is a patent that protects an invention essential to the implementation of a particular technology standard[6]. The Standards Organisations usually set their IPR policies which require their members to undertake to licence their SEPs on “Fair, Reasonable and Non-Discriminatory” (FRAND) terms[7].

The idea behind securing FRAND undertakings by SEP owners is to ensure that other market players are not exploited at the hands of SEP owners, who in absence of FRAND commitments, may demand excessive royalties, which may result in elimination of all competition from the market[8].

Legal Framework in India

1. The Patents Act, 1970

The statute that governs in relation to patents in India, is The Patents Act, 1970. The most important chapters in this Act in relation to licencing is Chapter XV which is Powers of the Controller and Chapter XVI which is Working of Patents, Compulsory Licences and Revocation. To be more specific, Section 84[9] is Compulsory licences and other sections in relation to compulsory licences are covered up till Section 92. Well, even if there is an inclusion of mechanisms for compulsory licences, there is no mention of FRAND terms and SEPs licences anywhere.

2. The Competition Act, 2002[10]

The Competition Act, 2002 aims to prevent any practices, within India, that may cause any adverse effect on competition and promote fair competition in the markets in India. Section 3 of the Competition Act, 2002 states, Anti-competitive agreements and Section 4 states, Abuse of dominant position. Competition Commission of India (CCI) analysed whether practice of SEP holder’s licence might constitute a violation of Section 4 where the CCI established that due to lack of alternatives in certain technologies, which is patented, proves through evidences that SEP holder has a dominant position. Also, indifferent way of calculating royalties on the basis of the product’s price which are in contradiction with the FRAND Commitment and hence there is a prima facie abuse of SEP holder’s dominant position[11]. This is itself shows that there are great chances of applying of excessive royalties from the one who implements.

The Patent’s Act and the Competition Act creates a question of who will have the jurisdiction in case of SEP or FRAND related disputes as their provisions overlap.

International Framework

Internationally, ETSI IPR policy which are SSO’s internal rules, necessitates the patent  holdersto give an undertaking where the licence will be irrevocable which will be specifically applicable for SEPs on FRAND terms, The objective itself is to create a balance between the interests and rights of the patent holders[12].

National IPR Policy (2016)

India’s National IPR Policy does highlight the balancing of patent’s rights and public interest but does not mention anything related to FRAND or SEP licencing[13].

Judicial Interpretation

1. Koninklijke Philips Electronics N.V. vs Rajesh Bansal and Ors. (2009)[14]

This case is also known as Philips case. It was the first SEP dispute related case in India. DVD manufacturers were sued by Philips because they used a patented technology without licence. They were importing parts of DVD under the brand names like Passion and Soyer.

The Court held that the defendants product have infringed and recognised that the patent was an SEP. Therefore, agreed to the royalty rates of Philips because the defendant could not prove that the rates were unfair, accepted the rates of approximately US $ 3.175 per DVD player.

2. Micromax Informatics Limited v. Telefonaktiebolaget LM Ericsson (CS(OS) No. 442/2013)[15]

In this case, the Micromax filed  a complaint to the Competition Commission of India that Ericsson is charging excessive and unfair royalties for their patents of GSM technology. The argument made by Micromax was that the royalty should be based on the patented part i.e. chip and not on the entire phone which was demand of Ericsson itself.

The Hon’ble court found that the royalty practices of Ericsson were discriminatory and against the FRAND terms and hence, ordered for investigation into Ericsson’s conduct as there was a possible violation of Section 4(2) of the Competition Act, 2002.

3. Intex Technologies (India) Ltd. Telefonaktiebolaget L. M Ericsson (2023)[16]

Ericsson, the owner of several Standard Essential Patents (SEPs), sued Intex for using its patented technology without a licence, after failed negotiations. The Delhi High Court’s Single Judge held that Ericsson’s 8 patents were valid and that Intex had prima facie infringed them.

The Division Bench clarified that SEP owners must disclose their SEPs and offer licences on FRAND terms to all willing parties to avoid “hold-up” situations. The Court found that Intex failed to raise a strong challenge to the patent validity and called it an unwilling licensee, upholding the earlier order.

Challenges

What is fair and reasonable can be subjective and would vary from context to context. This point of ambiguity has occasioned many disputes and litigations, particularly in industries where SEPs are common, like telecommunications and consumer electronics[17]. SEP owners hold contractual rights that allow them to prevent any use of their patents but however, obligated to grant licences to third parties under FRAND terms. The term “FRAND” lacks a precise definition, introducing ambiguity into SEP negotiations. The Commission notes that “fairness” and “reasonability” are “flexible” and context-dependent. The goal is to encourage transparent negotiations and propose rules to resolve disputes[18].

While competition laws generally avoid intervention in exclusionary intellectual property rights (IPR), competition law intervention in SEP litigation involving mobile phones revolves around the prevention of abuse of dominance. Patent owners can potentially abuse market dominance through practices like withholding licences, demanding unreasonable fees, imposing unfair or discriminatory licences, and using SEPs in anticompetitive ways. SEPs provide significant monopoly control to their owners, who may exploit this by leveraging standards to exclude competitors or extract excessive royalty payments[19].

The Patents Act and the Competition Act are related to each other. For example, Section 84(6)(iv) of the Patents Act requires efforts to procure licences on reasonable terms unless the patentee engages in any anti-competitive practices. The DHC held that “Patents Act Must Prevail over Competition Act in Exercise of Rights by Patentee”. This judgment raises a lot of questions as it is not in alignment with the global practices. Economic perspective is crucial and needs to be seen through the lens of IP law/SEP, and it can be better understood within the purview of the competition law[20]. This uncertainty creates delay in resolving the disputes and litigation costs.

In case a patent owner does not disclose their patent or agree to grant licences on FRAND terms for a patented technology that is required for the standard, it can result in a patent hold-up. The SEP owner may then demand excessive value for its patents, which may often be as high as the value of the standard itself. On the other hand, FRAND commitments have been interpreted to impose obligations on both the SEP owners and the prospective licencees. While the FRAND obligation require the SEP owner to be willing to offer the SEPs licence on FRAND terms and further provides the prospective licencee a defence of sorts to a claim of infringement, it is also essential that the prospective licencee/implementer secures the licence from the SEP owner and is not able to implement the patented technology without paying a reasonable market value for the licence thereof – resulting in a patent hold-out[21].

When compared to European Union and Japan, India lacks transparency in SEPs or FRAND licencing. While talking about South Korea, a more positive approach has been taken by them by penalising abuses in relation to SEP and have included their SEP related laws in competition law whereas India lacks such kind of enforcement in infringement[22].

Obtaining SEP licences can be excessively expensive for Indian firms, particularly SMEs. This can discourage innovation and impede the ability of local businesses to compete globally[23].

Recent Developments

There has been a remarkable growth in the number of legal proceedings in relation to SEPs and FRAND licencing commitments brought up by the SEP holders[24]. The Courts in India have tried to bring harmony in between the basic principles of laws in India and International Standards[25].

In the case of Ericsson  v. Lava (2024), the court awarded damages of INR 2.44 billion i.e. 29.29 USD million in addition to 5% of the annual interest until it is paid. It was the highest damages awarded by the court in patent case for the first time. The royalty rate was fixed at 1.05%  on the net sales value of smartphones which were sold in India by the manufacturer, instead of chipsets[26].

The Court made it clear that the SEPs holder can wholly licence their portfolio of SEPs and indicated a structured interim relief in the favour of SEP holders[27].

Recently, in the SEP symposium held in April 2025, acknowledged that India has began involving the stakeholders on SEP policy and there has been an impact seen in SEP licencing on startups and also there has been an increase in the need of frameworks for transparency[28].

A notable evolution in India is taking place in relation to determination of royalty, interim orders and licencing portfolios[29].

Suggestions

1. There must be clarity in the statutory provisions in relation to the FRAND terms.
2. There must be a regulatory criteria to decide the FRAND rate.
3. A separate tribunal or ADR mechanism should be established to resolve SEP or FRAND related disputes.
4. Licence terms should be disclosed in order to promote transparency and prevent discrimination.
5. Boundaries need to be clear between Competition Commission of India and IP authorities in order to prevent clashes regarding jurisdiction and promote coordination.
6. Training must be given to both judges and patent officers regarding the technology and law interrelation.

Conclusion.

FRAND or SEP licencing cannot be dealt outside of either Patents law or Competition law including innovation policy. There has to be fairness in competition by balancing both the patent holders rights and public interest. Judiciary in India has recognised the importance of SEP or FRAND but still needs to develop in enforcing it properly. India is still in its transitional state specifically when the economy is 5G-driven. Technology is in progress and so should be the market participation, providing equal opportunity and eliminating monopoly.

Bibliography

1. What Are Standard Essential Patents, Haynes Boone (May 3, 2021), https://www.haynesboone.com/news/publications/what-are-standard-essential-patents.
2. Fish & Richardson, Introduction to SEP & FRAND Issues, (Dec. 11, 2024), https://www.fr.com/insights/thought-leadership/blogs/introduction-to-sep-frand-issues/.
3. Ekta Sarin & Nikhil Sharma, How India Has Established Itself as a Key Venue for SEP/FRAND Litigation, (Nov. 19, 2024), https://www.iam-media.com/guide/india-managing-the-ip-lifecycle/2025/article/how-india-has-established-itself-key-venue-sepfrand-litigation.
4. Rahul Beruar, India: SEPs and FRAND – Litigation, Policy and Latest Developments, (Oct. 27, 2023), https://www.iam-media.com/hub/sepfrand-hub/2023/article/india-seps-and-frand-litigation-policy-and-latest-developments.
5. Enrico Bonadio & Mahak Kansara, Recent Indian Case Law on Standard Essential Patents | Kluwer Patent Blog, (Oct. 23, 2023), https://legalblogs.wolterskluwer.com/patent-blog/recent-indian-case-law-on-standard-essential-patents-2/.
6. Standard Essential Patents, patents, https://www.wipo.int/en/web/patents/topics/sep (last visited Oct. 21, 2025).
7. The Patents Acts, 1970.
8. The Competition Act, 2002
9. Gregory Sidak, The Cambridge Handbook Of Technical Standardization Law: Antitrust And Patents (Feb. 8, 2016 ed.).
10. Intellectual Property Rights (IPRs), ETSI, https://www.etsi.org/intellectual-property-rights (last visited Oct. 21, 2025).
11. National Intellectual Property Rights Policy, (2016).
12. FRAND Litigation and SEP Dispute- Indian Perspective, AIPPI (Jan. 31, 2025), https://www.aippi.org/news/frand-litigation-and-sep-dispute-indian-perspective/.
13. Khurana And Khurana, Standard Essential Patents (SEPs) and FRAND: A Delicate Balance in Innovation, Khurana And Khurana (Sept. 28, 2024), https://www.khuranaandkhurana.com/2024/09/28/standard-essential-patents-seps-and-frand-a-delicate-balance-in-innovation/.
14. Standard Essential Patents and Abuse of Dominance in India – Chandrawat & Partners Law Firm, https://chandrawatpartners.co/standard-essential-patents-and-abuse-of-dominance-in-india/ (last visited Oct. 21, 2025).
15. Mohit Yadav, Kailash Chauhan & Tina Neogi, Standard Essential Patents (SEPs), Holder’s Abusive Dominant Position: Indian Perspective, Competition Commission of India Journal on Competition Law and Policy 177 (2024).
16. Samidha Jha, “FRAND Theft Auto”: Navigating Standard Essential Patents in India, NLIU Law Review (Apr. 16, 2025), https://nliulawreview.nliu.ac.in/blog/frand-theft-auto-navigating-standard-essential-patents-in-india/.
17. The Invisible Architects: SEPs in Tech Industries – An Indian Perspective, https://www.einfolge.com/blog/the-invisible-architects-seps-in-tech-industries-an-indian-perspective?utm_source=chatgpt.com (last visited Oct. 21, 2025).
18. Jan, Victory for SEPs, asia (May 13, 2024), https://law.asia/patent-infringement-lawsuit-outcome/.
19. Priya Nair, Advancing SEP Policy and Innovation Opportunity in India, ACT | The App Association (May 29, 2025), https://actonline.org/2025/05/29/advancing-sep-policy-and-innovation-opportunity-in-india/.
20. Lee Branstetter & Kamal Saggi, Intellectual Property Rights, Foreign Direct Investment, and Industrial Development (2009), http://www.nber.org/papers/w15393.pdf.

[1] What Are Standard Essential Patents, Haynes Boone (May 3, 2021), https://www.haynesboone.com/news/publications/what-are-standard-essential-patents.

[2]  Fish & Richardson, Introduction to SEP & FRAND Issues, (Dec. 11, 2024), https://www.fr.com/insights/thought-leadership/blogs/introduction-to-sep-frand-issues/.

[3] Ekta Sarin & Nikhil Sharma, How India Has Established Itself as a Key Venue for SEP/FRAND Litigation, (Nov. 19, 2024), https://www.iam-media.com/guide/india-managing-the-ip-lifecycle/2025/article/how-india-has-established-itself-key-venue-sepfrand-litigation.

[4] Rahul Beruar, India: SEPs and FRAND – Litigation, Policy and Latest Developments, (Oct. 27, 2023), https://www.iam-media.com/hub/sepfrand-hub/2023/article/india-seps-and-frand-litigation-policy-and-latest-developments.

[5] Enrico Bonadio & Mahak Kansara, Recent Indian Case Law on Standard Essential Patents | Kluwer Patent Blog, (Oct. 23, 2023), https://legalblogs.wolterskluwer.com/patent-blog/recent-indian-case-law-on-standard-essential-patents-2/.

[6] Standard Essential Patents, patents, https://www.wipo.int/en/web/patents/topics/sep (last visited Oct. 21, 2025).

[7] Rahul Beruar, supra 4.

[8] Id.

[9] The Patents Acts, 1970.

[10] The Competition Act, 2002

[11] J. Gregory Sidak, The Cambridge Handbook Of Technical Standardization Law: Antitrust And Patents (Feb. 8, 2016 ed.).

[12] Intellectual Property Rights (IPRs), ETSI, https://www.etsi.org/intellectual-property-rights (last visited Oct. 21, 2025).

[13] National Intellectual Property Rights Policy, (2016).

[14] FRAND Litigation and SEP Dispute- Indian Perspective, AIPPI (Jan. 31, 2025), https://www.aippi.org/news/frand-litigation-and-sep-dispute-indian-perspective/.

[15] Id.

[16] Id.

[17] Khurana And Khurana, Standard Essential Patents (SEPs) and FRAND: A Delicate Balance in Innovation, Khurana And Khurana (Sept. 28, 2024), https://www.khuranaandkhurana.com/2024/09/28/standard-essential-patents-seps-and-frand-a-delicate-balance-in-innovation/.

[18] Standard Essential Patents and Abuse of Dominance in India – Chandrawat & Partners Law Firm, https://chandrawatpartners.co/standard-essential-patents-and-abuse-of-dominance-in-india/ (last visited Oct. 21, 2025).

[19] Id.

[20]  Mohit Yadav, Kailash Chauhan & Tina Neogi, Standard Essential Patents (SEPs), Holder’s Abusive Dominant Position: Indian Perspective, Competition Commission of India Journal on Competition Law and Policy 177 (2024).

[21]  Rahul Beruar, supra 4.

[22] Samidha Jha, “FRAND Theft Auto”: Navigating Standard Essential Patents in India, NLIU Law Review (Apr. 16, 2025), https://nliulawreview.nliu.ac.in/blog/frand-theft-auto-navigating-standard-essential-patents-in-india/.

[23] The Invisible Architects: SEPs in Tech Industries – An Indian Perspective, https://www.einfolge.com/blog/the-invisible-architects-seps-in-tech-industries-an-indian-perspective?utm_source=chatgpt.com (last visited Oct. 21, 2025).

[24] Ekta Sarin & Nikhil Sharma, supra 3.

[25] Rahul Beruar, supra 4.

[26] Jan, Victory for SEPs, Law.asia (May 13, 2024), https://law.asia/patent-infringement-lawsuit-outcome/.

[27] Enrico Bonadio & Mahak Kansara, supra 5.

[28] Priya Nair, Advancing SEP Policy and Innovation Opportunity in India, ACT | The App Association (May 29, 2025), https://actonline.org/2025/05/29/advancing-sep-policy-and-innovation-opportunity-in-india/.

[29] Lee Branstetter & Kamal Saggi, Intellectual Property Rights, Foreign Direct Investment, and Industrial Development (2009), http://www.nber.org/papers/w15393.pdf.