Patent Courts in the US, UK and EU have generally been cautious about granting interlocutory orders in Standard Essential Patent (“SEP”) cases against implementer(s). This reluctance understandably stems from the inherent complexity in the nature of the patents, technology, implementation, licensing terms and cross-claims. However, the Indian Courts appear to have departed from this position, citing unique local factors.

Unique Indian Market Conditions

Implementers in India, largely in the telecom sector, are often new entrants exploring the industry possibly for the first time. Such implementers, though well-intentioned and driven by high aspirations, typically have limited means and assets when first accessing and implementing SEP technology. Consequently, it is not uncommon for such implementers to have either ceased operations or even become subject to insolvency proceedings before legal action is initiated by SEP holders.

This creates a unique challenge: even if the SEP holder were to eventually succeed in litigation, it may end up unable to recover costs or damages in its favor from the implementer, especially when the implementer runs into financial distress with no assets or means to pay.

In such a scenario, it is critical that a balanced approach be taken by courts where rights of both the implementer and the SEP holder are borne in mind. Given that SEP litigation is started after many rounds of discussions and negotiations, an interlocutory order directing the implementer to first deposit notional/pro-tempore royalties or license fees into the account of the court, which can subsequently be withdrawn by the victorious party, appears to be a pragmatic solution.

Courts taking cognizance of implementer’s financial stress

Such a solution was adopted in a recent decision by the Dehli High Court. Noting that the Defendant had lost almost 65% of its share value, an order was issued during the trial, directing 25% of the claimed damages (USD 33,461,679) to be deposited into the Court. This order was in addition to monies already deposited by the implementer at the interlocutory stage.[i]

While this order was passed in a patent dispute simpliciter with the contesting Defendant being a Korean company, it reflects trends in disputes involving SEPs as well.

Interim reliefs in SEP disputes – The ‘Domino Effect’

Invariably, the post-trial final decree takes a considerable amount of time (at least eighteen to thirty-six months). In the ensuing time, the implementer may have had different business cycles. In most cases, the implementer would initially be in robust business during the ongoing negotiations and SEP litigation, compelling it to actively participate and defend, but would later face a downward spiral, either going into liquidation or out of business.

This has been identified as the ‘domino effect’ by Indian Courts, where there is a shift in bargaining leverage to implementers in SEP licensing negotiations, devaluation of existing patent-protected technologies and disincentivizing firms from developing new technologies.[ii]

Relevant factors surrounding most known SEP disputes in India, throws light on unique trends and patterns:

• Either implementer or patent holder, is located outside India
• In some cases, time taken to resolve a dispute from the date of filing to final disposal often exceed the lifespan of the patent itself; and
• the implementer may have either run out of business or was subjected to insolvency proceedings.

The question that courts often grapple with revolves around striking a delicate balance between balancing interests of the patent holder and obligations of the implementer.

The Delhi High Court recently vide its order dated 20^th February 2025 delivered a judgment in three inter-connected suits involving Philips Standard Essential Patents related to the manufacturing, storage and replication of data in DVDs.[iii] In the first of these proceedings, the suit patent lapsed as early as on 12.02.2015 while the suits were pending final adjudication.

Despite the suit patent lapse, the Court held that the Defendants were not only unwilling licensees but were also willful infringers who were continuously using the patent despite being aware of the patentee’s rights. In such circumstances, the Court awarded damages in excess of USD 692,316 along with interest from suit filing till realization thereof.

The moot issue is whether the Implementer has the means to pay such damages to the SEP Holder, awarded by the Court a decade after the institution of the suit.

Evolution of ‘Pro-Tempore’ Orders

The concept of Pro-Tempore orders emerged in the Indian Courts as early as 2014 when the Delhi Appeal Court, modified an ex-parte ad-interim injunction passed by the trial court, and passed a ‘pro-tem’ order where the Implementer was directed to deposit royalties.[iv]

In 2024, it was further clarified that an order for a pro-tem deposit should be made only after a prima facie finding of essentiality and validity of the suit patents.[v]

Recently in Dolby International vs. Lava International Limited,[vi] it was qualified that while such orders are to be passed after a prima facie assessment of merits, they cannot be likened to an injunction.

Such precedents clearly illustrate the Indian Courts’ recognition that deposits of royalty into court, as an interim measure are necessary to ensure that the object of the litigation would not be defeated.

Conclusion:

In cases where the implementers are located outside India and/or do not have any sufficient assets in India or otherwise, it is imperative that the SEP Holders’ interests are secured as any decree awarding costs or royalties or damages would be rendered otiose., unless courts ensure that the implementer has sufficient funds to satisfy such order/decree.

While interim orders are likely to present a viable solution, such orders directing deposits of royalty or damages by the implementer must be made only after a prima facie assessment of the merits of the proceedings.

The Delhi High Court’s recent orders are a step in the right direction as courts have endeavored to recognize the delicate balance between securing  interests of the SEP Holder  who spends enormous time, monies and efforts in enforcing its rights and balancing the rights of the Implementer, which are passed only after assessing the merits of the proceedings at the interlocutory stage.

 

[i] Communication Components vs. Ace Technologies – Order dated 01.07.2025

[ii] Intex Technologies (India) Limited vs. Telefonaktiebolaget L M Ericsson – 2023:DHC:2243-DB

[iii] CS (COMM) No. 423 of 2016, CS (COMM) 499 of 2018, 519 of 2019 – order dated 20.02.2025.

[iv] Xiaomi Technology & Anr vs. Telefonaktiebolaget LM Ericsson (PUBL) & Anr 2014 SCC OnLine Del 7688.

[v] Guangdong OPPO Mobile Telecommunications Corp Limited & Ors vs. Interdigital Technology Corp & Ors 2024:DHC:4547:DB; [v] Nokia Technologies OY vs. Guangdong OPPO Mobile Telecommunications Corp Limited & Ors., 2023:DHC:4465-DB

[vi] C.S (COMM) NO. 350/2024 – Order dated 10^th July 2025