Introduction

For years, the narrative surrounding Standard Essential Patents (SEPs) in India was one of protracted negotiations and strategic delays. Implementers who were often accused of practising efficient infringement, could leverage the slow pace of the judicial system to continue using critical technologies royalty-free while licensing discussions languished in a seemingly endless back-and-forth. However, 2025 will be remembered as the moment the music stopped. In a decisive pivot, Indian courts have systematically dismantled the strategic advantages of delay, guiding to a robust pro-enforcement regime. This new era is built on three pillars: a judicial intolerance for ‘hold-out’ tactics, the imposition of significant interim financial deposits to ensure litigants have skin in the game, and a clear demarcation of regulatory boundaries that firmly establishes the primacy of the Patents Act, 1970 in resolving licencing disputes.

The Demise of ‘Hold-Out’: Interim Deposits and the Unwilling Licensee

The most profound operational shift has been the judiciary’s refusal to allow infringement to be profitable during litigation. Courts have moved to assess the willingness of a party to take a licence on Fair, Reasonable, and Non-Discriminatory (FRAND) terms not by their stated intentions, but by their tangible actions. The doctrine of the unwilling licensee has been refined into a tool to compel meaningful engagement from the outset.

This judicial philosophy was powerfully reinforced in the 2025 case of Dolby International v. Lava International (2025). The Delhi High Court addressing a dispute over Dolby’s audio coding technologies, mandated that Lava deposit over ₹20 crore (approximately £2 million) as a pro-tem (temporary) security deposit pending the final outcome of the litigation. Crucially, the Court clarified the legal standard for such interim orders, holding that unlike a traditional injunction, which requires a detailed examination of the patent’s validity, essentiality, and the balance of convenience, a pro-tem order is primarily a measure to balance the equities between the parties. The determining factor was the conduct of the implementer during negotiations. Lava’s failure to present a substantive counter-offer over a six-year period was deemed prima facie evidence of them being an unwilling licensee,  justifying the security deposit to ensure the patent holder was not left without remedy during the lengthy trial period. The court explicitly rejected the common information asymmetry defence, stating that a SEP holder is not required to furnish confidential third-party licence agreements before an implementer must make its own FRAND counter-offer. This decision builds directly on the foundation laid by the landmark March 2024 judgment in Telefonktiebolaget LM Ericsson v. Lava International Ltd, which first crystallised the unwilling licensee doctrine in Indian jurisprudence. In that case, the Delhi High Court awarded Ericsson approximately ₹244 crores (£23 million) in damages, holding that years of delay and a failure to present a concrete counter-offer stripped an implementer of equitable defences and confirmed its status as an unwilling licensee. Together, these judgments send an unequivocal message: the era of using litigation delays as a commercial strategy is over.

A New Damages Paradigm: From Royalties to Punitive Lost Profits

A particularly striking development has been the judiciary’s aggressive new approach to calculating damages, especially in cases where defendants choose not to cooperate or abandon proceedings. The courts have demonstrated a willingness to move beyond a simple FRAND royalty calculation and embrace a lost profits methodology based on a theoretical market capture, a move that carries a distinctly punitive flavour.

The primary caution is the case of Communication Components Antenna Inc. v. Ace Technologies Corp.. In a related matter to this, the Delhi High Court ordered the defendant to deposit a staggering ₹290 crores as security. However, it is the court’s methodology in a related matter that signals a broader shift. In a dispute involving a defendant who abandoned the proceedings and refused to disclose sales data, the court was left with an evidentiary vacuum. Instead of defaulting to a conservative or statutory measure, it adopted the plaintiff’s market analysis. The court calculated damages by estimating the total addressable market for the products in question and then making a bold assumption: but for the defendant’s infringement, the patent holder would have captured 50% of that market. This methodology resulted in a monumental damages award of approximately ₹217 crores (£21 million).

This approach serves as a powerful judicial tool to compel disclosure and active participation in legal proceedings. It signals to potential infringers that stonewalling or hiding sales data will not be tolerated and may, in fact, lead to a far more severe financial outcome. While proponents argue this deters bad-faith litigation tactics, critics contend it verges on ‘speculative justice,’ creating the risk of windfall damages that may not reflect the patentee’s actual loss. This debate notwithstanding, the precedent has been set: non-cooperation carries an immense financial risk.

The Regulatory Moat: Supreme Court Curtails the Competition Watchdog

The long-standing jurisdictional friction between the Patents Act, designed to protect innovation, and the Competition Act, designed to prevent market abuse, saw a decisive resolution in September 2025. For now, this turf war has been settled firmly in favour of the patent regime.

In Competition Commission of India (CCI) v. Monsanto Holdings Pvt Ltd, the Supreme Court of India delivered a landmark ruling by dismissing the CCI’s appeal against a Delhi High Court order that had quashed its investigation. The Court affirmed that once the original informant (the party that filed the complaint) and the patent holder reach a private settlement, the very substratum of the competition probe vanishes. This ruling effectively establishes the Patents Act as a complete code for resolving disputes arising from the exercise of patent rights, significantly limiting the CCI’s power to investigate alleged abuse of dominance in patent licensing after a commercial resolution has been achieved.

This principle was swiftly echoed by the National Company Law Appellate Tribunal (NCLAT) in Swapan Dey v. CCI & Vifor International, where it similarly held that the CCI lacked jurisdiction over alleged anti-competitive conduct related to the licensing of a patented pharmaceutical drug.

However, in a seemingly contradictory move, the CCI, in In Re: Air Works India v. GMR Hyderabad, refused to terminate its investigation despite a private settlement between the parties. The Commission argued that its proceedings are inquisitorial and in rem (concerning a matter of public interest), meaning its duty to investigate potential market harm cannot be extinguished by a private agreement. This creates a compelling legal tension: while the Supreme Court has provided a clear directive in cases with a settled informant, the CCI’s defiant stance suggests it may continue to assert jurisdiction where it perceives a broader public interest, leaving a sliver of uncertainty in an otherwise clarified domain.

Global Context: A Worldwide Hardening

India’s decisive pro-enforcement shift is not happening in a vacuum. It mirrors a global trend where courts in key jurisdictions are taking a stricter stance against SEP infringement and hold-out tactics. In late 2024, the Unified Patent Court (UPC) in Europe granted its first SEP injunction in Panasonic v. Oppo, explicitly citing the implementer’s overall conduct and delays in negotiation as a key justification. This focus on behaviour over isolated offers aligns perfectly with the approach now entrenched in the Indian courts.

Similarly, the UK Court of Appeal in InterDigital v. Lenovo (2024) upheld a decision requiring royalty payments for past infringement extending beyond the standard six-year limitation period. The court reasoned that a FRAND licence, by its nature, must compensate for the entire period of use if the licensee wishes to avoid an injunction against future sales. These international developments lend significant credence to the direction taken by the Indian judiciary, suggesting a growing global consensus on the need for more robust and predictable SEP enforcement.

For SEP holders, India has transformed into a viable and powerful forum for enforcement. For implementers, the message is equally clear, “the age of efficient infringement is definitively over.”

References

1. Dolby International Ab & Anr vs Lava International Limited, I.A. 9655/2024 in CS(COMM) 350/2024, Order dated 10 July 2025, High Court of Delhi, para 108.
2. Telefonktiebolaget Lm Ericsson(Publ) vs Lava International Ltd, CS(COMM) 65/2016, Judgment dated 28 March 2024, High Court of Delhi, para 678.
3. Communication Components Antenna Inc vs Ace Technologies Corp. And Ors, I.A. 36658/2024 in CS(COMM) 1222/2018, Order dated 1 July 2025, High Court of Delhi, para 44.
4. Competition Commission of India v. Monsanto Holdings Pvt. Ltd., SLP (C) No. 25026/2023, Order dated 2 September 2025, Supreme Court of India, paras 5, 7. It is important to note that the Supreme Court left the broader questions of law open for future cases, indicating the jurisdictional debate may not be entirely settled.
5. Swapan Dey v. Competition Commission of India & Vifor International (AG), Competition Appeal (AT) No. 5 of 2023, Order dated 30 October 2025, National Company Law Appellate Tribunal, para 12.
6. In Re: Air Works India (Engineering) Pvt Ltd v. GMR Hyderabad International Airport Ltd, Case No. 30 of 2019, Order dated 15 September 2025, Competition Commission of India, paras 31, 66-67.
7. Panasonic Holdings Corporation v. Guangdong OPPO Mobile Telecommunications Corp. Ltd. & OROPE Germany GmbH, UPC_CoA_298/2024, Order dated 24 September 2024, Unified Patent Court Court of Appeal, paras 57-58.