High Court Empowered to Issue “Pro-Tem Security” Order in Case of Non-Payment for Use of SEP Holder’s Technology

Keywords: SEP, Pro-tem, Nokia, Oppo

The Delhi High Court, on 4^th July 2023, ruled that High Courts possess the authority to pass a “pro-tem security deposit” order where an implementer fails to make payments to a Standard Essential Patent (SEP) holder while deriving benefits by using its technology.

A pro-tem order means a temporary arrangement that requires the implementer to make interim payments as security, safeguarding the interests of the SEP holder till the dispute is resolved.

A division bench of Justice Manmohan and Justice Saurabh Banerjee opined that the Court has the power to pass such orders without a detailed exploration of merits as they “promote a modernized and fair patent system while encouraging ingenuity and creativity and intellectual activity. It also provides a conducive environment for knowledge transfer.”[1] The order will ultimately depend on the factual matrix of each case.

The bench made these remarks while setting aside an order passed by a single judge dismissing Nokia’s application seeking a direction requiring Oppo (a Chinese smartphone manufacturer) to deposit an amount as “royalty” for alleged infringement of its patent in cellular technology In 2018, Oppo obtained a license from Nokia for utilizing her SEPs at FRAND rates which expired in 2021. Nokia filed an appeal challenging the dismissal of its application which sought an interim security deposit from Oppo based on the latest counter offer for a global license of Nokia’s Standard Essential Patents or an amount equivalent to the royalty paid under the 2018 Agreement. Furthermore, the court instructed Oppo to deposit interim security in proportion to number of devices sold in India. [2]

The Court allowed Nokia’s appeal and directed Oppo to deposit the last paid amount within four weeks as per the 2018 Agreement.

Written by- Ananya Upadhye, College name – ILS Law College, Pune, Semester- 6th an intern under Legal Vidhiya

[1] Nokia Technologies v Guangdong Oppo Mobile Telecommunication Corp

[2] https://www.livelaw.in/high-court/delhi-high-court/delhi-high-court-pro-tem-security-order-implementer-payments-standard-essential-patent-holder-technology-231788?infinitescroll=1

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