In an interim order, the High Court had on December 8 restrained Xiaomi as well as online e-commerce site Flipkart from selling in India handsets of the Chinese mobile maker that run on the technology patented by Swedish technology company Telefonaktiebolaget LM Ericsson.
A bench headed by Justice Pradeep Nandrajog on Tuesday passed the "pro tem order" as Xiaomi had contended that Ericsson suppressed the fact that the Chinese mobile maker has also used chipsets of Qualcomm which has a licence to use patents of the Swedish company.
Xiaomi sells its handsets exclusively through e-commerce site Flipkart on every Tuesday, the court was told during the proceedings.
The bench was also told by senior advocate Kapil Sibal and advocate Ajit Warrier, appearing for Xiaomi, that on each Tuesday around one lakh units are expected to be sold on the site.
Therefore, as part of the "pro tem" or temporary measures, the bench asked Xiaomi to deposit Rs 100 per handset sold, towards royalty, in favour of the Registrar General of the Delhi High Court and the amount so deposited be kept in a fixed deposit.
With these temporary directions, the court disposed of the appeal filed by Xiaomi challenging the High Court's single-judge bench's December 8 order.
While disposing of the appeal the court has also directed Xiaomi to furnish an affidavit, before the next date of hearing before the single judge, disclosing the number of units sold by it till then and particulars of the invoices of the Qualcomm chipsets purchased by it.
Xiaomi in its appeal has alleged that Ericsson while obtaining the ex-parte injunction order of December 8 did not inform the court that the Chinese mobile maker also made, imported and sold handsets having Qualcomm chipsets for which Qualcomm has obtained a licence from the Swedish company.
Xiaomi has contended that it did not infringe Ericsson's patents as Qualcomm has obtained a licence from the Swedish company for its patented technology.
The High Court on December 8 had restrained Xiaomi or its agents from making, assembling, importing or offering for sale its devices which are infringing the mobile phone technology patented by Ericsson.
It had also directed the customs authorities to prevent import of Xiaomi phones that are infringing the patents of Ericsson and if any consignment is imported, the same be informed to the Swedish company and its objections be decided as per the Intellectual Property Rules.
The Court had also issued summons and notice to Xiaomi and Flipkart and directed them to file an affidavit disclosing the number of devices - that are AMR, EDGE and 3G compliant - sold by them in India till date.
They had to also indicate in the affidavit the revenue earned by selling these devices till date. The court had also appointed three local commissioners to visit the premises of Xiaomi and Flipkart where the devices are stored in order to inspect and collect documents as well as seal the infringing mobiles.
The order was passed on the plea of Ericsson that Xiaomi has been violating its eight patents pertaining to AMR, EDGE and 3G technologies in the field of telecommunication.
Ericsson has said that it had invited Xiaomi to use its Standard Essential Patent by obtaining a licence, but instead of doing so, the Chinese manufacturer launched its devices in India in July 2014.
A Standard Essential Patent is the patent for the core technology essential to create something of a particular technical standard. In this case, mobile phones cannot be made without the GSM, GPRS, EDGE and WCDMA technology, which is patented by Ericsson.
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