Xiaomi, the surging smartphone vendor in India, is facing the heat in the country as the Delhi High Court in an interim order has restrained Xiaomi from selling its handsets.
Online e-commerce site Flipkart, its distribution partner, also cannot sell handsets of the Chinese mobile maker in the country.
Xiaomi earlier faced data related issues in India because Indian defense forces asked its employees not to use Xiaomi phones because they are hosting the Indian mobile users’ data in China. Xiaomi later promised that it will set up a data center in India to solve the confusion.
The HC order will have a major impact on Xiaomi that has become the third largest vendor in the world in Q3 2014, according to IDC. Xiaomi improved its smartphone market share to 5.3 percent from 2.1 percent. Recently, Xiaomi said India is an important market.
The HC order follows complaints from telecom network vendor Ericsson that alleged that Xiaomi is using a mobile technology patented by Ericsson.
Ericsson said that Xiaomi has violated its eight patents pertaining to AMR, EDGE and 3G technologies in the field of telecommunications. Ericsson, which has filed similar cases against Micromax, has said that it had invited Xiaomi to use its patented technology by obtaining a license, but instead of doing so, the Chinese manufacturer launched its devices in India in July 2014.
After launching smartphones in India, Xiaomi started eating into the market share of Samsung, the Korean phone vendor.
IDC earlier said Samsung smartphone shipments decreased to 78.1 million from 85 million. Apple smartphone market share dipped to 12 percent from 12.9 percent. Q3 smartphone market share of Lenovo increased to 5.2 percent from 4.7 percent, while LG increased market share to 5.1 percent from 4.6 percent.
The court has also 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.
Media reports said Justice G P Mittal 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 Ericsson and its objections be decided as per the Intellectual Property Rules.
“I am satisfied that plaintiff (Ericsson) has made out a prima facie case for grant of ad interim injunction in its favour. The balance of convenience also lies in favour of plaintiff and in the absence of an injunction order, plaintiff will suffer irreparable loss and injury,” the court said.
It 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 have to also indicate in the affidavit the revenue earned by selling these devices till date. The Delhi high court has 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 local commissioners have to submit their report within four weeks.