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Standard-essential patent litigation contains an inherent imbalance. A SEP holder that has committed to license its technology on fair, reasonable and non-discriminatory (“FRAND”) terms cannot treat exclusion from the market as an ordinary enforcement response. Yet an implementer may continue selling standards-compliant products while validity, essentiality, infringement and FRAND terms remain contested, often for years.
The resulting delay is not commercially neutral. The implementer continues to monetise the standardised technology; the SEP holder continues to wait for adjudication. The difficult question is whether a court can correct that imbalance before liability itself has been established.
That was the central problem before the Delhi High Court in InterDigital Patent Holdings Inc. & Anr. v. Shenzhen Transsion Holdings Co. Ltd. & Ors.1 InterDigital alleged that smartphones sold by Transsion under the Tecno, Infinix and iTel brands used its standard-essential technology relating to 3G, 4G, 5G and HEVC without a licence. While the infringement suits remained pending, InterDigital sought pro tem security against the continued unlicensed manufacture, import and sale of the relevant devices.
The application placed two principles in direct tension. If security could be ordered without sufficient scrutiny of validity, essentiality and infringement, an implementer could effectively be required to secure a liability that had not yet been established. But if those issues had to be examined with the same intensity required for an interim injunction, or substantially determined before any security could be ordered, the remedy would lose much of its purpose. By the time that threshold was crossed, the commercial advantage generated by years of continued sales may already have accrued.
The issue was therefore not whether InterDigital had finally proved infringement or whether its proposed royalty was FRAND. The Court was deciding something more immediate: what degree of judicial satisfaction is necessary before the economic risk of continued implementation can be provisionally secured?
That question could not be answered on a clean slate.
The 2024 Division Bench ruling in Guangdong Oppo Mobile Telecommunications Corp. Ltd. & Ors. v. InterDigital Technology Corporation & Ors.2 imposed an important jurisprudential constraint. As recorded and considered in the present judgment, the Division Bench had made clear that, in a contested case, a court must form a prima facie view before granting interim relief. It had also clarified that Nokia Technologies OY v. Guangdong Oppo Mobile Telecommunications Corp. Ltd. & Ors.3 was not authority for the proposition that pro tem security could be ordered without considering the defences raised by the implementer, and that such security could not assume a punitive character.
The Single Judge therefore had to preserve the practical utility of pro tem security without diluting the prima facie scrutiny required by binding appellate authority. The significance of the judgment lies in how it navigates that boundary.
The Jurisprudential Boundary
The Court’s central move is to distinguish the existence of a prima facie threshold from the intensity of the inquiry required to cross it.
Transsion’s objection went to the foundations of SEP enforcement. A declaration to a standard-setting organisation does not, by itself, establish that a patent is valid or genuinely essential to a standard. Essentiality may be self-declared; validity remains open to challenge; and infringement still requires the necessary evidentiary connection between the patent, the relevant standard and the accused product. On that basis, Transsion argued that security could not precede a meaningful assessment of those questions.
That objection had particular force after Oppo v. InterDigital. The Single Judge could not treat pro tem security as an automatic consequence of an asserted SEP portfolio, nor could the Court bypass substantive defences merely by describing the relief as equitable.
But the converse proposition, that an application for security requires substantially the same examination as an application to restrain sales, would collapse two distinct remedies into one.
An interim injunction alters market conduct. It may prevent an implementer from selling its products before the underlying patent dispute is finally determined. Pro tem security does not produce the same consequence. It allows sales to continue while preserving security against the possibility that the SEP holder ultimately succeeds. It does not, by itself, establish infringement, determine a FRAND rate or confer a final royalty entitlement.
The Court’s approach therefore preserves the prima facie requirement while calibrating the depth of scrutiny to the nature of the relief sought. The Division Bench constraint is not displaced; it is applied through the distinction between protective security and prohibitory relief.
This is the judgment’s central jurisprudential contribution.
The Court did not hold that validity, essentiality or the implementer’s defences were irrelevant. Nor did it reduce SEP declarations to presumptive proof of infringement. Rather, it treated pro tem security as an equitable remedy capable of being granted upon a prima facie assessment informed by the wider evidentiary record, without requiring the Court to conduct at this stage the full technical adjudication reserved for the substantive proceedings.
That wider record included the history of FRAND negotiations.
InterDigital relied upon years of engagement, the provision of numerous claim charts, technical discussions, offers and counter-offers, and its proposal to resolve the licensing dispute through arbitration. Transsion, in turn, contested essentiality and validity, disputed InterDigital’s licensing position and challenged the evidentiary foundation for security. The Court was therefore not examining an abstract disagreement over patent rights. It was assessing the parties’ conduct against the commercial reality that the accused products continued to be sold while no licence had been concluded.
This reflects a broader development in SEP litigation. Negotiation conduct is increasingly becoming part of the architecture of interim relief. A party’s position during FRAND negotiations may not determine validity or infringement, but it can affect the equitable assessment of whether continued implementation should remain entirely unsecured.
The Court’s treatment of quantum is where this distinction becomes concrete.
InterDigital sought security by reference to its own licensing offer. Transsion resisted that basis and challenged the quantum sought. The Court did not simply adopt InterDigital’s demand as a provisional royalty determination. Since Transsion’s last counter-offer was expressed on an annual basis, the Court calculated its cumulative value over the period for which InterDigital had sought execution of the FRAND agreement and directed security equivalent to one-fifth of that cumulative amount.
The distinction is critical.
The one-fifth fraction was not applied merely to a single annual counter-offer. Nor did the Court adopt InterDigital’s own licensing demand as the measure of interim liability. The defendant’s annual counter-offer supplied the commercial reference point; its cumulative value over the period for which the FRAND agreement was sought supplied the relevant base; and one-fifth of that figure supplied the quantum of security.
That methodology should not be elevated into a universal formula for future SEP disputes. The judgment itself surveys a line of Delhi High Court decisions in which pro tem protection has been quantified through materially different reference points. In Nokia v. Oppo[3], the prior licensing relationship supplied objective material relevant to the interim arrangement. In Atlas Global Technologies LLC v. TP-Link Technologies Co. Ltd. & Ors.4, one-fifth of the defendant’s counter-offer featured in the security determination. Other cases have relied upon plaintiff rates, previous royalties, per-device amounts, bank guarantees or other case-specific forms of security.
The jurisprudence therefore does not disclose a single mathematical rule. Quantum remains an equitable and fact-sensitive exercise.
What matters in the present case is the relationship between the methodology and the character of the relief. By using the defendant’s own commercial position as the starting reference point, calculating its cumulative value over the period for which InterDigital sought execution of the FRAND agreement, and then applying only a one-fifth fraction, the Court avoided treating InterDigital’s asserted royalty demand as judicially established. Equally, it refused to allow continued implementation to remain wholly unsecured while the substantive dispute proceeded.
The result is deliberately provisional.
The Court did not determine that Transsion’s counter-offer represented the correct FRAND rate. It did not determine that the cumulative figure derived from that counter-offer represented InterDigital’s ultimate entitlement. And the application of one-fifth to that figure did not transform the resulting security into a judicially determined royalty.
Security is not royalty adjudication: That distinction also explains why the judgment should not be read as creating a shortcut around patent adjudication. The Court did not permit an SEP holder to obtain, through an interlocutory application, what it must ultimately establish in the suit. It addressed a different problem: whether the period required to establish those rights should itself operate entirely for the commercial benefit of the party continuing to implement the technology.
The line drawn by the Court is therefore narrow but consequential. Oppo v. InterDigital prevents pro tem security from becoming automatic. The present judgment prevents the prima facie requirement from being applied in a manner that makes pro tem security functionally indistinguishable from a full interim injunction adjudication.
The jurisprudential balance lies between those two extremes.
Conclusion
The importance of InterDigital v. Transsion lies ultimately in its treatment of time.
In ordinary patent litigation, delay may postpone enforcement. In SEP litigation, delay can alter bargaining power. The implementer remains in the market, continues selling standards-compliant products and retains the economic benefit of postponing a concluded licence. The SEP holder, meanwhile, remains bound to the FRAND framework while seeking judicial determination of rights that may take years to resolve.
Pro tem security is the Court’s response to that asymmetry, but the judgment makes equally clear that the response must remain bounded by law.
The Division Bench ruling in Oppo v. InterDigital requires prima facie judicial scrutiny and prevents security from being imposed mechanically or punitively. The present decision operates within that constraint. Its contribution is to recognise that the required scrutiny must correspond to the relief actually being granted. A measure that preserves security while permitting continued sales need not become a premature trial of every issue that will ultimately determine infringement and FRAND liability.
The Court’s quantification methodology crystallises that distinction. It did not simply order payment of one-fifth of an annual counter-offer. It used Transsion’s annual counter-offer as the commercial reference point, calculated its cumulative value over the period for which InterDigital sought execution of the FRAND agreement, and directed security at one-fifth of that figure.
That sequence matters. It identifies the economic reference point without converting it into a final FRAND determination. The Court secured the litigation without fixing the royalty. It intervened without finally deciding liability. And it imposed an economic consequence for continued implementation without treating InterDigital’s asserted licensing demand as judicially validated.
That may be the judgment’s more durable contribution to Indian SEP jurisprudence. The emerging question is no longer simply whether courts should grant injunctions or permit implementers to remain in the market. Between those two outcomes lies a third judicial function: ensuring that the time required to determine rights does not itself determine the commercial winner.
Pro tem security occupies that space. Its legitimacy depends on maintaining the boundary the Court has sought to draw, enough scrutiny to prevent security from becoming punishment, but not so much that pendency itself becomes the implementer’s most valuable licence.
Expositor(s): Adv. Aparna Shukla
