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Delhi Court Orders Ban On Xiaomi Smartphone Sales
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The Delhi High Court has ordered Xiaomi Technology Co Ltd to temporarily stop selling its smartphones in India in a case related to patent infringements that telecom equipment maker Ericsson had filed against the Chinese company.
Xiaomi, whose low-priced but feature-rich smartphones have made it the biggest smartphone vendor in China, sells its phones exclusively through online retailer Flipkart.com in India, the world's third largest smartphone market.
Both Xiaomi and Flipkart.com have been ordered by the Delhi High Court in an order on Wednesday to stop selling the devices until Feb 5, when it is due to hear the case, according to the court documents.
The court 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.
Xiaomi entered India in July this year and has been a huge hit among customers in a market that has at least 80 different phone makers including Samsung Electronics Co Ltd and a bunch of home-grown companies.
India is an attractive market for cheap smartphones, as more people are now able to afford a smartphone, often for the first time. Just 10 per cent of the India's population currently owns a smartphone, brokerage Nomura said in a recent research note, and that figure is likely to double over the next four years.
Xiaomi in October became the world's third-largest maker of smartphones, just three years after first hitting the market, trailing only Samsung and Apple Inc.
The Delhi High Court asked both Xiaomi and Flipkart.com to provide details of the devices sold so far in India that are compliant with the 3G, EDGE and AMR technologies and the revenue earned from the sale of the devices.
Ericsson has said that it invited Xiaomi to use its patented technology by obtaining a licence, but instead of doing so, the Chinese manufacturer launched its devices in India in July 2014.
Justice G.P. Mittal directed the customs authorities to prevent import of Xiaomi phones.
The court has 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 total fees of the local commissioners, amounting to Rs 3.5 lakh shall be borne by Ericsson apart from travel expenses.
The local commissioners have to submit their report within four weeks.
Ericsson, in a statement, said on Thursday it had to take legal action against Xiaomi in India for using its technology in its smartphone devices without paying it a licensing fee.
"To continue investing in research and enabling the development of new ideas, new standards and new platforms to the industry, we must obtain a fair return on our R&D investments," the Swedish company said.
The chief of Xiaomi's India operations said the company was willing to work with Ericsson to resolve the issue "amicably".
"Our legal team is currently evaluating the situation based on the information we have," said Xiaomi's Manu Jain.