The Delhi High Court has directed Chinese smartphone manufacturer Shenzhen Transsion Holdings—the corporate power behind the highly popular Itel, Infinix, and Tecno brands—to furnish a pro tem security deposit with the court’s Registrar General.

The mandate stems from multi-jurisdictional patent infringement lawsuits filed by InterDigital Patent Holdings, who accuses the Chinese tech firm of utilizing its technology without proper authorization.

1. The Core of the Dispute: Global SEPs

The litigation centers squarely on Standard Essential Patents (SEPs). These are foundational technological patents that any hardware manufacturer must legally use to build devices compatible with global industry standards.

InterDigital has brought two separate lawsuits asserting infringement across five specific patents:

  • Cellular Communications: Four of the disputed patents cover critical infrastructure required to operate 3G, 4G, and 5G mobile networks.
  • Video Compression: The fifth patent covers HEVC (High Efficiency Video Coding) video compression technology.

According to InterDigital’s filings, Transsion has been deploying these SEPs across its smartphone catalog without securing a proper license since at least April 2016. InterDigital claims it held over 12 technical negotiation meetings and shared more than 100 claim charts with Transsion since 2019 to resolve the issue amicably under Fair, Reasonable, and Non-Discriminatory (FRAND) terms, but Transsion consistently rejected arbitration.

2. Transsion’s Defense vs. Court’s Findings

Transsion strongly opposed the financial security request, arguing that InterDigital had not definitively proven the absolute validity or “essentiality” of the patents on a prima facie basis. Furthermore, the company contended that the court could not establish a fair security valuation without comparable third-party licensing agreements placed on the official record.

Justice Tushar Rao Gedela rejected Transsion’s objections, making several structural clarifications:

Plaintext

[ THE HIGH COURT'S RATIONALE ]

├── Non-Production of Agreements ──► Not a valid bar to block interim security at this preliminary stage.
├── Global Interconnectivity     ──► Cellular tech is too enmeshed to isolate Indian patents in a silo.
└── Balancing the Scales         ──► Security offsets the asymmetric advantage an implementer holds over an innovator.
  • No Siloed Evaluations: The court completely tossed out Transsion’s argument that the security should look strictly at Indian patents in isolation. The judge ruled that 3G, 4G, and 5G systems are too “enmeshed, entrenched, interwoven, intertwined and interdependent” to artificially compartmentalize.
  • Foreign Jurisdiction Precedent: While noting that Chinese patent authorities had invalidated counterparts of some of the asserted patents, the High Court observed that courts in the United Kingdom and Brazil had upheld the validity of corresponding patents.

3. How the Security is Calculated

Because explicit third-party comparable license data was absent from the current records, the Delhi High Court turned to the negotiation history to find a fair baseline.

The court treated Transsion’s own final counter-offer during the corporate licensing negotiations as the fairest benchmark. Transsion has been ordered to deposit one-fifth (20%) of the cumulative value of that last counter-offer (calculated across the license period sought by InterDigital) within eight weeks. Alternatively, the court has permitted the phone maker to submit an unconditional bank guarantee of equal value.

The High Court finalized its order by noting that these pro tem security findings are confined strictly to balancing immediate financial risk and will have no bearing on the pending, broader final injunction proceedings.

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