Delhi HC directs Lava to pay ₹20.03 crore in Dolby patents dispute
Delhi High Court
(HC) has directed homegrown handset maker
Lava International
Limited to pay $2.3 million (or about ₹20.03 crore) to audio technology firm
Dolby
for infringing upon the latter's
standard essential patents
(SEPs) from its advanced audio coding (AAC) portfolio.
The
Delhi HC
observed that Dolby offered
Lava
a pool-licensing agreement through Via LA, in addition to its bilateral rates compatible with Fair, Reasonable, and Non-Discriminatory (FRAND) commitment.
It said that Lava did not enter into the required license or was unable to reach a good-faith agreement with Dolby, and continued selling devices that the court found to be infringing, without paying royalties. Further, the handset brand obtained a pricing difference with compliant licensees of Dolby, which are market competitors of Lava.
'Accordingly, Lava has not only acted as an unwilling licensee but has also derived an unfair advantage in the market by selling infringing devices without paying the requisite royalties. The conduct of Lava in making its first counter-offer only after the initiation of the present suit clearly reflects an attempt to delay proceedings and is not reflective of good faith behaviour in FRAND licensing negotiations,' Justice Amit Bansal in his judgment pronounced on July 10, 2025, said
ETTelecom
has reviewed a copy of the judgment.
On May 1, 2024, the Court had directed Lava to furnish details of devices sold by the company, which were the subject matter of the suit, along with the sales reports and revenues earned from the sale of such devices.
On May 22, 2024, the Court recorded that the negotiations between the parties failed and listed the matter for adjudication. Lava had also volunteered to deposit ₹5.13 per device sold, a proposal that Dolby outrightly rejected for being 'wholly inadequate' and having 'no sound economic basis', with the latter alleging that the proposal did not cover sales of Lava's infringing feature phones.
'Despite being in discussions with Dolby for over five years, Lava failed to propose any quantifiable licensing terms or provide its sales data until the present suit was instituted. Such conduct undermines the very spirit of good faith negotiations that is central to the FRAND framework,' the Court said.
'...the total royalty that would be payable by a willing licensee to Dolby would have amounted to $2,340,456.98, which, based on the prevailing exchange rate as on date, would be equivalent to ₹20,08,06,293.9214,' the court said, directing Lava to deposit the sum, covering all past sales from the year 2019 till 2024 with the Delhi HC's Registrar General within eight weeks from the date of judgment.
A failure to deposit the amount of the bank guarantee, as per the terms, would entitle Dolby to move an application before the Court for seeking an interim injunction/restraint order against Lava from selling any further devices in India that implement the suit patents.
Dolby had sued Lava in May last year, alleging that the smartphone brand had infringed upon eight patents covering its AAC SEPs. The US-headquartered company licenses its patents bilaterally as well as through patent pool operator Via LA Licensing.
However, Lava argued that out of eight patents, five had expired prior to the institution of the lawsuit between the two companies.
Dolby claimed that it has more than 940 licenses for its advanced audio coding portfolio with multiple entities.
Dolby and Lava had been attempting to conclude licensing discussions for the last six years, but failed to reach an agreement.
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