The Lift Line

“We are building our future on infrastructure we don’t own, using technologies we don’t always wish to acknowledge.”

Why This Editorial Matters for Your Exam

Intellectual property is a GS3 syllabus item that aspirants often reduce to Section 3(d) and compulsory licensing. This op-ed opens the less familiar but growing field of Standard Essential Patents (SEPs), where patent law, competition law and India’s digital ambitions meet. It gives an aspirant the key cases, the FRAND concept and a strong economic frame (static versus dynamic efficiency).

GS Paper 3: Issues relating to intellectual property rights; science and technology, indigenisation of technology and developing new technology; awareness in IT and computers. GS Paper 2 (link): Statutory and regulatory bodies (Competition Commission of India).

Concept Meaning Why it is testable
Technical standard A common specification (4G, 5G, Wi-Fi, a video codec) that makes devices interoperable Set by standards bodies such as ETSI, IEEE and ITU
Standard Essential Patent (SEP) A patent that must be used to comply with a standard Every compliant device infringes it without a licence
FRAND Fair, reasonable and non-discriminatory licensing terms The commitment SEP holders give standards bodies
Hold-up / hold-out Hold-up: a patent holder demands excessive royalties; hold-out: an implementer delays paying The two risks FRAND law balances
Static vs dynamic efficiency Cheap access now vs incentives to invent later The core trade-off in IP policy

Background and Context

The jurisdiction question in India:

Year Development
2013 onwards Phone makers complained to the Competition Commission of India (CCI) about Ericsson’s SEP licensing; the CCI ordered investigations
2018 Philips v. Rajesh Bansal, Delhi High Court: India’s first post-trial SEP judgment (DVD technology)
July 2023 A Delhi High Court Division Bench held that the Patents Act, 1970 is a complete code on patent licensing abuse and prevails over the Competition Act, 2002 (Ericsson v. CCI, heard with Monsanto v. CCI)
September 2025 As background to the op-ed, the Supreme Court declined to interfere, noting that the original informants had settled with the patent holders, and kept the questions of law open
May 2026 A Delhi High Court Division Bench vacated the Philips decree, setting what the authors call a “strict evidentiary template”

The op-ed refers to the Supreme Court’s decision as “recent”; it dates from September 2025.

Global cases the authors cite:

  • Huawei v. ZTE (2015), Court of Justice of the European Union: set out steps (notice, a written FRAND offer, a diligent response) that an SEP holder must follow before seeking an injunction without abusing a dominant position.
  • Unwired Planet v. Huawei (2020), UK Supreme Court: allowed courts to set the terms of a global FRAND licence and to grant an injunction if the implementer refuses it.

The Indian law in brief. The Patents Act, 1970 provides for compulsory licences (Section 84) and voids certain restrictive licence conditions (Section 140). The Competition Act, 2002 allows reasonable conditions to protect IP rights in agreements (Section 3(5)), but its abuse-of-dominance provision (Section 4) has no such exception, which is why the jurisdiction question arose.

The Analysis

1. The gap. India has about 70 per cent internet penetration and more than 600 million smart-device users, and the digital economy is expected to be about a fifth of GDP. Yet, the authors argue, India’s footprint in owning critical SEPs is “razor thin”. The Indian Patent Office granted about 1,00,000 patents in FY24, but India’s contribution to global technologies is below 0.1 per cent, and R&D spending remains below 1 per cent of GDP.

2. The myth they reject. The authors dispute that strong IP rights block access. India’s welfare architecture (Jan Dhan, Aadhaar-enabled DBT, UPI, e-NAM, MGNREGA digitisation) rests on interoperable standards, which exist only because innovators contribute their technology to standards bodies. Enforceable patents solve the disclosure problem: without them, firms keep their technology to themselves.

3. The trade-off. Cheap access now (static efficiency) competes with the incentive to invent the next generation (dynamic efficiency). If returns to inventors are too weak, contributions to standards fall and the R&D cycle can break, and the connectivity that poorer users rely on may eventually stall.

4. The court’s turn. The authors praise Philips (2018) as a pragmatic, economically grounded judgment that signalled India’s arrival in SEP litigation. They criticise the May 2026 Division Bench ruling for putting procedural and evidentiary formalism above commercial reality, making the FRAND undertaking a source of costly, uncertain litigation and, in their words, subsidising “a culture of patent trespass”.

5. The ambition. India must stop being a passive buyer of foreign standards and shape its own, which requires research funding as much as legal certainty.

The precision that earns marks. An SEP is not a monopoly over a product; it is a patent on a technology that a standard requires. The FRAND promise is made to the standards body, and courts treat it as binding on both sides: the patent holder must offer fair terms, and the implementer must negotiate in good faith.

Data and Institutions Vault

Prelims-grade facts:

Law and cases:

  • The Delhi High Court (Division Bench, July 2023) held that the Patents Act, 1970 prevails over the Competition Act, 2002 on patent licensing abuse.
  • As background, the Supreme Court declined to interfere in September 2025, as the informants had settled; law kept open.
  • Philips v. Rajesh Bansal (2018), Delhi High Court, was India’s first post-trial SEP judgment.
  • Huawei v. ZTE (2015) was decided by the Court of Justice of the European Union.
  • Unwired Planet v. Huawei (2020) was decided by the UK Supreme Court; it allowed global FRAND licence terms.
  • Section 84 of the Patents Act provides for compulsory licences.

Standards and data:

  • FRAND means fair, reasonable and non-discriminatory licensing terms.
  • Major standards bodies: ETSI (Europe, telecom), IEEE (Wi-Fi), ITU (UN agency for ICT).
  • India’s telecom standards body is TSDSI; its 5Gi proposal to the ITU was merged into the global 3GPP standard in 2022.
  • The Indian Patent Office granted about 1,00,000 patents in FY24 (per the authors).

Prelims, the traps:

  • FRAND is a licensing commitment, not a price cap fixed by a regulator.
  • Section 3(5) of the Competition Act protects IP conditions in agreements (Section 3) only, not dominance cases (Section 4).
  • The Supreme Court’s 2025 order rested on the informants’ settlement, not the merits; the point of law is unsettled.

⚠️ Watch the trap: The Court of Justice of the European Union (Luxembourg) is an EU body; it is different from the European Court of Human Rights (Strasbourg), which belongs to the Council of Europe.

The Debate

For stronger enforcement. Predictable FRAND enforcement draws innovators into standards, including Indian ones, and makes India a credible forum for global licensing disputes. Weak enforcement rewards infringement and discourages disclosure.

For stronger checks. India is a net importer of technology; aggressive royalties raise costs for Indian handset makers and consumers. Letting the CCI police abuse of dominance, and using compulsory licensing where needed, protects access, which is also a public interest.

The balanced verdict. Patent law and competition law are complements. India needs predictable rules for both sides of the negotiation (against hold-up and against hold-out), but its lasting leverage will come from contributing its own technology to standards, which depends on research investment.

How to Think About This

Separate the reward from the rules of the game. Every IP debate asks two questions: how large should the reward for invention be, and who decides when it is abused? Mapping a question onto these two axes (reward size; forum of control, whether court, patent office or competition regulator) works for SEPs, pharmaceutical patents and software alike. For India, add a third: are we a maker or a taker of the technology in question?

Diagram-in-Words

Innovator’s patent contributed to a standard FRAND promise fair, reasonable, non-discriminatory Implementer’s access phones, networks, UPI rails Courts enforce the bargain or the CCI polices abuse Too weak less disclosure (hold-out) Too strong costly access (hold-up) India writes its own SEPs
The FRAND bargain works only if enforcement avoids both extremes; India’s durable leverage lies in owning part of the standard rather than only negotiating its price.

Takeaway Box

  • SEP: a patent essential to implement a technical standard; licensed on FRAND terms.
  • Indian law: Delhi HC (2023): Patents Act prevails over the Competition Act on licensing abuse; SC declined to interfere (September 2025) as the informants had settled; questions of law open.
  • Cases: Philips v. Rajesh Bansal (2018); Huawei v. ZTE (CJEU, 2015); Unwired Planet v. Huawei (UK SC, 2020).
  • The gap: about 1,00,000 patents granted in FY24, but a tiny share of global technology and R&D below 1 per cent of GDP.
  • Way forward: predictable FRAND enforcement plus research investment, so India moves from standard-taker to standard-setter.

Sources: Hindustan Times, SpicyIP

Source: From Standard-Taker to Standard-Setter: Standard Essential Patents and India's Innovation Gap — Ujiyari.com | Free UPSC & State PCS Editorial Analysis