The Delhi High Court in an interim order has restrained Xiaomi as well as e-commerce firm Flipkart from selling in India handsets of the Chinese mobile maker that run on the technology patented by Ericsson.
The court has 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.
The two firms have been order to stop selling infringing devices until February 5, when the court is due to hear the case. 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 and a bunch of domestic firms.
Justice G P Mittal directed the customs authorities to prevent import of Xiaomi phones that are infringing the patents of Ericsson and if any consignment is imported, the same be informed to Ericsson and its objections be decided as per the Intellectual Property Rules.
"I am satisfied that plaintiff (Ericsson) has made out a prima facie case for grant of ad interim injunction in its favour. The balance of convenience also lies in favour of plaintiff and in the absence of an injunction order, plaintiff will suffer irreparable loss and injury," the court said.
It also issued summons and notice to Xiaomi and Flipkart and directed them to file an affidavit disclosing the number of devices - that are AMR, EDGE and 3G compliant - sold by them in India till date.
They have to also indicate in the affidavit the revenue earned by selling these devices till date.
The court has also 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 lakhs shall be borne by Ericsson apart from travel and stay expenses, it said.
The local commissioners have to submit their report within four weeks, it also said.
The order was passed on the plea of Ericsson that Xiaomi has been violatingeight of its patents pertaining to AMR, EDGE and 3G technologies in the field of telecommunication.
Ericsson has said that it had 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.
Ericsson in a statement on Thursday said 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 had yet to receive an official notice from the Delhi High Court and that it 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. He did not give details about the case.
Flipkart also said it was yet to receive an official notice and would work with Xiaomi and the authorities.
Written with agency inputs.