Most of us are aware that Micromax launched its new series of smartphones under its CyanogenMod based Yu brand recently. But not all of us are aware that Micromax fought a tough battle to be the exclusive users of this version (CyanogenMod) of Android for its latest phones in India. After Xiaomi, it is now Oneplus who has been asked to suspend sale of its “Oneplus One” smartphones in India. A recent order passed by the High Court of Delhi in favour of Micromax has left OnePlus counting the sale of its last few products in India.

So what is all the confusion all about? Given that CynogenMod is a pretty cool version of Android and the makers want that every phone should run on it, it however won’t help if Cyanogen grants exclusive licensing rights. The interesting facts of the case are as follows;

Agreement between Cyanogen and OnePlus:
  • A Collaboration Agreement and a Trademark Licensing Agreement was entered into between Cyanogen and OnePlus in February, 2014 which is valid until January 31, 2016 wherein OnePlus was granted a limited non-exclusive license to use Cyanogen’s trademarks and software (OS labelled CM 11S) in the entire world except for Mainland China.

Limited non-exclusive license – While a non-exclusive license grants the licensee the right to use the Intellectual Property Rights, the licensee however cannot restrain the licensor from further exploiting the same IP. So the licensor can grant a third party exclusive license in the future, which is what Cyanogen did in this case.

Agreement between Micromax and Cyanogen:
  • Micromax and Cyanogen entered into an agreement whereby Micromax was afforded a license to use CynogenMod OS, among other things, for its latest set of smartphones called “Yu Yureka”; this agreement was to come into effect only from September 26, 2014;
  • The agreement basically grants Micromax the license to integrate and distribute Cyanogen’s core operating systems, as well as its ambient services and applications and is valid until January 31, 2016. It gave Micromax exclusive license for India, Bangladesh, Sri Lanka, Nepal, Pakistan and Myanmar regions and Cyanogen undertook to not collaborate directly with other OEM (Original Equipment Manufacturer).

Exclusive license – As the term suggests, exclusive license is when the licensor cannot further exploit the IP for the term of licence. In this case, Cyanogen cannot grant rights to a third party till the term or early termination of the current agreement.

August, 2014 – The Knowledge:

Micromax came to know that OnePlus was intending to enter the Indian market using Cyanogen’s operating system software for which Micromax had exclusive rights. They requested Cyanogen to take preventive measures and Cyanogen assured them that they would be granted the exclusive rights in India from the effective date of the agreement and that the agreement between them and OnePlus was subject to rights created by Cyanogen in favour of a third party. It is also to be noted that any dispute arising between these two parties would be settled by the Courts of Northern District of California.

November 16th-17th, 2014 – The Emails:

During this period of time, tons of emails were exchanged between Micromax, Cyanogen and OnePlus. Cyanogen agreed to provide Over the Air support to OnePlus mobile users for the month of December. However, on the very same day Cyanogen declared its intention of terminating the contract between them and Oneplus. It is interesting to note that Oneplus agreed to the following; “We have removed mentions of Cyanogen in PR, marketing, and upcoming product pages already.” Interestingly, OnePlus wanted to get into some sort of agreement with Micromax about the use of Cyanogen but on the very same day Micromax replied to their offer by sending a Cease and Desist notice to them.

On November 27, 2014, Cyanogen Inc. finally then announced exclusive mobile partnership in India with Micromax.

December 1, 2014 – The Defensive Suit:

Interestingly, Oneplus anticipated a suit coming its way and in turn filed a suit against Micromax and Cyanogen before the launch of its products requesting that they should not be allowed to institute a suit against them as it has spent a “tremendous amount of resources” for this launch and would suffer “hardship if defendants are not restrained”.

December 2, 2014 – The Big Launch:

OnePlus launched OnePlus One smartphones under CyanogenMod 11 in India through amazon.com despite having agreed to not do so.

December 16, 2014 – The Judgment Day:

Naturally, Micromax filed a suit for injunction against OnePlus; the judgment of which was passed by Justice Singh and the facts of the case as can be seen above are really interesting with many twists and turns (mostly by Cyanogen). The Court granted the interim injunction restraining OnePlus from marketing, selling and shipping its OnePlus mobiles in India, which amounts to the infringement of the exclusive licensing agreement entered into by Micromax and Cyanogen.

The End:

–       OnePlus had a limited non-exclusive agreement with Cyanogen for the whole world except China, so they could have launched and sold their products before September 26, 2014, the date on which the agreement conferring exclusive rights to Micromax was to come into effect if they were so keen on entering the Indian market;

–       There was no point in OnePlus filing a suit against Micromax and Cyanogen as it is clearly not maintainable as per the agreement between them and Cyanogen;

–      Cyanogen took many “U-turns” as rightly mentioned in the judgment which left the whole world confused. From agreeing to give Over the Air support for the month of December to OnePlus mobile users in India to then terminating the contract between them and OnePlus on the same day.

The Court ultimately prohibited OnePlus from further sale of OnePlus One phones in India; however, they were given the chance to clear the stock that is already out in the market.

By the end of it, it just seems like Cyanogen wanted the best of both worlds. In the sense, it seemed like they wanted both Micromax and Oneplus to run the Cyanogen OS on their phones. Maybe then entering into an exclusive licensing agreement wasn’t the best idea for them. But if there is no exclusivity, then no one would want to enter into an agreement to sell! Phew. What a world we live in!

This article has been authored by Durga Bhatt, an IP Law practitioner.