Cyanogen licensed its OS to OnePlus non-exclusively, then gave Micromax an exclusive India licence for the same OS. OnePlus launched in India anyway — and was injuncted. The difference between “exclusive” and “non-exclusive” is the whole story.
The two licences
- Cyanogen → OnePlus (Feb 2014): a limited non-exclusive licence to use Cyanogen’s trademarks and software (CM 11S) worldwide except Mainland China, valid to Jan 2016.
- Non-exclusive means the licensee can use the IP but cannot stop the licensor from licensing others — including granting later exclusives.
- Cyanogen → Micromax (effective 26 Sep 2014): an exclusive licence for India, Bangladesh, Sri Lanka, Nepal, Pakistan and Myanmar, with Cyanogen undertaking not to collaborate with other OEMs there.
- Exclusive means the licensor cannot further exploit the IP in that territory during the term.
What happened
- Aug 2014: Micromax learns OnePlus plans to enter India; Cyanogen assures Micromax of exclusivity from 26 Sep 2014.
- Nov 2014: Cyanogen agrees to give OnePlus December OTA support, then announces termination of the OnePlus contract; OnePlus agrees to remove Cyanogen branding; Micromax sends a cease-and-desist.
- 1 Dec 2014: OnePlus files a defensive suit.
- 2 Dec 2014: OnePlus launches the OnePlus One in India via Amazon anyway.
- 16 Dec 2014: Justice Singh grants an interim injunction restraining OnePlus from marketing, selling and shipping in India — finding a breach of Micromax’s exclusive licence (existing inventory could be cleared).
The lessons
- Exclusive vs non-exclusive is decisive. A non-exclusive licensee has no right to block a later exclusive licensee — OnePlus’s non-exclusive rights could not defeat Micromax’s exclusive ones.
- Timing matters. OnePlus could have launched before 26 Sep 2014; launching after Micromax’s exclusivity began was the problem.
- A licensor playing both sides creates chaos. Cyanogen’s reversals — wanting both OEMs to use its OS — undercut its own exclusive arrangement and invited litigation.
- Draft territory and exclusivity precisely — and honour them.
Frequently asked questions
What is the difference between an exclusive and non-exclusive licence? An exclusive licence bars even the licensor from exploiting the IP in the territory; a non-exclusive licence lets the owner license others too and does not let the licensee block them.
Why was OnePlus injuncted? Because it launched in India after Micromax’s exclusive licence began, breaching that exclusivity — its own non-exclusive rights could not override it.
Can a non-exclusive licensee stop a later exclusive licensee? No. A non-exclusive licensee cannot prevent the owner granting a later exclusive licence to another.
What should licensors avoid? Granting overlapping/conflicting rights — an exclusive grant must be honoured, not undercut by side deals.
Legislation referred to
- The Trade Marks Act, 1999
- The Copyright Act, 1957