Xaomi Barred from Selling Phones in India

News hit today that the Indian courts have barred Xiamoi from selling phones in the country due to a complaint registered by Ericsson that Xiaomi is using Ericcson technology in their phones and not paying a royalty. Xiaomi officials claim they are open to discussion with Ericsson to resolve this as India is an important market for this Chinese smartphone company. 

One of the things that has concerned me about Xiaomi is their phones are basically knock offs of existing smartphones. They get away with this in China because laws there are not strong when it comes to intellectual property. There has been talk of trying to go after them outside of China but this is the first such legal challenge to their crass use of IP without compensating those who created it.

Xiaomi only has 1.5% of the Indian market so far and has sold about 500,000 phones in India last quarter. But Xiaomi believes they can grow this market and is making a significant investment in India to expand their reach and presence. Looking at the actual complaint from Ericsson it is clear that, even though they have been in talks with Ericsson over a couple of years, Xiaomi has chosen to use this technology any way and to not compensate Ericsson. I have been surprised it took Ericsson so long to challenge this in the courts but it appears they have found a friend in the Indian High Courts and Xiaomi is barred until this can be resolved.

This could be the tip of the iceberg when it comes to Xiaomi’s blatant use of IP without compensating the owners of that IP. It could also send shivers through the Shenzen ecosystem and, in a good way, force them to look closer at any IP that has royalties tied to it when making these phones for OEM’s.

It could also embolden other component makers whose parts are in Xiaomi’s phones to take similar action, at first in India but perhaps in other countries Xiaomi is selling in if their technology is used without proper compensation.

Those interested in the global smart watch market need to watch this case closely. Xiaomi taken to task in India could just be the beginning of more legal challenges for them in the near future.

Read Hugo Barra’s message to Mi fans in India about the ban.

Also, for those looking for more depth on India IP law and how it has impacted Micromax in this case and Xiaomi we recommend diving into these two articles.

Delhi High Court grants injunction against Xiaomi
FRAND-ly Injunctions from India: Has Ex Parte Become the “Standard”?

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Tim Bajarin

Tim Bajarin is the President of Creative Strategies, Inc. He is recognized as one of the leading industry consultants, analysts and futurists covering the field of personal computers and consumer technology. Mr. Bajarin has been with Creative Strategies since 1981 and has served as a consultant to most of the leading hardware and software vendors in the industry including IBM, Apple, Xerox, Compaq, Dell, AT&T, Microsoft, Polaroid, Lotus, Epson, Toshiba and numerous others.

6 thoughts on “Xaomi Barred from Selling Phones in India”

  1. There’s a history in Chinese manufacturers building themselves up by helping themselves to others design, then eventually coming up with either licensed or original design. Huawei did this over the last few years. And Lenovo (and Legend before) was far from scrupulous about following the rules at the time it became a sort-of U.S. company.

    1. It’s a natural path that east Asian companies have followed, including Japan. If you look at the old Nikon and Canon designs, they are basically rip offs of Leica and Contax respectively. That was until SLRs disrupted the market after which the Germans were left in the dust. I also picked up an old Citizen watch that was a dead clone of a Rolex.

      Xiaomi will get over this. They just have to hang in there until either they or somebody else comes up with a disruptive idea like SLRs or quartz movement which they can take advantage of.

  2. Hard to choose who’s more at fault: Xiaomi for possibly flaunting laws, or legislators for making such a mess of copyright/trademark laws and their enforcement. Some patents are trademarks are so egregious…

  3. I’m very impressed with India taking that action. BTW, the blurb on the home page has two words joined together. Not a big deal but should be fixed. complaintregistered

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