The 10 July 2025 decision given by the Delhi High Court in Dolby International AB & Anr v. Lava International Ltd by Justice Amit Bansal is a major step in the emerging jurisprudence in India concerning standard-essential patents (SEPs) and FRAND (Fair, Reasonable and Non-Discriminatory) duty. The matter was with Dolby Advanced Audio Coding (AAC) patent portfolio and Lava’s refusal to withdraw its course to market AAC-compliant products without having acquired a FRAND-based licence.
The academic significance of the decision presented is not limited to the relief sought as interim relief, but also extends to the method adopted. Rather than issuing an injunction that could have interfered with Lava’s functioning and broader market dynamics, Justice Bansal directed a substantial amount of a pro-tem security deposit. This restriction was meant to safeguard the rights of Dolby as an intellectual property holder with regard to allowing consumers to continue using products of Lava. This is how judgment implies the recognition of different negotiatory ways of SEP controversies, regardless of technical merits, by the Court.
From Claim Charts to Courtrooms: The Path to the Delhi High Court
Embedded in nearly every smartphone and streaming device, Dolby’s AAC audio compression technology builds on decades of innovation and a robust portfolio of patents in terrestrial and file-based audio compression, culminating in a dispute that traveled from claim charts to the Delhi High Court. On 31 December 2018, Dolby wrote to Lava and showed it a comprehensive claim chart of its AAC patents and made a bilateral FRAND licensing offer. In later years, Dolby made repeated clarifications, engaged in discussions, and attempted to secure a license deal.
Despite this, no substantive offer of counter-proposal was made by Lava until Dolby commenced legal action in April 2024. Three of the eight patents in the claim were still active, and the other five had expired at the time. In the case of Dolby, it argued that the claimed patents were representative of its larger AAC collection of SEPs and provided documentation, such as web-based information that it obtained from a Lava website, to ensure that the devices in dispute had compatibility with AAC standards.
Justice Bansal pointed out three main issues that needed adjudication. The former relates to Dolby having proved that its patents were essential to the AAC standard, valid, and infringed by products of Lava. The second was the issue as to whether Lava’s behavior during negotiations made it an unwilling licensee as per FRAND terms and was thus deserving of an interim remedy. Lastly, the royalties needed to be calculated at a fair range and total value of the temporary security deposit, along with royalties that should be charged during the periods where some patents had expired.
Essentiality Established Through Claim Charts and Global Licensing Evidence
The Court used the two-step mapping approach established in the previous Crawford v. in Indian SEP cases, which is best exemplified in Intex v. Ericsson. Two-step mapping means first linking the patent claims to clauses in the relevant technical standard to prove essentiality, and then linking that standard to the accused product to show it necessarily uses the patented technology. The initial step is to identify the patents with the related standard and do a mapping of the accused products with the standard. Dolby included many pages of a claim chart, the technical results of substantial testing, and evidence of over 940 licenses processed in various jurisdictions throughout the world.
Lava did not contest the assertion of AAC compliance in its products and did not present any claim of a different implementation. The Court held that there must not be a detailed inquiry into validity on the interim stage, with the mapping evidence remaining unopposed. The Court thus found that Dolby had proven a solid prima facie of essentiality, validity, and infringement. This ruling constitutes a pragmatic acknowledgement of the fact that in so many SEP disputes, simply complying with standards would also signify adopting the patented approach, without the ability to prove some other technical route. Lava did not offer any contrary evidence, and without arguments to contradict Dolby, the company lost the case.
Analysis of eagerness to focus on a licence arrangement forms the second major arm of the study, with references to FRAND. In this respect, the Court is referring to the precedent of the Court itself in the case of Huawei v. ZTE, and following the domestic authorities fabricating the determinative role of a willing licensor. In particular, the court decision in Nokia v. Oppo is referred to, in which the Indian Supreme Court observed that the following is one of the key questions under FRAND.
In the case of Lava, the Court questions Lava on its long-term unwillingness to engage in serious negotiations. Lava has shown in its record several delays of substantial engagement, distraction with technical clarifications previously cleared up, demands to sign confidential deals of third-party licences with no functional protection or even any proper counter-offers before the litigation finally began. In the Court, this behaviour is described as typical of a so-called patent holdout that is used to qualify a behaviour whereby an implementer is unwilling to negotiate the agreement even though it benefits from the patented technology. By looking into this, the Court establishes that the conduct of a prospective licensee is more than a boilerplate process; it is a substantive factor that squarely touches on the dynamics of equities in cases of interim relief.
Pro-Tem Security Deposit as a Middle Path in SEP Enforcement
The last case involved interim relief. The Court recognised that the process of obtaining SEP trials in India can be lengthy and that without interim protection, an SEP owning patentee runs the risk of having the outcome of the trial issued in the form of a mere paper decree, which, due to lack of enforcement, could get reduced to what is known as a paper decree. Concurrently, an injunction in full at this level would be unfair to the access of consumers in general and also to the business of the implementer.
Being torn between the two, Justice Bansal settled at a pro-tem security deposit, which was essentially a financial guarantee that would not cease sales, but would protect the potential right of the patentee. The Court also denied Lava the opportunity to enjoy time of expiration of some patents amid the delay of negotiations. As the first offer of the Dolby licence in 2018 was intended to cover the entire portfolio, the royalties during the period when it was still possible to utilize the entire portfolio of patents could also be taken into account.
The amount charged by Lava, which amounts to ₹5.13 per device, was considered arbitrary and unjustified. Rather, the confidential sales figures of Lava were provided under seal, and the bilateral licence rates of Dolby were used. This has given an amount of $2,340,456.98 (approximately 20,08,06,293.92 in Indian rupees) in terms of sales in the period, 2019 to 2024. This sum was to be deposited with Lava, or a bank guarantee had to be given within eight weeks, and fresh half-yearly deposits had to be made to cover future sales. Defalcation would give Dolby the right to an interim injunction. Notably, the Court stated that this order was non-final on the questions of infringement and FRAND rates.
Proportionality as the Core Strength of the Dolby–Lava Judgment
The decision protects the position of the potential gain to the patentee but suppresses the danger of its disturbing the marketplace. With the Court authoritatively resolving the issues of conflicting conduct documented upon negotiations with acceptable international standards on FRAND, the Court has harmonized Indian practice with the accepted global best practices. Dolby had technically prepared a convincing prima facie case, with its preset technical mapping, claim graphs, and substantial evidence concerning large global licensing. This case indicates that SEP owners may strengthen their case by providing understandable, extensive evidence early in the process of the dispute. In addition, the deterrence against patent holdout is mentioned in the conviction as well. The implementing authorities who postpone or otherwise fail to engage in good-faith activities may be deemed to be unwilling licensees who warrant significant interim relief grounds against them.
Guidance for Implementers – Engage Early and in Good Faith
To implementers, the ruling serves as a strong warning to be substantially active and act immediately once a request for a FRAND licence is received, to base counter-proposals on factual findings, and to offer credible non-infringing suggestions.
- Latency or the filing of token responses threatens to incur a decision of reluctance and large financial exposure.
- For SEP holders, the case underscores the importance of rigorous documentation, including claim charts, clear mapping to the standard, product testing, and evidence of consistent international licensing activity, all of which combine to reinforce the interim claim.
- For courts and policymakers, the case illustrates the need to improve procedures for handling confidential licence data to achieve uniformity in valuation approaches to interim royalties and to clarify evidentiary standards that would demonstrate unwillingness.
- Dolby v. Lava demonstrates that in resolving SEP disputes, courts must consider not only technical claims but also the conduct of parties during licence agreement negotiations.
- Dolby made well-documented attempts to engage, whereas Lava engaged in prolonged delays and non-commitment, leading the Delhi High Court to pass an interim order in Dolby’s favour of significant magnitude, safeguarding its rights without excessively crippling Lava’s business.
In striking this balance, the Court preferred a pro-tem security deposit over an immediate injunction, thereby supporting an enforceable FRAND remedy that deters bad-faith behaviour while ensuring market stability. The decision establishes a key precedent for future Indian SEP cases, informing how litigants will formulate evidence, negotiate, and devise legal strategies in high-stakes technology litigation.
Authored by: Ms. Mitna Gupta
Ms. Mitna Gupta is a second year B.COM LLB student at the Institute of Law, Nirma University. Her areas of intrest include Intellectual Propert law, Data Privacy law and Company law. She has gained practical experience through varius internships, which has helped her strengthen her understanding of the legal field.
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