December 18, 2014 by ...
This is part 1 of a multi-post explanation of Xiaomi’s problems in India.
Xiaomi was banned from selling and marketing all of their handsets in India. The reason for this action stems from legal wrangling. Since then, they have been granted a reprieve of sorts. This post will clarify the Xiaomi mess.
Xiaomi’s ban, an injunction, but what is that?
The Indian high court accepted Ericsson’s argument that Xiaomi had been using their tech without paying. This is illegal and Ericsson asked for help. That help came in the form of an injunction. An injunction is a legal order which prohibits or permits an action before a formal legal decision can be made.
In this case, Ericsson sued Xiaomi for infringement. Lawsuits take time, however, and until a settlement was reached, Xiaomi could continue to sell and presumably profit illegally. The court issued an injunction in order to prevent this from happening.
But what does an injunction do?
Like I said, an injunction is a court order directed at a specific action. It is used to prevent further wrong doing or harm until a formal court settlement is reached. The problem is that an injunction is a strong legal remedy. India, like the US, believes that an entity is innocent until proven guilty. An injunction runs contrary to this notion. When a court issues an injunction it is essentially saying, ‘This matter is so grave or harm irreparable that we will make a temporary decision of guilt or innocence until the trial ends.’
For example, a town may sue a firm that is polluting their land. The trial could take months or years. The townspeople would ask for an injunction that the firm stop polluting immediately and continue to do so. The town says the company is guilty and the plant claims innocence. The law agrees with the accused, until proven otherwise. Courts may step in and use an injunction to prevent harm from occuring. For example, even though the firm may not be doing anything illegal, the courts cannot be sure. The risk of harm is greater than the rights of the company and thus an injunction will be issued.
This is what happened to Xiaomi. The courts decided that allowing Xiaomi to continue to sell would cause harm and thus prevented them from doing so. But all that has changed…
Read part 2 to see why…