The launch of Freedom 251, the Rs. 251 (about 4 dollars) mobile phone has set off a storm in India. Consumers eager to get one for themselves have been hounding the website in numbers that the website has now crashed. Ringing Bells, the company that launched the phone, has either not planned, or not expected such a response.
While Ringing Bells tries to clear out the web crash issue, trouble has started brewing from IP quarters. Many IP and patent holders of mobile technologies are now questioning how it is possible to make such a phone without violating Patents and other forms of IP. Here is a quick primer for the benefit of IP beginners.
IP and Patents in Mobile Phones
Various facets of mobile phones are protectable, and have been protected under different forms of IP. Here is an illustrative example of what each form of IP protects, and what is generally protected by mobile companies.
Type of IP – Subject Matter of Protection – Illustrative Examples
Patents – Protect Inventions – Display Technology, Communication Technology, Processing Technology, Software, Mobile Applications, etc.
Trade Marks – Protect Brand of the Phone – iPhone, Galaxy, Motorola, etc.
Copyrights – Protect Expressions – Phone Interfaces, Artistic Icons, Fonts, Catalogues, etc.
Design Patents/Industrial Designs – Protect ornamental designs – shape of phones, patterns, curvatures, configuration of phones, etc.
Thousands of patents, design patents and other forms of IP have been protected with respect to mobile phones. One point to remember is that patents and design patents are territorial in nature. The same is with trademarks unless there is trans-border reputation.
The launch of the Rs 251 smartphone by Ringing Bells Pvt. Ltd. has raised a lot of questions regarding the product and the pricing. The company incorporated in September, 2015 by Amity University graduate Mohit Kumar Goel, has certainly made waves in the Smartphone market. The questions however that needs to be answered primarily is – how is the company able to price the phones at this rate given that a medium pizza costs more than the said phone.
News reports have quoted that the real cost of the device is Rs 2,500, which reportedly will be recovered through a raft of measures like economies of scale, innovative marketing, reduction in duties and creating an ecommerce marketplace.
Consider the fact that a Smartphone has thousands of SEP’s linked to it, the mobile industry body ICA has also raised questions about the pricing of the phone and has been reported to have urged telecom minister Ravi Shankar Prasad to scrutinize the price. The Indian Cellular Association has said that a Smartphone with the features offered by the freedom 251 Smartphone cannot cost below Rs 3,500 even after a subsidized sale.
Many companies concur with the above fact. A news report quotes Suneet Singh Tuli, CEO of DataWind who says – “A 3G device with the specs offered would cost 8 times more. So, we’re interested in learning how they have achieved this, including all the licensing fees,” This is indeed a question that needs to be answered. Companies who made waves in the Smartphone market in 2015 with their dirt cheap priced Smartphones included companies like Micromax, Intex, iBall, Xiaomi, to name a few. However, one commonality that existed between these companies was the fact that all of them were dragged to the courts to face patent infringement suits. The Delhi High Court for instance banned imports and sales of Xiaomi mobile devices in India after the company’s devices sold in the country were found to infringe upon a number of telecommunications-related patents. This is despite the fact that the said companies priced their phones starting at approximately around 6,000 Indian Rupees or more.
India is one of the fastest growing Smartphone markets globally and is poised to overtake the US as the second-largest market in next few years. In the preceding months, global Smartphone makers, including the likes of Xiaomi, Motorola and Gionee have commenced assembling their handsets in India, where the government is pushing local manufacturing through its Make in India initiative. Does the low price of freedom 251 imply some kind vested interests that we are not yet aware of?
Authored by Dr. Kalyan C. Kankanala (Managing Partner, BananaIP Counsels) and Gaurav Mishra.
Contributed with the support of the Patents division of BananaIP Counsels. For any IP queries, please write to us on firstname.lastname@example.org/sinapse.