A bench headed by Justice Pradeep Nandrajog while setting aside the single judge's order restraining Chinese phonemaker Shenzhen OnePlus Technology Co Ltd from selling its mobiles on the plea of Micromax, said that it was not a case for grant of an ad-interim injunction as "prima-facie neither [company] competes nor eats into the territory of the other".
It directed OnePlus and US-based software firm Cyanogen, which in a lighter vein was referred to as a "villain" in the instant case by the bench, to file their replies on Micromax' application for interim stay, saying the parties needed to be given an opportunity to file their pleadings.
The bench observed it was not proper of the single judge to finally decide the application without giving the parties time to file their pleadings.
"In view of the facts noted by us herein above, it would not be a case to grant an ad-interim injunction, for the reason we were informed that mobile devices launched in India by Micromax are sold at around Rs. 8,000 per piece and that by OnePlus at around Rs. 22,000 per piece. The consumer of one product is mid-segment and of the other is high-end and thus prima-facie neither competes nor eats into territory of other."
"We dispose of the appeal setting aside the impugned order dated December 16, 2014, simultaneously restoring with a direction that within two weeks from today reply to application as also the written statement shall be filed not only by OnePlus but even by Cyanogen...," the bench said.
The court also observed in its 18-page judgement that "a proper debate needs to take place at the judicial fora i.e. before the single judge" on all the issues, including features of the software versions available to Micromax and Shenzhen as well as the terms of the agreements of the two companies with Cyanogen.
The single judge of the High Court had restrained OnePlus from selling its devices in India for allegedly infringing the exclusive rights of Micromax with respect to use of Cyanogen software, a specialised form of Android operating system, and trademark.
Cyanogen, which had a global non-exclusive agreement with OnePlus for use of its software and trademark in 16 nations, excluding China, had said in view of its recent contract with Micromax, it can no longer provide upgrades or enhancement to the OnePlus handsets sold in India.
The US company, which had entered into an agreement with Micromax in September 2014 for exclusive use of Cyanogen software and trademark in South Asia, said this arrangement superseded the one with OnePlus.
OnePlus had submitted that since Micromax had "no privity of contract" with it, the Indian company could not have sought an injunction against it.
It had also told the court that its version of the Cyanogen operating system (OS) is different from the one that Micromax has an exclusive licence for use in India.
The Chinese company had said that while its handsets were embedded with the CM11S version of the Cyanogen software, Micromax had a different version, and had added that this point was not submitted before the single judge who had passed the restraining order.
It had also argued that the exclusivity clause in the agreement between Micromax and Cyanogen only means that the US-based firm cannot collaborate with any another mobile maker in India.
OnePlus had suggested that it be given three months time to sell its stock as well as develop another software to substitute Cyanogen, but Micromax did not agree with it.