A US company with a massive wireless patent portfolio has lodged a complaint with the US International Trade Commission (ITC) against Chinese telecom equipment giants Huawei Technologies Co and ZTE Corp alleging unfair trade practices.
The complaint by InterDigital Inc alleges the companies import and sell 3G wireless devices in the US - including mobile phones, USB devices, mobile wireless hotspots, tablets and components - that infringe on several of its patents.
In conjunction with the ITC complaint, InterDigital filed a suit in US District Court in Delaware alleging the same infringements.
The complaints also name Finnish telecom and cellphone company Nokia Corp for alleged infringements unrelated to the Chinese companies.
The ITC filing asks for an exclusion order that would bar entry of the infringing 3G wireless devices and components into the US.
It also seeks a cease and desist order on the sale of such products that have already been imported into the country.
"Over the past 30 years, InterDigital has invested nearly $1 billion in the development of advanced digital cellular technologies, creating important innovations and helping to drive an industry creating billions of wireless connections," said Lawrence Shay, president of InterDigital's patent holding subsidiary, in a statement on the company's website.
"During that period, we have signed dozens of license agreements with manufacturers, giving them access to a patent portfolio of approximately 19,000 issued patents and patent applications - among the largest wireless portfolios in the world," Shay added.
"The vast majority of our agreements have been reached without the need for litigation.
"However, despite having engaged in good faith efforts to license our patents to Huawei and ZTE, we have not been able to reach an acceptable resolution.
"As a result, to protect our intellectual property and the interests of our licensees, we made the decision to bring legal action against these parties."
Huawei and ZTE said they will respond to the complaints positively and make "huge efforts" to protect their interests.
Huawei, China's largest telecom equipment maker, is now studying detailed documents in the legal actions.
"One of the world's leading intellectual property owners, our company has maintained a good record in respecting the intellectual property rights of others," said a representative at the company's headquarters.
ZTE also made an announcement saying the company respects and values intellectual property rights, and "will take effective measures to protect their legal rights".
Experts at the Chinese Academy of International Trade and Economic Cooperation said the US leads the world in innovation and high-tech, so products that are banned from entry would also be difficult to sell in other overseas markets.
Liu Chuntian, director of the intellectual property research center at Renmin University, said the case was not only about profits and business integrity, but also an important experience in dealing with international disputes.
"Though the final result is hard to predict now, I believe the two giant companies have capabilities to develop the patented technologies involved in the case," Liu noted.
(China Daily 08/10/2011 page17)