Huawei Technologies Co. Ltd. Photo: Brücke Osteuropa via Wikimedia Commons

China's Huawei Technologies Co. Ltd. and U.S.-based telecommunications research and development company InterDigital Inc. are embroiled in another patent licensing dispute after reaching an agreement in a similar dust-up two years ago.

InterDigital's chief legal officer, general counsel and corporate secretary, Jannie Lau, reported to the U.S. Securities and Exchange Commission on Jan. 7 that Huawei had sued InterDigital and several of its subsidiaries in the Shenzhen Intermediate People's Court in China five days prior.

The suit alleges InterDigital, which is headquartered in Wilmington, Delaware, violated an agreement to license patents that are essential to 3G, 4G and 5G wireless telecommunication standards on fair, reasonable and nondiscriminatory terms and conditions.

“The complaint also seeks a determination of the terms for licensing all of the InterDigital defendants' Chinese patents that are essential to 3G, 4G and 5G wireless telecommunication standards to the Huawei plaintiffs for the plaintiffs' wireless terminal unit products made and/or sold in China from 2019 to 2023,” Lau wrote.

Huawei filed the suit shortly after its 2016 patent license agreement with InterDigital expired Dec. 31. An attempt to speak with a Huawei spokesman was unsuccessful.

InterDigital's president and CEO, Bill Merritt, said in an interview Tuesday that these types of disputes over royalty rate settings have “become a little more commonplace over the last couple of years.” He also noted that Huawei has litigated from both sides of the issue as a patent licensor and licensee.

“One of the issues we see is with these [cases] popping up in courts around the world and with the nature of the different rules in those courts and how they proceed you can end up with differing results,” Merritt said.

He wants InterDigital's latest dispute with Huawei to be settled out of court through arbitration, which he asserts leads to greater uniformity and clarity in setting royalty rate standards.

“Part of it is that people can gain an advantage by bringing lawsuits in their hometown and causing delay,” he added. “We want to advocate for arbitration because it will prevent races to the courthouse and angling for the benefit of delay.”

Merritt also expressed concern about the differences in how courts in various jurisdictions handle sensitive information that gets exchanged during a dispute, including trade secrets and agreements with other companies.  

“Whether it's China or Germany or the U.S, they vary on how confidential information is handled,” he said.

The last time InterDigital and Huawei argued over patent licensing, the two sides reached an agreement through arbitration that began in 2013. The proceedings, which were held in France, according to Merritt, led to the aforementioned multiyear patent licensing agreement in 2016.

Huawei's latest suit against InterDigital comes with the backdrop of heightened U.S.-China trade tensions, and was filed after Hauwei's chief financial officer, Meng Wanzhou, the daughter of Huawei's founder, was arrested Dec. 1 in Canada at the request of U.S. authorities. She is accused of helping a Huawei subsidiary avoid U.S. sanctions on Iran.

Asked if he believed that the U.S.-China conflict played a part in Huawei's decision to sue InterDigital, Merritt said: “It's hard for us to say if it is or isn't.”

 

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