US-based Interdigital, Inc. (IDCC) has been required by a court in the Chinese mainland to compensate Chinese telecom equipment and network solution provider Huawei Technologies Co., Ltd. for monopoly with CNY 20 million.
A court in Guangdong Province, China unveiled final verdict on Huawei's lawsuit against Interdigital on October 28 and according to the verdict, the US firm involved in monopoly and should compensate Huawei with CNY 20 million.
Shenzhen-based Huawei has grown into a leading global telecom equipment and network solution provider, but expands slowly in the US wireless network market. The US International Trade Commission (ITC) said in January this year that it triggered a 337 Section investigation on both 3G and 4G wireless products of firms including Huawei in a bid to make sure whether the products infringed on the patent right of US firms. And in line with industry observers, provided that the result is that the products do infringe on the patent right of US firms, those including Huawei will be banned to sell related products in the US market.
The investigation is initiated by Interdigital and in July 2011, it filed an application to the ITC. In the meantime, it accused Huawei to a court in Delaware, US of infringing on the right of its seven patents. Later, Huawei sued it to a court in Shenzhen, Guangdong for misusing market domination position, applying to the court for requiring it to stop related monopoly activities and compensate CNY 20 million. And according to the application, Interdigital dominates the wireless network-related patent market globally through participating in the making of various kinds of international standards, but license fee of the patents the US firm provides to it is too high. In addition, there are unreasonable conditions. Notably, the firm refuses to make deals with it since July 2011. And all those show that the firm misuses its monopoly position in both the US and the Chinese mainland.
People in the know disclosed that Huawei and Interdigital had launched several rounds of negotiation over patent fee since November 2008 and the US firm put forward finally that the license fee would be two percent of annual sales of the Chinese firm from 2009 to 2016. The profit margin of ordinary industrial products was three percent currently and if Huawei agreed to the fee ratio, it meant that it would earn no money after deduction of the patent fee. Notably, that Interdigital provided to Apple and Samsung Electronics was much lower than two percent.
