Jack Ellis

Huawei has accelerated its patent assertion campaign on two fronts over the past week, launching a new complaint against T-Mobile in the United States and a further suit against Samsung in China.

As reported by the Puget Sound Business Journal, Huawei filed a complaint on Tuesday in the Eastern District of Texas against T-Mobile USA, a local subsidiary of Deutsche Telekom. This is the latest salvo in a patent dispute that dates back to June 2014, when the Chinese company claims it first reached out to the US network operator to discuss a licence agreement for several of its standard-essential patents (SEPs) relating to 4G.

With no response forthcoming, according to Huawei, in January this year it filed four lawsuits against T-Mobile in the Eastern District of Texas, alleging infringement of 14 patents in total (Nokia Solutions & Networks recently intervened in these cases as a counterclaimant on the basis that it supplies T-Mobile with at least some of the equipment alleged to infringe Huawei’s patents). According to this week’s filing, these actions apparently prompted a reply from T-Mobile, which nevertheless refused Huawei’s offers as falling short on fair, reasonable and non-discriminatory (FRAND) principles.

It is noteworthy that Huawei’s filing with the Eastern Texas court this week is an “original complaint for declaratory judgment of compliance with standard-essential patent FRAND obligations”, and not a claim for patent infringement (several of which, as is explained above, had already been launched back in January). In other words, Huawei is not seeking damages with this latest suit. Rather, it is aiming to get a DJ as a means to put pressure on T-Mobile to accept its existing licensing offer as conforming to FRAND principles.

Presumably, should T-Mobile be put in a position to negotiate and sign up to a licence with Huawei, then the pending infringement litigation would be dropped. The fact that Huawei has gone down this route also suggests that it is confident that it has put a FRAND offer on the table, since this case, if it progresses, would probably see the financial details of the licence offer made public.

In a separate development that emerged this week, Huawei has filed another patent infringement complaint against Samsung in China, this time in the city of Quanzhou in Fujian province (original report here, in Chinese). This follows earlier litigation launched against the Korean company in California and Shenzhen back in May.

In this latest suit filed with the Quanzhou Intermediate People’s Court, Huawei alleges that 16 products made by several of Samsung Electronics’ local subsidiaries infringe on one of its patents relating to certain technical solutions on terminal displays. The accused products are said to infringe on eight of the patent’s 16 claims, with the Chinese company asking the court for Rmb80 million ($12 million) in damages.

Interestingly, it would appear that this particular court has jurisdiction over the case because investigators working on behalf of Huawei purchased models of the accused products at stores in the city. That it is possible to bring cases in any district where allegedly infringing products are sold potentially opens up a host of forum-shopping opportunities for patent owners in China.

What is abundantly clear is that Huawei is moving up a gear in efforts to recoup returns on its long-standing commitment to spending large sums on R&D. Last year, the Chinese company invested 15% of its annual revenue – or Rmb59.6 billion ($9.2 billion) – into R&D activities. Over the past 10 years, its total R&D expenditure clocks in at over Rmb240 billion ($37 billion). After rumours emerged that it had received “millions” in patent licensing fees from Apple, Huawei has taken action against Samsung and T-Mobile. There can be little doubt that other companies are also in its crosshairs.  

Huawei has spent billions to build one of the world’s most formidable patent portfolios. As time has gone on, the pressure to create some added value from that massive investment has mounted. It has taken time and bitter experience – including attacks from foreign patent owners – as well as the creation of an expert IP team to reach a stage where it is comfortable to begin asserting its IP rights.

The company's story reflects that of Chinese industry more broadly. Filing thousands upon thousands of patent applications is one thing; but the real IP coming-of-age for China will be when its rights holders prove the value of their assets by licensing them, by using them to create new businesses, and by confidently and successfully asserting them against foreign competitors, and in foreign jurisdictions. On that count, it looks like Huawei is leading the way.