Jack Ellis

Already embroiled in a standards licensing dispute with competitors Ericsson and Nokia, Huawei now faces battle on a new front after NPE PanOptis sued the Chinese company for alleged infringement of its standard-essential patents (SEPs).

PanOptis and its affiliate Optis Wireless Technology LLC filed suit in the Eastern District of Texas last Friday, claiming that a wide range of Huawei products infringe on five SEPs relating to the LTE telecommunications standard:

  • US patent 6,604,216 – ‘Telecommunications system and method for supporting an incremental redundancy error handling scheme using available gross rate channels’
  • US patent 7,769,238 – ‘Picture coding method and picture decoding method’
  • US patent 7,940,851 – ‘Radio communication apparatus and radio communication method’
  • US patent 8,208,569 – ‘Method and apparatus for multicarrier communication’
  • US patent 8,385,284 – ‘Control channel signaling using a common signaling field for transport format and redundancy version’

While Huawei being sued by an NPE in East Texas is hardly a rare occurrence by this point, the identity of the plaintiff – and the circumstances in which the litigation has been brought – do make this particular instance stand out.

The first of the five patents listed above originally belonged to Ericsson, with the rest originally assigned to Panasonic. Ericsson, of course, recently waded into a wider FRAND licensing battle involving Huawei. In September, the Swedish company intervened as an interested third party in East Texas litigation that Huawei had brought against T-Mobile USA. Ericsson argues that Huawei’s claims of patent infringement against the US carrier “appear directed, at least in part, to equipment supplied to T-Mobile by Ericsson”. This followed an earlier intervention by Nokia, which entered the dispute as a counter-claimant on T-Mobile’s side on a similar basis and subsequently launched its own patent infringement suits against Huawei.

PanOptis has done a number of deals with Ericsson – or at least with Ericsson-affiliated entities – in the past; and the majority of patents in its portfolio appear to have been ultimately sourced from the Swedish company, based on the available assignments data. This not only includes numerous assignments from an entity called Cluster LLC – from which the ‘216 patent listed above was transferred – but also a large chunk of the patents which PanOptis bought from Unwired Planet for up to $40 million last year, most of which had been transferred to the defunct PIPCO by Ericsson.

There is nothing to suggest that the PanOptis action targeting Huawei is in any way related to the T-Mobile dispute, or indeed that Ericsson has any say at all over how the NPE goes about licensing its patents. In court documents viewed by IAM, PanOptis claims to have initiated contact with Huawei to make a licensing offer in April 2014, long before Ericsson stepped into the ring with T-Mobile. Nevertheless, this latest development does give us an impression of the mounting pressure that Huawei is now under since it began to adopt a more aggressive line on monetising its own IP assets.

The other thing worth mentioning here is that aside from Ericsson, PanOptis has also acquired substantial portfolios from two of Asia’s top SEP holders – namely, Panasonic and LG Electronics. Huawei is itself a major player in terms of SEP ownership and, as we have already discussed, increasingly appears to be in monetisation mode. In all probability, it will be quite some time before we see any resolution to this latest dispute. But if and when an out-of-court settlement is reached between the two parties, don’t be too surprised if a patent transfer from Huawei to PanOptis is part of the deal – just as it was when the Chinese company ended its long-running spat with InterDigital last September.