Caught in Patent Trap
Emerging China’s second-generation smartphone manufacturers, including Xiaomi and OPPO, have recently been caught up in patent wars. Global communications service provider Ericsson already took legal action against Chinese companies including Xiaomi for patent infringement. But local first-generation smartphone manufacturer rivals such as Huawei and ZTE are also going after them, planning to file lawsuits for the same reason.
According to sources in the industry on Dec. 15, Huawei and ZTE are preparing to sue Xiaomi, OPPO, and Bubugao for infringement of their patent rights. Earlier, Huawei and ZTE sent out a warning letter to these companies asking them to stop infringing on their patents and pay legitimate royalties. However, as they did not respond, Huawei and ZTE decided to take legal action against them.
A source in the industry said, “It was confirmed that China’s second-generation smartphone manufacturers had been violating four to five patents related to communications technology, including WCDMA, which is used in 3G mobile communication.”
Huawei and ZTE are strong patent holders, collecting more than 70 percent of relevant royalties in China’s mobile phone market. Huawei has nearly 30,000 of the 39,000 mobile phone patents in China. It has also registered 7,000 patents this year alone. In comparison, Xiaomi only has about 10 patents in China.
China’s second-generation smartphone makers have already been sued for patent issues in the overseas market. Earlier, Ericsson brought a lawsuit against Xiaomi for violating eight of its patents related to 3G communications technology in an Indian court, and issued an injunction that banned Xiaomi from selling its smartphones in the Indian market.
Patent wars between China’s first and second-generation smartphone makers can even make it harder for the second generation to sell their products in the market at home, which has been the engine of their growth until now.