April 28, 2011 4:47 pm

Huawei sues ZTE over patents

Huawei, China’s largest telecom equipment vendor, is suing ZTE, its crosstown rival, over patents and trademarks in three European countries, the latest in a wave of legal fights over intellectual property in the industry.

Huawei said it had filed lawsuits on Thursday in Germany, France and Hungary accusing ZTE of infringing its patents relating to Long Term Evolution, a next-generation mobile technology, and data card technology. Huawei also accused ZTE of illegally using a trademark registered by Huawei on some of its data card products.

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“Our objective is to stop the illegal use of Huawei’s intellectual property and resolve this dispute through negotiation so that our technology is used in a lawful manner,” said Song Liuping, Huawei’s chief legal officer.

The company said it had called on ZTE out of court to stop its practices and suggested talks on cross-licensing, but had received no substantive response.

ZTE rejected Huawei’s accusations and threatened to take legal action itself.

“ZTE Corporation is astonished that Huawei Technologies has taken these legal actions. As a company listed on the Hong Kong stock exchange, ZTE respects and adheres to international intellectual property laws and regulations without reservation, and absolutely rejects that there has been any patent and trademark infringement,” the company said in a statement.

“ZTE is always willing to negotiate on issues in good faith, but will definitely take vigorous legal action in situations like this to protect its interests and those of its customers worldwide.”

Huawei’s step is the second such action to hit ZTE in a month and comes as its smaller rival is expanding quickly in Europe.

The telecoms industry is seeing a host of similar disputes as competition in the sector intensifies and companies are getting ready for the next round of heavyweight contracts as operators prepare to build fourth-generation wireless networks.

This month Ericsson, the world’s largest network equipment vendor, sued ZTE in the UK, Germany and Italy over alleged infringement of patents for second- and third-generation wireless technology. The Swedish company said its legal action followed four years of fruitless talks to settle the disagreements. ZTE hit back, saying it would seek to invalidate Ericsson’s patents in China.

Huawei only just settled a dispute with Motorola in which the US company had accused it of trade secrets theft and Huawei had sued Motorola over potential intellectual property rights infringement.

Huawei and ZTE have long been fierce competitors. The rivalry between the two, both with headquarters in the Southern Chinese city of Shenzhen, goes so far that executives from both companies resent being compared with the other.

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