China Patent Wars: Huawei Sues ZTE


Huawei today filed lawsuits in Germany, France, and Hungary against ZTE a fellow Chinese manufacturer of telecom equipment – with strength in 4G/LTE technology among others. The interesting point here is the company is being sued for patent and trademark infringement and what this shows us is a greater concern for patents and trademarks in China. At least from Huawei.

According to the company, they paid US $222 million themselves in patent licensing fees to obtain the legal right to use patents and technologies of other companies in the industry. In fact TMCnet reported two weeks ago that Huawei and Motorola Solutions settled patent disputes.

This is great news as Huawei had a reputation years back for copying technology from companies like Cisco and after losing a  court case they seem to have become more serious about patents and trademarks.

Last month I pointed out how a sales boom for tech and media is being unleashed by China as a result of it announcing 3,001 people have been arrested for rampant product piracy and seized fake or counterfeit medicines, liquor, mobile phones and other goods.

This is all great news for western companies who have invented technology which China wants to and will continue to use. Moreover, adhering to and dealing with patent and trademark law increases the costs for Chinese companies, driving up their expenses to be more in line with their competition around the world.

This is a good thing and as you may recall, competition from Huawei and ZTE were in-part responsible for the Nortel bankruptcy. If China is playing on a more level field, the entire market wins as inventing the next generation of technology is expensive and risky… If all the margins are squeezed out, the entire tech and telecom suffers.

For more, check out my entry relating the Apple App Store to the Opec of the West.

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