U.S. Markets open in 4 hrs 7 mins

Huawei Sues Verizon in U.S. for Multiple Patent Violations

Bloomberg News

(Bloomberg) -- Huawei Technologies Co. has filed two patent infringement lawsuits against Verizon Communications Inc. following an apparent failure to agree on licensing terms for the use of its intellectual property.

The Chinese telecom gear and smartphone-making giant said it had reached out to Verizon a year ago, notifying the U.S. carrier of its breach of multiple Huawei patents. Among the offending pieces of technology are network security measures, remote sharing from a PC, parental controls and even the design of a contacts app for mobile devices.

The Huawei lawsuits are a “PR stunt,” said Rich Young, a Verizon spokesman. “The action lacks merit, and we look forward to vigorously defending our company and our nation.”

Though the content of the legal action doesn’t appear to have the highest of stakes, it’s a fresh sign of Huawei’s increasingly combative stance toward U.S. companies in the wake of crippling sanctions from Washington. Huawei sued the Federal Communications Commission in December, seeking to overturn a regulatory decision that would hurt the Chinese corporation’s business with its last major American clients.

Another point of legal conflict surrounds the arrest of Chief Financial Officer Meng Wanzhou in Vancouver, British Columbia, more than a year ago. Meng, also the eldest daughter of billionaire founder Ren Zhengfei, is facing a potential extradition to the U.S. for fraud charges, though she denies any wrongdoing.

Shenzhen-based Huawei is one of the world’s most prolific patent holders, with more than 80,000 worldwide and 10,000 in the U.S. alone, the company said in a statement today. It’s also one of the leading developers of fifth-generation wireless networking tech, or 5G. It joined IBM, Apple and Amazon as one of the top 10 patent receivers in the U.S. last year, according to an analysis of filings with the U.S. Patent and Trademark Office. Huawei said last summer that it will not weaponize its vast IP pool and was discussing licensing of its portfolio of patents with European and U.S. entities including Verizon and Qualcomm Inc.

A 173-page lawsuit, filed in Waco, Texas, focuses heavily on Huawei’s research history, Verizon’s products and details of licensing talks, including several meetings in New York between representatives of the two companies. Huawei accuses Verizon of infringing on seven patents related to network infrastructure, including routers, and its Smart Family and One Talk applications.

“Because Verizon has not accepted Huawei’s numerous flexible approaches during the yearlong negotiations, Huawei is compelled to now enforce its patent rights through this lawsuit,” Huawei said in the complaint.

In the second lawsuit, filed in Marshall, Texas, Huawei claims Verizon infringes as many as five patents that relate to the G.709 industry standard for optical transport network systems used to transmit large amounts of data. Huawei said its offer complied with the requirement to license standard-essential technology on reasonable terms.

The cases are Huawei Technologies Co. v Verizon Communications Inc., 20-30, U.S. District Court for the Eastern District of Texas (Marshall), and Huawei v. Verizon, 20-90, U.S. District Court for the Western District of Texas (Waco).

(Updates with details of lawsuits beginning in seventh paragraph.)

--With assistance from Scott Moritz and Susan Decker.

To contact Bloomberg News staff for this story: Gao Yuan in Beijing at ygao199@bloomberg.net

To contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Vlad Savov, Colum Murphy

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.