May 24, 2012 / 10:00 AM / 8 years ago

Huawei seeks EU action against InterDigital patent fees

BRUSSELS (Reuters) - World No.2 telecoms equipment maker Huawei has called for EU antitrust regulators to intervene in a dispute with InterDigital, saying the U.S.-based firm is demanding “exploitative” fees for use of its 3G mobile phone patents.

The logo of the Huawei Technologies Co. Ltd. is seen outside its headquarters in Shenzhen, Guangdong province, April 17, 2012. REUTERS/Tyrone Siu

Huawei filed a complaint with the European Commission on Wednesday, after failing to reach a deal with the wireless technology patent holder, making it the latest company to take a patent grievance to the EU watchdog.

“Huawei ... has decided to take this action because it believes that the licensing fees that InterDigital is requesting are exploitative, discriminatory and violate FRAND policies,” Huawei said in a statement on Thursday. It said such actions also breach EU antitrust rules.

“They would also penalize European consumers because the fees, if paid, would significantly increase the cost of Huawei’s mobile devices and even restrict consumer access to telecommunications technology,” Huawei said.

Under policies set by the European Telecommunications Standards Institute, companies must license standard-essential patents to rivals under fair, reasonable and non-discriminatory (FRAND) terms.

“InterDigital has not seen the complaint that was filed, so we can offer no specific response to whatever issues might be raised in the complaint,” said Lawrence Shay, president of InterDigital’s patent holding subsidiaries.

The wireless technology patent holder said it has a track record of licensing to more than 50 companies in the mobile industry that shows its commitment to reach mutually agreeable terms for such licenses.

InterDigital complained last year to the U.S. International Trade Commission about Huawei, Nokia and ZTE Corp, accusing them of infringing seven of its technology patents.

InterDigital, which has more than 19,500 patents and patent applications, made nearly $3 billion in royalties from 2G and 3G licences by December 31, 2011.

Huawei is the world’s sixth biggest mobile phone maker. Based in the southern Chinese city of Shenzhen, it counts among its clients major carriers in China, southeast Asia, Africa and Europe.

In another telecoms patent-related case, the Commission is looking into a complaint by Microsoft that Motorola Mobility and its new owner Google charge too much for the use of Motorola’s patents. Apple is another complainant against Motorola.

The EU’s executive stepped into the patent war in January when it opened an investigation into world No.1 smartphone maker Samsung Electronics related to its patent disputes with Apple in courts across Europe.

Companies can be fined up to 10 percent of their global turnover for breaching EU rules.

InterDigital shares were down 3 percent at $25.12 in afternoon trade on the Nasdaq on Thursday.

Reporting by Foo Yun Chee, additional reporting by Supantha Mukherjee in Bangalore; Editing by Rex Merrifield and Mark Potter

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