April 29, 2011 / 8:06 AM / 8 years ago

UPDATE 2-ZTE sues Huawei in China for patent infringement over 4G tech

* ZTE sues Huawei in China for LTE patent infringement

* Lawsuit comes a day after Huawei sues ZTE in Europe

* LTE market worth $6 billion by 2014 (Adds analyst’s quotes, details)

By Lee Chyen Yee and Huang Yuntao

HONG KONG, April 29 (Reuters) - A tit-for-tat patent infringement case filed by ZTE Corp against its larger Chinese rival Huawei Technologies Co Ltd is the latest illustration that technology companies are increasingly competing in the courtroom as well as the marketplace.

Companies such as Ericsson (ERICb.ST), Samsung Electronics and Apple have also filed lawsuits against competitors, seeking to prevent them from copying proprietary technology or as a way to force higher royalty payments, analysts said.

ZTE , China’s No.2 telecommunications equipment maker, said on Friday in its lawsuit that Huawei, the world’s No.2 telecoms equipment maker and China’s largest, infringed on its patent for fourth-generation LTE (long-term evolution) technology. The latest legal challenge comes a day after ZTE was sued by Huawei in Europe.

“ZTE is rising quite well,” said Huang Leping, an analyst with Nomura International. Huawei is trying to use intellectual property rights “to try to block the growth of ZTE.”

“Typically these patent suits will go through some negotiations and what’s the proper fees they need to pay for each other,” he said.

On Thursday, Huawei said it filed lawsuits against ZTE in Germany, France and Hungary for patent and trademark infringement. [ID:nL3E7FS34V]

Huawei said ZTE had infringed on a series of its patents relating to data card and LTE technology, which is gaining acceptance worldwide. It also said ZTE illegally used a Huawei-registered trademark on some of its data card products.

“ZTE will continue to use legal means to protect our intellectual property rights worldwide too ensure our legal rights are not infringed upon,” ZTE said on Friday. “However, we feel that patent competition shouldn’t become the main means of competing in the industry.”

Huawei executives were unavailable for comment.

Earlier in April, Ericsson also filed a lawsuit against ZTE in Britain over a patent infringement, with an intention to sue in Italy and Germany as well. [ID:nL3E7F71IL]

HIGHER BANDWIDTH

In the up-and-coming LTE sector, global telecom equipment vendors are trying to secure more contracts to build the infrastructure for the new technology, which gives users levels of connectivity on mobile broadband similar to what is now available on home or office networks.

The LTE market is expected to grow to $6 billion by 2014, industry research firm Dell’Oro said, making it a lucrative growth area for Huawei and rivals such as Motorola Inc and Nokia Siemens Networks .

ZTE shares fell 1.2 percent on Friday, underperforming the main Hang Seng index’s 0.5 percent drop. Huawei is unlisted. (Editing by Matt Driskill)

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