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Qualcomm Files 17 New Complaints in China Courts Against Smartphone Maker Meizu

Qualcomm Files 17 New Complaints in China Courts Against Smartphone Maker Meizu

By Reuters | Updated: 1 July 2016 17:30 IST

Qualcomm Inc has filed 17 fresh complaints in China against Meizu Technology Co, stepping up its battle with the Chinese smartphone maker after the two were unable to reach a licensing accord in the US tech giant's biggest market.

The patent infringement complaints by Qualcomm, submitted to intellectual property courts in Beijing and Shanghai on Thursday, mark the second time in a week it has taken legal action against Meizu, one of China's top 10 handset suppliers. It filed its first complaint in Beijing last Friday.

Qualcomm is seeking to uphold terms of its landmark 2015 anti-trust settlement with China's economic policy panel, the National Development & Reform Commission (NDRC). The San Diego-based firm agreed to pay a fine of $975 million (roughly Rs. 6,566 crores) in the settlement, the largest in China's corporate history.

The 17 latest patent infringement complaints cover a range of features and technologies used in smartphones, Qualcomm said, including those relating to 3G (WCDMA and CDMA2000) and 4G (LTE) wireless communications standards.

"Meizu is attempting to obtain an unfair and improper cost advantage over its competitors," said Qualcomm's general counsel, Don Rosenberg, in an e-mailed statement to Reuters.

The company's vice-president, Li Nan, was quoted by the South China Morning Post as saying at a news conference on Tuesday that the terms of a patent licence offered by Qualcomm were neither fair nor reasonable.

Meizu, located in the southern Chinese city of Zhuhai, was China's eighth-biggest smartphone maker in 2015, shipping 24.82 million devices for the year, according to IDC data.

China accounted for 53 percent of Qualcomm's global revenue of $25.28 billion (roughly Rs. 1,70,208 crores) for the fiscal year ended September 27, with a large chunk of profit coming from higher-margin royalties earned from the company's licensing arm.

As part of its 2015 settlement with the NRDC, Qualcomm agreed to a plan that modified its business practices in China.

The company has since signed more than 100 Chinese handset manufacturers to licensing agreements under the new terms, but has said it continues to struggle with a handful of key original equipment manufacturers.

© Thomson Reuters 2016

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