InterDigital 'threatened' over bid to collect Huawei patent royalty

PUBLISHED : Wednesday, 18 December, 2013, 6:13am
UPDATED : Wednesday, 18 December, 2013, 6:13am

InterDigital chief executive William Merritt said the Chinese government is threatening the US company over its bid to collect patent royalties from phonemaker Huawei Technologies.

The National Development and Reform Commission said it "couldn't guarantee the safety of people" sent on behalf of the chief executive or the company's US lawyers to a meeting scheduled for today, Merritt said.

"It takes the process and puts it in a different place," he said. "There's nothing in that statement that can be positive."

An investigation began in China after InterDigital, which owns patents on fundamental mobile-phone technology, filed an infringement complaint against Huawei and other handset manufacturers at the International Trade Commission in the United States.

The US agency is scheduled to issue a final decision on the case tomorrow. The meeting with Chinese officials was scheduled for today.

"From everything we heard, they wanted us over before that date" of the final US trade decision, Merritt said. "There was some pressure being put on us in China to get ahead of the ITC case."

InterDigital sent a letter to the Chinese officials saying they would not attend the meeting because of the threats.

William Plummer, a spokesman for Shenzhen-based Huawei, said the company "cannot speak to whatever perceptions another company might have about whatever experience they are having with whatever proceedings in which they might be engaged".

"As for the unrelated ITC case, we welcomed last summer's preliminary ruling" in its favour, Plummer said.

Merritt said that while InterDigital had Chinese patents, it had not filed lawsuits there against Huawei.

"The only thing we've done in China is make non-binding offers to Huawei" on licensing the patents, he said.

Huawei, China's largest maker of phone network equipment, has filed complaints in Europe and China accusing InterDigital of demanding excessive royalties and failing to fulfil its pledge to license patents that are used in industry standards on fair and reasonable terms.

A Chinese court sided with Huawei in February and ordered InterDigital to pay 20 million yuan (HK$25.4 million). InterDigital is appealing.

A US trade judge in July found no violation of InterDigital's patent rights by Huawei, ZTE or Nokia.