Smartphone maker Meizu seeks review of Qualcomm license deals amid US giant’s patent lawsuit

PUBLISHED : Tuesday, 28 June, 2016, 10:09pm
UPDATED : Tuesday, 28 June, 2016, 10:09pm

Chinese smartphone maker Meizu Technology may be gearing up to fight Qualcomm in court, rather than accept an “unjust patent license agreement” with the US mobile chip giant.

Meizu vice-president Li Nan said at a press briefing in Beijing on Tuesday that the terms of a patent license offered by Qualcomm to the Zhuhai-based company were neither fair nor reasonable.

“We are willing to negotiate to reach an agreement ... but we want a fair and reasonable price,” Li said.

His comments followed a patent-infringement lawsuit initiated by Qualcomm, the world’s largest supplier of mobile chips, against Meizu in the Beijing Intellectual Property Court last Friday.

According to Qualcomm, it would have preferred to reach a resolution with Meizu without the need for litigation.

“Meizu, unfortunately, has been unwilling to negotiate in good faith and enter into a license agreement ... while unfairly expanding its business through the use of Qualcomm’s innovations,” Qualcomm said in a statement.

Speculation has been rife in mainland media that Qualcomm had asked the court for a 520 million yuan (HK$607.13 million) compensation from Meizu in its lawsuit.

The US company pointed out that more than 100 other companies, including the largest Chinese mobile device suppliers, have accepted its 3G and 4G patent license deals.

Lenovo Group, the world’s largest supplier of personal computers, announced in February that it has entered into new royalty-bearing 3G and 4G patent license agreements with Qualcomm.

High-flying information technology start-up Xiaomi agreed to new 3G and 4G license pacts with Qualcomm in December.

Meizu’s Li, however, said Qualcomm was not being transparent with those deals in mainland China.

“We need to see those other patent-licensing agreements, so we can determine if the [proposed] deal with Meizu is fair,” Li said.

Qualcomm has said that the royalties payable by its licensees, such as Lenovo and Xiaomi, are consistent with the terms of the “rectification plan” it submitted to China’s National Reform and Development Commission.

That plan was part of the resolution made by Qualcomm in February to end a 14-month long government probe in China for anti-competitive practises.

Research firm Strategy Analytics said in a report that last year’s top-five smartphone brands in mainland China, the world’s biggest smartphone market, were Xiaomi, Huawei Technologies, Apple, Vivo and Oppo.

Meizu is one of a growing number of Chinese suppliers which sell a choice of smartphones based on either the ubiquitous Android or Alibaba Group’s own YunOS mobile platform.

E-commerce giant Alibaba, which owns the South China Morning Post, bought an undisclosed stake in privately held Meizu for US$590 million last year.