Huawei Sues Samsung, Demands Royalties on Phone and Tablet Tech

Huawei Technologies Co. filed patent suits against Samsung Electronics Co. in the United States and China after the two weren't able to reach a licensing deal over the use of technology fundamental to how mobile networks operate.

In a lawsuit filed Tuesday in federal court in San Francisco, Huawei claims Samsung infringes as many as 11 patents related to the industry standard for fourth-generation mobile devices. It's seeking cash compensation. In the public portion of the complaint, Huawei doesn't seek any order to block sales of Samsung products in the US.

The public version of the complaint is heavily redacted to mask confidential information.

The patents cover communications networks and software to operate LTE networks established through international standard-setting organizations, Huawei said in the complaint. Huawei, one of the world's largest makers of networking gear, said it's offered to charge Samsung a fair and reasonable rate but Samsung refuses to pay.

"We have a good history of licensing and cross-licensing of our peers," said William Plummer, a Huawei spokesman. "We hope that Samsung will do the right thing."

Huawei said it spends 15 percent of its revenue on research and is one of the biggest contributors to the industry standards for telecommunications so devices can talk to one another.

The case, as well as a suit filed in Shenzhen People's Court in China where Huawei is based, threatens to become engulfed in a broader debate over how to value patents that are related to standardized technology such as mobile communications.

Companies that get together to develop industry standards pledge to license any patents on "fair, reasonable and non-discriminatory" terms. Tech companies are split on how to define what exactly that means, and the issue has led to lawsuits and policy arguments around the world.

Plummer said that Huawei has "fulfilled all of our obligations" to make a fair offer to Samsung. He declined to comment further on any negotiations.

Samsung's own standard-essential patents were asserted against Apple in their smartphone fight. The administration of President Barack Obama vetoed an import ban Samsung had won against Apple because of concerns a trade agency hadn't addressed questions about such patents.

Ericsson, which vies with Huawei for title of top global networking company, also claimed Samsung refused to pay fair and reasonable rates. The companies later settled, an outcome Plummer said Huawei is seeking.

Officials with Suwon, South Korea-based Samsung didn't immediately return queries seeking comment.

© 2016 Bloomberg L.P.