Phone maker ZTE takes antitrust angle in European patent fight

ZTE says Vringo won't license standards-essential patents on fair terms

Chinese mobile phone maker ZTE is doing battle in Europe with a firm that holds a portfolio of standards-essential patents, saying that it is impeding fair competition by not licensing the intellectual property on reasonable terms.

ZTE has filed an antitrust complaint with the European Commission against New York patent licensing firm Vringo and its subsidiaries. Vringo owns standard essential patents (SEPs) in the telecommunications arena. Companies that own such patents are generally required to license them on fair, reasonable and non-discriminatory (FRAND) terms. However, disagreement about what constitutes a reasonable licensing fee in these cases has led many technology companies to the courts.

ZTE has been trying to negotiate a deal with Vringo on FRAND terms since 2012, but it has been unable to reach an agreement, and has now asked the European Commission to investigate Vringo's licensing practices.

A Commission spokesman confirmed that it has received the complaint.

Vringo did not immediately reply to a request for comment.

ZTE and Vringo have been tangled in worldwide patent disputes since 2012 when Vringo filed a suit with U.K.'s High Court of Justice alleging infringement of European patents. Since then, Vringo has sued ZTE several times in Germany as well as in France, the Netherlands, Brazil, Australia, Spain and India.

Vringo won some of the cases while others are still pending or have been appealed by ZTE. On Wednesday, the Court of Justice of Rio de Janeiro in Brazil upheld a preliminary injunction restraining ZTE from selling and importing equipment that could infringe on a Vringo patent related to 3G, 4G and LTE infrastructure, Vringo said. The injunction is likely to stay in place until a decision on the merits of the case is reached.

ZTE said it respects the intellectual property of other companies, adding that it has signed dozens of global intellectual property licensing agreements with holders including Qualcomm, Siemens, Ericsson and Microsoft. In 2013, ZTEs licensing expenses as a proportion of revenue were among the highest in the telecommunications industry globally, it said.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, open-source and online payment issues for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com

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