Saturday, June 21, 2014, 11:26
ZTE files antitrust complaint with EU against Vringo
By Gao Yuan

 ZTE files antitrust complaint with EU against Vringo
Customers check out ZTE Corp's products at an exhibition in Shenzhen, Guangdong province. The company on Thursday requested the European Commission to investigate the licensing practices of Vringo Inc, a US-based telecom patent developer. (Photo provided to China Daily)

Mobile phone maker ZTE Corp's antitrust move in Europe may prompt more Chinese companies to file similar complaints, industry experts said on Friday.

The Shenzhen-based ZTE had on Thursday requested the European Commission to investigate the licensing practices of Vringo Inc, a United States headquartered telecom patent developer, on grounds that Vringo was in violation of the EU's fair, reasonable and non-discriminatory terms on patent licensing.

"It is appropriate for ZTE to take meaningful initiatives to protect its IP interests in Western markets, especially as other Chinese IT companies are reluctant to do so," said Xiang Ligang, a well-known telecom researcher and founder of industry site CCTime.com.

"ZTE steadfastly opposes all forms of abuses of intellectual property, and the improper use of patent assets as a tactic in licensing negotiations," the company said in a statement, adding it reserves the right to pursue further action across different jurisdictions.

Vringo did not immediately respond to the charges, when contacted.

Europe is ZTE's major focus outside of China. Senior executives told China Daily earlier this year that the company is aiming double-digit revenue growth in the region over the next five years.

"Chinese IT companies seemed hand-tied and passive when dealing with overseas IP lawsuits in the past due to their lack of patents," Xiang said. Chinese companies, defenders in most cases, also ended up on the losing side in most of the cases or had to pay huge amounts as settlement fees, he said.

ZTE and Vringo have patent disputes around the globe. Starting from 2012, Vringo has sued ZTE several times in markets like the United Kingdom, France, Australia, Brazil, Germany and India.

Most of the cases are still pending or appealed by the Chinese company as Vringo won the rest.

"ZTE usually keeps a low profile in patent cases because it does not have the requisite patent assets to defend itself," said Milly Xiang, a senior telecom analyst at research firm IDC China.

The unusual lofty-toned counterattack this time indicates ZTE's heavy investment in IP has given the company some confidence in winning the lawsuit in courts, she said, adding it is also possible for ZTE to file similar suits elsewhere also.

ZTE has filed applications for more than 52,000 patents globally, with more than 16,000 granted so far. Most of its patents are in 4G LTE technology, smart terminals, optical networking, cloud computing and data analytical areas, according to the company. It also pledged to invest in 5G telecom network development.

"Such investments will help enhance ZTE's competitiveness and IP capabilities and enable the company to cope with changes in the technology landscape and market environment," it said.

Despite the series of "active moves" from ZTE, Xiang from IDC feels that Chinese telecom companies may still find it difficult to win an upper hand in overseas IP lawsuits.

"Local enterprises are going to need more time to arm themselves with intellectual property assets because many of the patents are still controlled by foreign organizations," she said.