Huawei accused in suit of seeking excessive fees for patent use

HUAWEI Technologies is conspiring with the Chinese government to “wrongfully dominate” the market for telecom equipment by setting onerous terms for the use of its intellectual property, a US-based company claims in a lawsuit.

ADVA Optical Networking’s North American unit said in a lawsuit filed on Monday (May 8) in Texas that the sanctioned-Chinese company refuses to license its patents on “fair, reasonable and non-discriminatory” terms, as required by the Telecommunication Standardization Sector of the International Telecommunication Union.

Huawei, holder of the world’s largest portfolio of 5G patents, announced two years ago that it would begin charging “reasonable” fees for access to them. This was seen as a way for the company to generate revenue in the face of sanctions, in the US and elsewhere, over its ties to the Chinese government.

ADVA, which makes network equipment, said in the lawsuit that it wants to license Huawei patents to comply with international standards for optical transport networks and Datacom, but that Huawei is asking it to pay “grossly excessive or supra-competities royalties” and also wants it to pay for the use of patents that are not essential to international standards. It also claims Huawei has infringed on ADVA patents.

Huawei has made knowing misrepresentations to ADVA, refused to provide information in a timely manner and failed to meet its obligation to offer its patents at a reasonable rate – all of which “are part of a conspiracy by Huawei and its worldwide affiliates, in conjunction with the Chinese government, to wrongfully dominate and control the market for telecommunications equipment”, ADVA claimed in the lawsuit.

Huawei didn’t have an immediate comment on the lawsuit. BLOOMBERG