South Korean smartphone giant Samsung (NASDAQ: SSNLF) has launched a counter-lawsuit against Chinese rival Huawei over an alleged patent rights violation.
Samsung and Huawei, respectively the world’s No. 1 and No. 3 smartphones manufacturers in an industry worth $332 billion, have been battling each other in the courtroom since May 2016.
Earlier this year, Huawei sued Samsung in the United States and China for infringement of intellectual property. The lawsuit accused Samsung of violating 12 patents related to cellular communications technology and software used in its smartphones. Huawei demanded a monetary compensation but not a sales ban on Samsung devices in the United States. It was the first time that a Chinese smartphone maker challenged Samsung in court.
Huawei sues Samsung over cellphone patents https://t.co/wMv6cO2Pki pic.twitter.com/F7a39clg7b
— Engadget (@engadget) May 24, 2016
Now Samsung has responded in kind by filing a countersuit against Huawei in Beijing for the infringement of six of its patents, without releasing any details regarding details of the products in question. Unlike the Huawei lawsuit, Samsung wants them to stop production and sales of devices, including Huawei’s Honor and Mate 8 models, that allegedly violate patent rights.
In a statement, Samsung said they tried to negotiate with other patent holders for the fair licensing of technology, but that their amicable efforts were not fruitful, pushing the Seoul-based company to defend their intellectual property via legal action.
The Beijing court stated, through its official Sina Weibo account, that Samsung is claiming $24 million in damages from Huawei, that in turn said had not received a formal complaint but was ready to defend itself if necessary.
Huawei is pushing Samsung to sign a cross-licensing agreement
Samsung is the world’s top smartphone manufacturer while Huawei sits in third place behind Apple, which also clashed with the South Korean company in a patent battle. The iPhone maker accused Samsung of copying its designs in 2007, even looking to ban the sales of eight Samsung phones in the United States without success. While in the US a jury ruled in Apple’s favor, Samsung won rulings in South Korea, Japan, and the UK. The two eventually reached a settlement agreement in 2014 and dropped all patent disputes outside the United States.
However, the lawsuits didn’t prevent Samsung from overtaking Apple in 2015 as the biggest player in the smartphone market. But now Samsung’s supremacy and Apple’s second place is being challenged by Huawei, which aims to surpass both within the next five years with their cheaper, lower-end smartphones.
“We have signed cross-licensing agreements with dozens of our competitors. We hope Samsung will respect Huawei’s R&D investment and patents, stop infringing our patents and get the necessary license from Huawei, and work together with Huawei to jointly drive the industry forward,” said Huawei’s intellectual property chief Ding Jianxing when his company sued Samsung back in May.
So, rather than seeking compensation, Huawei is actually pushing Samsung to sign a cross-licensing agreement. They have done it before with other competitors like Ericsson, Qualcomm, Nokia, and Alcatel-Lucent.
This agreement allows companies to share patents without excessive money compensation. In the past decade, Huawei, Nokia, and Ericsson have used cross-licensing to make a lot of money, selling and buying patents as an investment directed to modernize its smartphone designs and applications.
Source: Digital Journal
Well, this is an old school method of suing a plaintiff of an infringement suit. The strategy is known as bargaining chip strategy which is quite common. Now it is well understood that both companies are going to enter into a patent licensing deal.