Huawei patent case shows Chinese courts’ rising clout

FILE PHOTO: The Huawei logo is seen during the Mobile World Congress in Barcelona, Spain, February 26, 2018. REUTERS/Yves Herman

(Reuters) – A smartphone patent fight between Huawei Technologies Co Ltd [HWT.UL] and Samsung Electronics Co (005930.KS) could reach a global resolution through a ruling by a Chinese court, a development that reflects the growing attractiveness of China as a quick and effective forum for intellectual property disputes.

The size of the U.S. market and the strength of the country’s independent judiciary have historically given its courts the final say in most big cross-border patent disputes. Legal experts say US courts’ pre-eminence in intellectual property matters has helped foster a culture of innovation that China wants to emulate.

The case is being closely watched because it has set up a clash between the two judicial systems, with a US judge instructing Huawei not to enforce a ruling it won against Samsung in China, said Erick Robinson, a Beijing lawyer who previously was Qualcomm Inc’s Asia patent director.

“This has never happened before, at least not on this scale,” Robinson said in a recent interview.

Huawei filed lawsuits in both the United States and China in 2016, alleging Samsung used its cellular communications technology without authorization and has unreasonably delayed entering into a licensing agreement. Samsung has denied the allegations and accused Huawei of seeking “grossly” inflated licensing fees. (reut.rs/2JqAMua)

In January, the Intermediate People’s Court of Shenzhen, China, outpaced a federal court in San Francisco, ruling for Huawei and issuing an order blocking Samsung’s Chinese affiliates from manufacturing and selling 4G LTE smartphones in China.

If the order goes into effect, Samsung would face great pressure to settle because it has large plants in China and has sold millions of phones there, said Robinson.

Huawei and Samsung both declined to comment.

Richard Vary, a lawyer in London and former head of litigation for Nokia (NOKIA.HE), said Chinese courts have risen from being the “fourth or fifth” jurisdiction a global company would consider for patent litigation.

“Now it is the second after the US and has perhaps even moved up ahead of the U.S. so that now you consider it your key forum,” Vary said.

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