updated 09:33 pm EDT, Fri March 15, 2013
Ruling first of three court proceedings between the pair in two weeks
The Mannheim Regional Court in Germany has ruled in an LTE patent suit brought by Huawei against ZTE, with Huawei has winning an injunction in the country against ZTE. The ruling prevents it from selling LTE base stations in Germany. Despite the injunction, a minor victory was won by ZTE, as it is still allowed to sell USB "4G" modems. The devices were deemed to be not infringing, and cleared by the court.
The patent at stake is called "allegedly essential" to the fourth-generation cellular telecommunications standard, Long Term Evolution (LTE) by patent analyst Florian Mueller. The patent violation embargo can be enforced by Huawei if it posts a bond of one million euros ($1.3 million), even during an appeal. Contempt of court is punishable by a fine of up to 250,000 euros ($327,000) per infringement, which generally means per shipment, not per unit. In outlying cases, corporate management can be jailed for up to six months per violation up to a maximum of two years.
Mueller believes that ZTE will comply with the court, and take a license from Huawei. As a possibility, it may make an "improved offer to Huawei for taking a license to this patent or to Huawei's entire cellular SEP portfolio." ZTE did try to license the patent from Huawei prior to trial, but the offer wasn't sufficient for the court. If ZTE makes an acceptable offer before next week's Dusseldorf Regional court hearings on two more unrelated Huawei versus ZTE 4G patent lawsuits, the agreement may be broad enough to cover all of the alleged violations.