Chinese Smartphone Companies Are Gaining A Foothold In The US
July 7, 2016 (IP Flow) — Until recently, only Huawei and ZTE were internationally recognized Chinese IT companies. Nowadays, however, Chinese businesses in this field are growing by leaps and bounds.
Qualcomm recently filed patent infringement complaints against Meizu in China for infringing its patents covering a broad range of features and technologies used in smartphones, including those relating to 3G (WCDMA and CDMA2000) and 4G (LTE) wireless communications standards. Meizu is a Chinese smartphone-maker backed by online-shopping giant Alibaba.
In a press release, Don Rosenberg, executive vice president and general counsel of Qualcomm stated the following:
Meizu has refused to engage in good-faith negotiations despite admitting that it sells products that infringe Qualcomm’s valuable Chinese patents.” “Meizu is attempting to obtain an unfair and improper cost advantage over its competitors. Regrettably, we must turn to court actions in order to protect our rights, and importantly, to maintain fairness and a level playing field for the more than 100 Chinese companies that are respectful of patent rights and have entered into license agreements in conformance with the resolution reached by Qualcomm with China’s National Development and Reform Commission (NDRC).
While Meizu is facing intellectual property issues in China, it is now looking to introduce itself to the American market by selling a Wi-Fi speaker in the United States. If Meizu can successfully find a middle ground in this series of litigations with Qualcomm, it might help Meizu gain a foothold in the American market.
Another interesting aspect to note about the press release is the fact that more than 100 Chinese companies have entered into license agreements with Qualcomm. In this sense, Meizu is just the tip of the iceberg and quite a few competitors from China are likely to emerge in the Unites States in the near future.
In keeping with this trend, a Beijing-based smartphone startup Xiaomi and Microsoft recently expanded partnership to provide innovative user experiences on mobile devices. As part of the agreement, Xiaomi will ship Microsoft Office and Skype on Xiaomi Android smartphones and tablets. Beginning in September 2016, Xiaomi Android devices, including Mi 5, Mi Max, Mi 4s, Redmi Note 3 and Redmi 3 will come pre-installed with Microsoft Word, Excel, PowerPoint, Outlook and Skype applications.
The companies’ new collaboration also includes a cross-license and patent transfer agreement. Xiaomi has also agreed to purchase around 1,500 patents from Microsoft. Given that Microsoft holds more than 60,000 patents, the patents sold to Xiaomi represent just a small share. Nevertheless, such collaborations between Chinese startups and American IT giants will be persistent over time and result in major changes in the competitive landscape.