China's largest telecommunication equipment supplier, Huawei Technologies, has won a preliminary injunction prohibiting its hometown rival ZTE from using a Huawei trademark on USB broadband modems sold in Germany. The injunction is part of a larger legal battle over trademark and patent infringements the two companies are fighting in several countries.
This is coming on the heels of similar patency law suits filed by Ericsson against the same ZTE in several European courts a few months ago. The Swedish telecoms equipment maker filed the suits in the UK, Italy and Germany after trying to reach an agreement with ZTE about licensing its patents.
Huawei said last week that it had been granted the injunction in a German court. Two weeks ago, the company filed lawsuits in Germany, France and Hungary, alleging that ZTE had infringed on a series of Huawei patents involving mobile broadband modems and higher-speed fourth generation technology known as LTE (Long Term Evolution). The lawsuits also accuse ZTE of illegally using Huawei's trademarks on some of its modem products.
A copy of the German court document said that ZTE is temporarily prohibited from using a Huawei trademark on its USB broadband modems in the country. "The court's decision will protect our intellectual property and we look forward to ZTE ensuring that Huawei's innovations and technologies are used in a lawful manner," Huawei spokesman Ross Gan said via e-mail.
ZTE, however, contends that Huawei's lawsuit is without merit and suggests the case is being used as a tactic to interfere with the company's business in Europe. To all and sundry this appeared like a major victory for Huawei in its legal clash with ZTE, but ZTE issued a statement saying that the case isn't over yet and that it is still pursuing options that could turn things around.
ZTE said it wanted to clarify reports about the injunction, as many of them do not state that it is a preliminary and temporary one, granted as an interim legal process in the lawsuit. It said that all Huawei had to do to get the preliminary injuction was file an application with the court, suggesting it was simply a matter of paperwork.
The preliminary injunction centers on an environmental certification used in Europe indicating compliance with the Restriction of Hazardous Substances (RoHS) Directive. Huawei had designed a trademark reflecting the certification, which the company now alleges ZTE has illegally used on its own modem products.
ZTE claims it stopped using the trademark in July 2009, months before Huawei applied for it as its own with the European Union. Furthermore, ZTE argues Huawei's RoHS designed logo shouldn't even be considered a legitimate trademark. "This is like having a little bit of graphic design around the words 'energy saving', and use it as a trademark of household appliances," ZTE said in a statement. "There is a clear lack of legitimacy."
ZTE added that it believed the trademark case goes "beyond normal technology, marketing and legal litigation."
Shortly after Huawei filed its lawsuits in Europe, ZTE fired back with its own patent infringement cases against its rival, filing them in China. ZTE has also applied with the E.U. to revoke Huawei's RoHS trademark. ZTE also claims that Huawei had no right to register the RoHS logo as a trademark in the first place and that ZTE has asked the EU to revoke it. Restriction of hazardous substances is part of EU legislation, but ZTE said that Huawei is attempting to misappropriate the term and logo for itself. It said this lacks any legitimacy, as it would be like trademarking the words "energy saving".
The dispute over this logo seems somewhat bizarre, as the RoHS logo definitely appears to be something that belongs more in the jurisdiction of lawmakers than technology firms, but Huawei and ZTE have been at each others' throats for some time now. Huawei sued ZTE for infringement of its mobile broadband data card and LTE patents, and ZTE responded with a tit-for-tat LTE lawsuit. The two Chinese telecommunications firms look set to engage in legal battles for a long time to come.
Both Huawei and ZTE are based in the Chinese city of Shenzhen, but their market reach has grown to expand outside of China. A majority of their revenues come from foreign countries -- about 54 percent for ZTE, and two-thirds for Huawei. Both mobile broadband modems and higher-speed LTE networks represent major product markets the companies compete in.
But unlike ZTE, Huawei has generally stayed away from controversy especially with competitors in the foreign market space.
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