December 17, 2013 6:42 pm
China arrest threat for staff of US patent group
By Richard Waters in San Francisco
China’s antitrust authorities have threatened to arrest representatives of a US patent licensing company that is embroiled in a legal dispute with telecoms equipment maker Huawei, the US group has said.
The claim comes as China’s National Development and Reform Commission, its powerful central planning agency, has taken a more assertive stance on enforcing the country’s monopoly laws against foreign companies. Wireless technology has become a recent focus as China prepares for the launch of new high-speed 4G networks.
Interdigital, a San Diego-based intellectual property group that holds a portfolio of patents in high-speed wireless communications, said it had been warned by the NDRC that any executives or legal representatives who attends a meeting that is due to take place in Beijing on Wednesday might be detained or arrested.
“It’s highly unusual and, we think highly improper,” said William Merritt, chief executive officer of Interdigital. In a letter to the NDRC, Mr Merritt said that, “in the light of the threat to detain my executives,” he would not send anyone to China to attend the meeting.
The claim comes ahead of a deadline on Thursday in a legal battle that Interdigital has waged against Huawei in both the US and China. It has brought two cases against the Chinese equipment maker before the US International Trade Commission. Huawei has countered with a suit of its own in China accusing Interdigital of anti-competitive behaviour, which it won in October when the Guangdong High Court awarded Huawei Rmb20m ($3.3m) in damages.
The ITC has become a favourite forum for patent cases, since its power to block the import of products found to have infringed on US intellectual property rights puts pressure on tech companies to settle rather than face disruption to their business.
Interdigital is one of the most prominent among a group of patent licensing companies that have been accused of using aggressive legal tactics to force rich tech companies into paying large settlements, earning them the name “trolls”.
The New York-listed company rejected the charge, arguing instead that the 200 people it employed in research and development and a long history in developing wireless technologies made it more than a legal opportunist. It said that it had spent five years trying to negotiate a licence with Huawei, but that it had not been able to reach deals with any Chinese companies to pay for its technology.
The Chinese antitrust interest in Interdigital began soon after it launched its legal challenges to Huawei in the US, Mr Merritt said. He added: “We don’t know if the government is playing a role – you can draw your own conclusions about whether they are trying to protect Huawei.”
The NRDC has recently also begun an inquiry into Qualcomm, the US wireless technology company that has extensive patents in high-speed communications.
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