ZTE’s statement on Huawei’s lawsuits

CHINA: ZTE Corp. notified that Huawei has filed the court petition to the Mannheim Court against ZTE Deutschland GmbH with respect to the LTE and terminal patents.

On March 15, the Mannheim Court in Germany declared to dismiss the Huawei’s accusation of ZTE’s infringement on the LTE terminal patents. With respect to the court’s decision on ‘Key Derivation Function’ patent infringement, ZTE will appeal to the higher court. ZTE is confident that the ZTE product involved in the lawsuit launched by Huawei doesn’t infringe Huawei’s patent rights related to this court petition. The court decision won’t affect any ZTE business operations around the globe including in Germany.

ZTE also notifies that Huawei has launched several other patent lawsuits against ZTE Corporation in Germany, France and Hungary. ZTE has the prepared solutions to all relevant patent lawsuits. These lawsuits won’t affect ZTE’s business operations around the globe. ZTE will pay close attention to these cases and guarantee that such lawsuits won’t interfere with the benefits of both the clients and the company.

Starting from 2011, ZTE has filed 18 patent lawsuits against Huawei in Europe and China, concerning a portfolio of LTE infrastructure, core network and terminals. ZTE won a series of lawsuits in China Shenzhen Intermediate Court and German Patent Courts in 2012.

ZTE will pay close attention to these lawsuits and proactively coordinate with all parties to get the lawsuits well settled. In terms of those unlicensed product sales, ZTE will take any legal means including sales bans and compensation to prevent any infringements to ZTE’s patent rights and protect the benefits of both the clients and the company.

Regarding the five patent lawsuits Huawei launched in Germany, the one patent lawsuit Huawei launched in France and the four patent lawsuits that Huawei launched in Hungary, the situation is as follows:

* Of the five lawsuits in Germany, the Europe Patent Bureau has declared the invalidation for 2 of the 5 patents in 2012. ZTE will continue to follow the other patent cases and their invalidation process and put the prepared solutions into operation.

* The patent family including the rotator data card that Huawei launched the lawsuit about against ZTE in France was declared invalid by China Courts and Germany Patent Courts. ZTE is confident that this patent will be declared completely invalid in France.

* The four patent lawsuits that Huawei has launched against ZTE in Hungary were stopped based on Hungary Court’s judgment on ZTE’s appeal for invalidation on these patents.

ZTE is in a high-tech industry densely driven by high-tech innovations. ZTE takes technology innovation as its DNA planted in the development process, taking the core patents as its core KPI in driving its technology innovations.

ZTE has kept on investing 10 percent of the corporate revenue into the R&D ever since its foundation in 1985. As of 2012, ZTE’s patent applications have reached 48,000, with PCT applications exceeding 12,000. The PCT applications ZTE submitted to WIPO reached 3918 items in 2012, expected to be ranking World No 1 among the global enterprises.

ZTE is expected to possess even more overseas patent licenses in 2014, highly involving in LTE infrastructure, and intellectual terminals. Such a large-scale, high-quality patent mass will make ZTE more forceful and competitive around the globe especially in the European and American markets.

ZTE respects any rational loyalty demands from other vendors and has been seeking for cross-licensing and package solutions to the IPR license issues in the industry. ZTE has to date reached agreements widely with other vendors like Qualcomm, Siemens and Ericsson. In 2012, ZTE is ranked as one of the top tier vendors in terms of patent licensing fee in the industry.

ZTE sincerely reminds all who are highly concerned about the lawsuits launched by Huawei:

* ZTE is committed to the rational competition in the industry and ready to settle any IPR issues through negotiations.

* ZTE will depend on its own established IPR strengths to fight against any irrational and malicious IPR competitions in the industry and try every means to create a healthy business environment for the whole industry.