Competition within the mobile industry is definitely intense. As such, smartphone brands have patents over their designs and whoever uses those patents without permission will legal complaints. For one, the world’s No.1 and No.3 smartphone makers, Samsung Electronics Co Ltd with 22.3% market share and Huawei Technologies Co Ltd with 8.9% market share, went against each other for a patent showdown.
In May 2016, Samsung encountered their first major legal challenge from their Chinese competitor, Huawei. Huawei sued Samsung for infringing 11 of its patents on operating systems, user interface software and 4G cellular-communication technology. Huawei sued its South Korean rival in California and Shenzhen, which are the largest markets of smartphones for Samsung. In the lawsuit, Huawei stated that “Samsung and its affiliates have earned billions of dollars by selling products that use Huawei’s technology.”
Ding Jianxing, Huawei’s president of intellectual property rights, said, “Thus far, we have signed cross-licensing agreements with dozens of our competitors. We hope Samsung will respect Huawei’s R&D investment and patents, stop infringing our patents and get the necessary license from Huawei, and work together with Huawei to jointly drive the industry forward.”
Following July 2016, Samsung filed a countersuit against Huawei for infringing 6 of their patents and claiming 161 million yuan ($24.14 million) in damages. Furthermore, they asked to stop production and sales of some products. Samsung mentioned in a statement, “Despite our best efforts to resolve this matter amicably, it has regrettably become necessary to take legal action in order to defend our intellectual property.” To which Huawei’s spokesperson responded that they haven’t received a formal complaint regarding the matter. However, “we will review any documentation and defend ourselves as appropriate when we do.”
As a result, more tech companies are investing more in research and development of their other offerings that cater to enterprises and other consumer groups. For instance, Huawei is investing more than $9B in R&D in its consumer unit alone, even outdoing Apple by more than a billion every year. With the increasing cautionary practices for patent infringement in the industry, Huawei and more brands are keeping a closer eye on developing more innovative solutions and technologies outside the consumer group to get the leg up in intellectual property claims.