QUALCOMM, Inc. (NASDAQ:QCOM)’s standoff with Meizu over patents related to 3G and 4G connections has gone from bad to worse. The chip giant has filed legal action against the Chinese company in multiple countries in addition to a claim in China as it looks to pressure the company into signing a licensing agreement.
Qualcomm has already filed additional actions in Germany, France and the United States, markets that Meizu devices are currently available for sale.
Qualcomm Stance
The standoff first erupted in June when the US-based Chip Company filed a complaint with the Beijing Intellectual Property Court alleging that Meizu had used patents related to 3G and 4G technologies without approval. According to court fillings in China, Qualcomm believes Meizu expanded its business unfairly without seeking proper licensing of the technologies in question.
Qualcomm executive vice-president and general counsel, Don Rosenberg say Meizu refusal to negotiate a licensing agreement prompted legal actions in other countries.
“Meizu’s refusal to negotiate a license agreement in good faith and its sales and distribution of infringing products around the world leave Qualcomm with no choice but to protect our patent rights through these additional legal proceedings,” said Mr. Rosenberg.
Licensing Agreement
Qualcomm relies heavily on its vast portfolio of patent especially on 3G and 4G for earnings. It has already signed a number of agreements for the use of the patents with some of the largest handset makers in the world. By lodging proceedings in multiple countries, the company hopes to force Meizu into entering signing licensing agreements, as is the case with other companies.
By filing legal action outside China, Q is also hoping to put Meizu in serious trouble as the same could amount to a larger payday on favorable ruling. Meizu ranks as one of the largest smartphone makers in the world having sold 20 million devices in 2015. As of the first quarter of this year, it was ranked as the ninth largest seller of smartphones in China.
QUALCOMM, Inc. (NASDAQ:QCOM) stock was unchanged on Friday trading session closing the week at $65.70 a share.