Netgear targets Huawei over ‘racketeering’ and ‘abusive’ practices
Computer networking firm claims Huawei’s actions are a ‘scheme’ to dominate the WiFi SEPs market | Latest complaint follows similar litigation in Germany and before the UPC.
Computer networking firm Netgear has sued Huawei Technologies in a California court, accusing the Chinese tech giant of “racketeering” in an attempt to dominate the market.
Netgear, based in San Jose, California, argues that the patents held by Huawei are essential to its products and must be licensed on fair, reasonable and non-discriminatory terms (FRAND)—something that it says Huawei has refused to offer.
Instead, Huawei has demanded “exorbitant and unreasonable” royalties for the use of its WiFi patents, said Netgear.
In its 115-page, partially redacted complaint—filed yesterday, January 30—Netgear summarises the reasons behind its lawsuit.
‘Unfair practices’
The action “arises out of Huawei’s misrepresentations to standards organisations, abusive licensing practices, anti-competitive behaviour, unfair business practices, breach of contract, scheme to defraud and dominate markets worldwide, pattern of racketeering activity, and other behaviour that violates federal and state law”, Netgear alleges.
The hardware firm goes on to claim that Huawei provided false Letters of Assurance to the IEEE Standards Association, promising to license its standard-essential patents (SEPs) on FRAND terms “while not intending to honour its representation”.
“After deceiving IEEE, its members and implementers of Wi-Fi technologies, Huawei has exploited its unlawfully acquired power against Netgear…”.
This exploitation, claims Netgear, includes refusing to license its patents on FRAND terms; demanding excessive and discriminatory royalties from Netgear and similar companies; discriminating against Netgear in its pricing demands, and well as] refusing to provide proof that its licensing terms and conditions are free from discrimination.”
Netgear adds that it is seeking an injunction in Dusseldorf, Germany before performing any of its IEEE obligations; and is also seeking an injunction from the Unified Patent Court.
‘Deceitful scheme’
The networking firm claims that Huawei’s “deceit” is part of a scheme to dominate global markets, adding that the Chinese firm is “willfully and knowingly involved in a pattern of racketeering activity”, including “attempts to extract supracompetitive rates and injunctions, which constitute mail and/or wire fraud”.
“Huawei injures companies by requiring users and implementers in the US to pay non-FRAND fees for standardised products. Huawei does this by making and acting on threats to seek injunctive relief against users and implementers.”
It goes as far to allege that “Huawei’s fraudulent, unfair and anticompetitive actions have only intensified since the US banned Huawei products” there, claiming that its actions against US companies are “retaliatory”.
Host of demands
Among its numerous relief demands, Netgear is seeking treble damages of an amount to be specified at trial.
The firm is also asking for a decree that Netgear is entitled to an “implied licence to Huawei patents under its Qualcomm licence in relation to Netgear’s products with Qualcomm modem chipsets, including Huawei patents in the relevant Wi-Fi market”.
It is also requesting a decree that the Qualcomm Licence “exhausts any purported patent rights held by Huawei at least as to Netgear’s products with Qualcomm modem chipsets”.
Netgear is represented by McKool Smith, led by Alan Block, while counsel for Huawei have not yet appeared.
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