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February 22, 2019

Could an intellectual property claim halt Xiaomi’s UK charge?

By Luke Christou

Chinese smartphone manufacturer Xiaomi could become the latest telecommunications company to be hit by an intellectual property claim that has been plaguing the industry for years.

IPCom, an intellectual property management and patent licensing company, believes that Xiaomi has infringed a patent it holds concerning how mobiles phones gain access to a network.

According to the company, in principle, any device that uses the 3GPP UMTS telecommunications standard to connect to a cellular network infringes on the patent. Xiaomi’s Mi A2 Lite, Mi 8 and Pocophone F1 phones are all advertised as 3GPP UMTS telecommunications standard handsets.

According to IPCom, it has offered Xiaomi the right to use its technology under a FRAND (fair, reasonable, and non-discriminatory) licence. However, the Chinese manufacturer has failed to respond.

“Xiaomi has only recently made its debut into the UK market, and by failing to take up our licence offer – or even to enter into an open, transparent discussion with us – is stifling progress in the telecoms and tech sector and preventing fair reward for R&D [research and development] innovation,” Pio Suh, Managing Director of IPCom, said.

“Royalties from its licence programmes allow IPCom to invest in the research and development of new innovations that are empowering wireless communications, including 5G, the next generation standard,” he said. “Work such as this can only continue if all parties in the ecosystem play by the rules, partake in open negotiations and ensure that only legal, licensed products are available to UK consumers.”

The company has owned the patent since purchasing the mobile technology portfolio of electronics company Bosch in 2007. It currently holds more than 1,000 patents registered throughout Europe, Asia and North America.

What does this mean for Xiaomi in the UK?

Xiaomi only entered into the UK market in November with the launch of its Mi 8 Pro flagship smartphone. Xiaomi handsets have since gone on sale in John Lewis and Carphone Warehouse stores. However, Xiaomi’s push could be held back by a long and costly legal battle should it decide to challenge IPCom’s demands.

According to IPCom, by selling smartphones that use the company’s property without an appropriate licence, they are also in breach of IP laws. Both John Lewis and Carphone Warehouse have reportedly been contacted and alerted to the situation, which could put them off of stocking Xiaomi devices if the situation isn’t resolved.

Xiaomi has said that it is “assessing the situation and will take all necessary appropriate actions”. However, IPCom is confident that it will get a result. The company points to previous cases against HTC and Nokia as proof that it holds a legitimate claim to the technology in question. Both companies previously lost similar cases against IPCom in the UK Court of Appeals.

“Previous successes in landmark cases against HTC and Nokia have confirmed the validity of IPCom’s EP ‘268 patent in UK law, something we expect Xiaomi and sellers of its smartphones, to recognise and respect,” Suh said.

Despite that, IPCom was previously unsuccessful in its attempt to claim $2.15bn from Apple concerning the emergency call feature on its iPhone devices. Like Apple, as the world’s fourth biggest smartphone manufacturer, having generated more than $21bn in revenue last year, Xiaomi has the resources to fight against IPCom’s claims.

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