Netgear Takes Huawei to Court Over Wi-Fi Patent Dispute
In a legal battle unfolding in California, Netgear has filed a lawsuit against Huawei, alleging racketeering and anti-competitive behavior. The crux of the complaint, filed on January 30 under Case 2:24-cv-00824, centers on Huawei's refusal to license Wi-Fi patents held by Netgear on reasonable and non-discriminatory (RAND) terms.
Netgear contends that Huawei, as part of its participation in the IEEE standards bodies defining Wi-Fi network standards, is obligated to offer RAND terms for patents related to these technologies. Instead, Huawei allegedly took an adversarial stance, initiating patent infringement cases against Netgear in China and Germany last year. This followed letters and emails from Huawei demanding Netgear cease manufacturing and selling Wi-Fi-enabled products it claimed infringed on Huawei's patents.
Standard essential patents (SEPs), crucial for implementing technical standards, are at the heart of this dispute. Netgear asserts that IEEE mandates companies disclose whether they will license their SEPs on RAND terms to manufacturers complying with standards. The company claims that Huawei, in its letters to IEEE, assured RAND licensing but later exploited its position within Wi-Fi standards to demand "excessive and discriminatory royalties" from Netgear and other companies producing network products based on these standards.
Moreover, Netgear alleges that Huawei refuses to specify the patents allegedly infringed upon, opting for a "take it or leave it" approach, demanding portfolio-wide licenses. The complaint suggests that Huawei, facing restrictions on product sales due to government sanctions, aims to boost revenue through licensing activities. Netgear claims Huawei's primary revenue stream in the U.S. is patent licensing, with the Chinese company reportedly earning $560 million in royalty revenues in 2022.
In Germany, Huawei secured a default judgment resulting in a nationwide sales ban on Netgear products in November. Netgear seeks a judgment affirming that Huawei's patent rights are subject to an implied license and is pursuing damages, alleging substantial harm caused by Huawei's actions. Huawei has refrained from commenting on the ongoing legal dispute.
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