By Mike Freeman, The San Diego Union-Tribune
Qualcomm has settled a legal dispute over patent licensing with electronics firm Meizu, ending one legal battle in China as another, larger one is looming in South Korea.
The San Diego wireless chip designer said late Thursday that it inked a patent licensing agreement with Meizu, which Qualcomm sued in July for infringing on its wireless patents.
With the deal, Meizu agreed to pay Qualcomm royalties for use of its 3G/4G mobile patents under terms set down by China’s anti-monopoly regulator in a 2015 settlement with Qualcomm.
Qualcomm said it has dropped all legal action against Meizu.
Over the past two years, Qualcomm has signed patent licenses with the top 10 Chinese smartphone brands, including Huawei, ZTE and Xiaomi. Earlier this week, Gionee joined the list.
Meizu, an up-and-coming electronics outfit that is backed by Chinese online-shopping giant Alibaba, had been holding out. That prompted Qualcomm to file legal action in China, Germany, France and the U.S., a rarity for the San Diego firm. It usually reaches royalty deals before having to go to court.
"Qualcomm is pleased to sign this license agreement with Meizu and to help enhance Meizu's product line and generate strong growth for the company, both in China and globally," said Alex Rogers, head of Qualcomm Technology Licensing, in a statement.
While controversy over Qualcomm’s patent licensing practices has died down in China, it’s on the rise in South Korea. The Korea Fair Trade Commission fined Qualcomm $865 million this week and is calling for an overhaul of the company’s patent licensing business model.
Qualcomm blasted the regulatory ruling as seeking to unravel intellectual property practices that have been used globally for two decades. The company also claims South Korean regulators violated Qualcomm’s due process rights as laid out in U.S./South Korea free trade agreements.
The company said it would appeal to the Seoul High Court once the ruling becomes official, which is likely in four to six months.
Qualcomm shares closed Friday at $65.20, down 84 cents.
©2016 The San Diego Union-Tribune. Distributed by Tribune Content Agency, LLC.
