ZTE, the Chinese telecommunications manufacturer, has been found to be wilfully infringing seven of Maxell's US patents. ZTE has been ordered to pay Maxell $43 million for the infringement of the patents, which relate to wireless flash drives, multimedia devices, and storage and memory devices in mobile phones and tablets.
Maxell, a Japanese consumer electronics company, had been trying to negotiate a licence agreement with ZTE for its patents since 2013, which it believed would be mutually beneficial to the companies. However, ZTE resisted signing a deal with Maxell and incorporated Maxell's patented technology in 105 of its products. ZTE were thus found to have wilfully infringed Maxell's patents.
This case reflects a common occurrence in IP disputes where the parties previously had a commercial relationship that then broke down. Litigation is often a last resort, owing to its expense, but Maxell may have felt that this was the only route to bring commercial certainty for this area of its business. Negotiation can often be fruitful and less costly. However, this is difficult when one party does not want to entertain this option.
Tokyo-based Maxell owns a portfolio of 5,300 patents, many of them purchased in 2013 from the optronics division of Hitachi Ltd. The patent at issue in the trial related to image stability, video sampling, audio decoding, power management, and navigation that’s optimized for pedestrians, rather than drivers.