Netgear sues Huawei in US antitrust case over patent licensing

FILE PHOTO: Advertisements for Huawei Mate 60 in Beijing

By Blake Brittain

(Reuters) - Computer networking company Netgear has sued Huawei in California federal court, claiming the Chinese tech giant broke U.S. antitrust law by refusing to license its patents on reasonable terms.

The complaint, filed late on Tuesday, also accused Huawei of fraud, racketeering and other offenses for allegedly withholding patent licenses for technology that Netgear's routers require in order to comply with international Wi-Fi networking standards.

San Jose, California-based Netgear said Huawei misuses patent-infringement lawsuits to drive up its licensing rates, forcing other companies to "engage in costly litigation and face exclusion from the market or pay Huawei's exorbitant demands."

The complaint follows infringement lawsuits filed by Huawei against Netgear in Germany and China.

Representatives for Huawei did not immediately respond to a request for comment on Wednesday. A Netgear attorney declined to comment on the lawsuit.

Standard-essential patents cover inventions that are necessary to comply with international technical standards like Bluetooth and 5G. Standards organizations require patent owners to license the patents on fair and reasonable terms.

Huawei first accused Netgear of infringing its patents in a 2020 letter, according to the lawsuit. Netgear told the court that Huawei filed infringement lawsuits against the company and demanded "significant" licensing fees before providing important background information or identifying specific relevant patents.

Huawei's "'take it or leave it' approach was intended to extract supracompetitive rates from Netgear under the mounting threat of serial lawsuits," the complaint said.

Netgear said Huawei has used the same strategy against other companies including Verizon, L3Harris and T-Mobile.

The lawsuit accused Huawei of monopolizing standard-essential technology and engaging in racketeering by using a "worldwide scheme" to "dominate global markets by unlawfully taxing successful standards" at anti-competitive rates.

Huawei reported last year that it earned $560 million from patent royalties in 2022.

(Reporting by Blake Brittain in Washington; Editing by David Bario and Bill Berkrot)