ZTE can't buy chips from America – but can still get sued for patent infringement in the US

America('s lawsuits) First

Chinese phone maker ZTE will have to face a patent infringement lawsuit in the US, despite its handsets being effectively barred from sale in America.

On Wednesday a Northern Texas US District Court judge tossed the Chinese company's motion to dismiss a patent infringement case filed by a Texas-based mobile software developer.

Seven Networks has alleged that ZTE's firmware borrows from seven patents it holds regarding data transfers, battery management, and notifications.

The patents are:

  • US Patent 8,811,952 "Mobile device power management in data synchronization over a mobile network with or without a trigger notification."
  • US Patent 9,247,019 "Mobile application traffic optimization."
  • US Patent 9,325,600 "Offloading application traffic to a shared communication channel for signal optimization in a wireless network for traffic utilizing proprietary and non-proprietary protocols."
  • US Patent 9,351,254 "Method for power saving in mobile devices by optimizing wakelocks."
  • US Patent 9,516,127 "Intelligent alarm manipulator and resource tracker."
  • US Patent 9,516,129 "Mobile application traffic optimization."
  • US Patent 9,553,816 "Optimizing mobile network traffic coordination across multiple applications running on a mobile device."

Seven's complaint alleges that ZTE devices, most notably its Blade smartphone, use parts of all seven patents to manage its battery life and handle notifications and data transfers. Now, Seven wants a trial to determine how much it is owed.

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ZTE had countered with a motion to dismiss, arguing that as its US headquarters are incorporated in New Jersey, the Northern Texas District Court does not have jurisdiction for a patent case.

Judge Barbara Lynn, however, was having none of that. Noting that federal law simply requires a company do business in a district to establish jurisdiction, Lynn denied ZTE's motion and ruled that the case would go ahead.

The ruling puts ZTE in the odd position of having to face a lawsuit in a place it is also blocked from doing business in. The company had to suspend operations after the US Department of Justice placed a ban on US exports to the Chinese tech vendor.

That ruling could soon be lifted but, for the time being, ZTE is not allowed to do business with US companies. It has since announced that it's halting phone production until it sorts out the issue.

Apparently, that doesn't extend to lawsuits. ®

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