Huawei suing U.S. firm for discriminatory patent policy

Jan. 8 (UPI) -- Chinese state media confirmed Tuesday telecom equipment maker Huawei is filing a lawsuit against U.S. tech firm InterDigital, citing discrimination in patent licensing.

Beijing Youth Daily reported Tuesday the Wilmington, Del.-based company is being sued in the Intermediate People's Court of Guangzhou. The suit was filed on Wednesday.

In its statement, Huawei said InterDigital had violated its obligation to license patents essential to 3G, 4G, and 5G wireless communication requirements, on "fair, reasonable and non-discriminatory terms."

Huawei also asked the court to determined a royalty rate for wireless products for the next four years, from 2019 to 2023. InterDigital's patent licensing agreement with Huawei expired at the end of 2018.

The Huawei lawsuit comes at a sensitive time for U.S.-China trade relations. As recently as December, Trump was reportedly considering an executive order limiting U.S. carriers from using Huawei and ZTE network equipment. Canadian authorities also arrested Huawei chief financial officer Meng Wenzhou at the request of U.S. authorities in December.

The United States and China have been locked in a trade war since July 6, 2018, when Trump imposed a 25 percent tariff on $34 billion worth of Chinese imports. China responded with retaliatory tariffs on $110 billion worth of U.S. goods, but by December the two sides agreed to a 90-day moratorium on tariffs.

Trade talks are ongoing in Beijing this week, but the Trump administration is expressing optimism ahead of the outcome.

U.S. Secretary of Commerce Wilbur Ross told CNBC the two sides are likely to reach an arrangement they can both live with while avoiding an escalation.

"There's a very good chance that we will get a reasonable settlement that China can live with, that we can live with and that addresses all of the key issues," Ross said.

Ross said domestic economic concerns in China would help expedite a deal.