U.S. Launches Probe into Tech Companies from China

An official from China's Ministry of Commerce told the Global Times on August 22 that the ministry will provide technical support for technical giants Huawei and ZTE after being informed by the US International Trade Commission (USITC) they were under investigation for infringing upon US laws.

The USITC said on its website August 21 that it has voted to institute an investigation into certain wireless consumer electronics devices and components, such as electronic tablets, smartphones, e-readers, mobile hotspots, broadband wireless modems, and handheld game consoles.

Huawei, ZTE and their US subsidiaries were among the 24 companies listed by the USITC as the respondents. Other respondents include Samsung from South Korea and Nintendo from Japan.

According to USITC, three US companies filed a joint complaint on July 24, alleging violations of section 337 of the Tariff Act of 1930 in the importation into the US and sale of certain wireless consumer products that infringe a patent declared by the complainants. The complainants requested that the USITC issue an exclusion order and cease and desist orders.

An official surnamed Cheng with the Ministry of Commerce told the Global Times that the Chinese companies would jointly respond to the charges with the help of industry associations, given that most of them may not be able to deal with the probe and potential lawsuits by the US alone for financial reasons.

Cheng said the Ministry of Commerce wouldn't provide financial support to the companies, but would provide technical support.

"The Ministry of Commerce will regularly host workshops and seminars on intellectual property laws to provide more information to the Chinese enterprises who want to expand their business abroad," Cheng told the Global Times.

A spokesperson from ZTE told the Global Times that the company is aware of the investigation and will respond to the accusation actively.

Huawei declined to make a comment on the case.

Ran Ruixue, a licensed lawyer in the US and China and a partner at Junhe Law Firm in Beijing with expertise in 337 investigations, told the Global Times that most Chinese companies are not accustomed to IP lawsuits in the US.

"Chinese companies need to be more aware of the intellectual property laws both at home and abroad," said Ran.

According to Ran, 22 Chinese companies were called by USITC for investigation in 2009. Only 14 responded to the charge.

"The whole procedure could last 16 to 18 months and the legal costs may reach a few million US dollars," said Ran. "Some Chinese companies could not afford the cost and were forced to halt exports to the US market."