InterDigital Inc (IDCC)

[GBR]

Note: Due to the case involving trade secrets, according to the relevant regulations, the judgment relates to trade secrets be blacked faded.




People's Republic of China

Guangdong Provincial Higher People's Court

Civil Judgment

( 2013 ) The Supreme Court Guangdong Min San Zhong Zi 306 No.

The appellant (plaintiff): Huawei Technologies Co., domicile: Longgang District, Shenzhen, Guangdong Province, People's Republic of China ****** .

Legal representative: Sun Yafang, the company's chairman.

Attorney: Xu Jing, King & Wood Law Firm.

Attorney: Zhao Ye, King & Wood Law Firm.

The appellant (the trial the defendant): interactive digital technology company (InterDigital Technology Corporation) , domicile: United States of America Delaware Willinton ********************* *********************************** .

Authorized Representative: Lawrence F. Shay , president of the company.

Attorney: Hu Bin, Shanghai Fonda Law Firm.

Attorney: Liao Tingting, Shanghai Fonda Law Firm.

The appellant (the trial the defendant): Interactive Digital Communications Ltd. (InterDigital Communications , . Inc.) , domicile: Prussia, Pennsylvania, United States of America Gold *************** .

Authorized Representative: Scott A. McQuilkin , president of the company.

Attorney: Yun Shao Jun, Shanghai Fonda (Shenzhen) Law Firm.

Attorney: Liao Tingting, Shanghai Fonda Law Firm.

The appellant (the trial the defendant): Interactive Digital Corporation (InterDigital , Inc..) , domicile: Prussia, Pennsylvania, United States of America Gold *************** .

Authorized Representative: Lawrence F. Shay , Executive Vice Chairman of the company's intellectual property, Chief IP Counsel.

Attorney: She Yifeng, Shanghai Fonda Law Firm.

Attorney: QI put, *********************************** , the Department of Citizenship agent.

Appellant Huawei Technologies Co., Ltd. (hereinafter referred to as Huawei) and the appellant interactive digital technology company, interactive digital communications Limited, interactive digital companies (hereinafter collectively referred to as the three interactive digital) for abuse of dominant market position dispute case, not Shenzhen City, Guangdong Province, People's Republic of China serving the Intermediate People's Court ( 2011 ) and France deep knowledge Minchuzi first 858 No. civil judgment, this Court appeal. After accepting, collegial panel composed according to the law, not a public hearing of the case. Huawei's agent Xu Jing, Zhao Ye, interactive digital technology company agent Hu Bin, Liao Tingting, attorney interactive digital communications Ltd. cloud Shao Jun, Liao Tingting, interactive digital's agent She Yifeng, Qi put the court to participate in the proceedings. The end of the case has been heard.

2011 On 12 May 6 May , Huawei brought to the trial court proceedings, said: Huawei is a leading telecom equipment providers. Interactive digital technology company (InterDigital Technology Corporation) and Interactive Digital Communication Co., Ltd. (lnterDigital Communications , LLC) are interactive digital companies (lnterDigital , INC.) , a wholly owned subsidiary. Although the three companies belonging to different civil subjects, but its actual control and the same management team, collectively referred to as interactive digital group of foreign ( InterDigital Group ), whose meticulous division of labor in the business, each typically implement a complete body of civil law aspects of the behavior of different constitute a joint action of the nature and form of the body. Over the years, interactive digital participate in various international standards of wireless communication, it directly or indirectly owns patents into international standard for wireless communication through a variety of ways, and thus form a relevant market dominance. Huawei argued that the relevant product market in this case is interactive digital is necessary patentee's patent licensing market, the relevant geographic market for the global market, the necessary patent licensing market in China and the U.S. markets. Interactive digital monopoly in the relevant market. Interactive digital ignoring its commitments upon accession standards organization for fair, reasonable and non-discriminatory principles, its patent license set unfairly high prices, similar to the conditions set counterparty discriminatory trading conditions in the permit Conditions attached unreasonable conditions, suspected of tying the licensing process by the U.S. International Trade Commission and U.S. federal court also sued Huawei and Huawei's U.S. subsidiary to reject transactions with Huawei, abused its dominant market position not only undermines the competitive order, also caused substantial damage to Huawei, Huawei has threatened to normal operations in the relevant market, causing serious damage to Huawei. Huawei therefore request the court to order: a, interactive digital immediately stop the monopoly tort, including stopping excessive pricing behavior of differential pricing behavior to stop, stop tying behavior, stop trading conditions attached unreasonable refusal behavior and stop transactions; two , interactive digital joint compensation Huawei economic loss of RMB 20 million yuan, Huawei keep informed of the evidence and further interactive digital technology company, Digital Communication Co., interactive, interactive digital companies infringing the right to be increasing the amount of compensation due to the continuation of losses; Third, the interactive digital shared reasonable litigation costs and expenses Huawei paid for the rights, including investigation costs, notary fees, legal fees.

Interactive digital co-respondent said one, interactive digital divide does not endorse Huawei advocated the relevant market. Alone interactive digital own essential patents covering the technology can not manufacture any end products. In which case the relevant geographic market should be a global market, rather than the division of Huawei, the Chinese market and the U.S. market. Second, interactive digital in the relevant market does not have a dominant market position, as well as the ability to exclude or restrict competition. Third, the interactive digital does not implement any antitrust violations, engaged restrict competition. Fourth, the interactive digital Huawei did not give any actual harm caused. In addition to the interactive digital companies respondent views, but also argued that it is neither a member of standardization organizations and the patentee, nor specific licensing contract negotiator, which is only interactive digital technology company, the parent company's interactive digital communications Ltd. ; its senior executives and interactive digital communications Ltd. confused the issue called Huawei, Huawei proof required to prove; Even with the executives at the two companies overlap, they can not deny its independent legal personality. Therefore, interactive digital company as a defendant in this case does not apply to the grid.

The trial Court found that:

First, the basic situation of the parties

Case (a) Huawei

Huawei in 1987 and incorporated in Shenzhen, its business scope includes the development, production, sales of program-controlled switches, transmission equipment, data communications equipment, broadband multimedia equipment, power supply, wireless communications equipment, microelectronics, systems integration engineering, computer and related equipment, terminal equipment and related equipment and maintenance, technical advisory services.

Huawei's 2010 annual report shows that in 2010 , Huawei company's annual R & D expenditure reached RMB 16,556 million, an increase of 24.1% , putting 51,000 plus employees (total number of companies accounted for 46% ) conduct research and development of products and solutions and set up in the United States, Germany, Sweden, Russia, India and China, 20 research institutes. As of 2010 years 12 months 31 days, Huawei has applied for Chinese patent 31,869 pieces, PCT international patent application 8892 pieces, overseas patent 8279 pieces, have been granted patents 17765 , of which overseas authorized 3060 pieces. As of 2010, the end of the year, Huawei joined the global 123 industry standard organizations such as 3GPP , IETF , ITU , OMA , NGMN , ETSI , IEEE and 3GPP2 , etc. These standards organizations to submit proposals accumulated more than 23,000 pieces. Huawei based on internal management requirements of its regional segments in China and overseas. 2009 , Huawei's global revenues (including telecommunications networks, global services, terminal revenue) was 1490.59 billion yuan. 2010 , Huawei's global revenues (including telecommunications networks, global services, terminal revenue) was 1851.76 billion yuan.

(B) the basic situation of interactive digital

Interactive digital technology company (InterDigital Technology Corporation) , interactive digital communications Ltd. (InterDigital Communications , LLC) , interactive digital companies (InterDigital , INC.) are registered in the U.S. corporate. Interactive digital technology company, interactive digital communications Ltd. is a wholly owned subsidiary of interactive digital companies. Including interactive digital technology company, interactive digital communications Limited, interactive digital companies, including affiliates of foreign collectively, " InterDigital Group "(interactive Digital Group). Case Lawrence F. Shay , president of the company's interactive digital technology, but also interactive digital communications Limited, Deputy Chairman of IP interactive digital company co-executive, chief intellectual property consultant. Meanwhile, Lawrence F. Shay case or interactive digital technology company, Digital Communication Co., interactive, interactive digital jointly authorized representatives.

Interactive digital companies in the " 2011 Annual Report "and claimed that" which through its wholly owned subsidiary, holds more than 19,500 patent portfolio consists of basic items and wireless communication technology-related patents and patents, these patents portfolio has many patents and patent applications is or may become mobile or other wireless standards (including 2G , 3G , 4G , and IEEE 802 family of standards) key. interactive digital Group ( InterDigital Group ) revenue, mainly from royalties based on the patent license agreement received. "

Second, the basic situation of the current communications technology standards

Current communications technology standards including 2G , 3G and 4G .

2G standards, including GSM and CDMA standards. GSM standard by the "European Telecommunications Standards Institute" ( ETSI ) presided over the development and implementation in Europe. CDMA standard from the " Telecommunications Industry Association "( TIA ) presided over the development and implementation in the United States. In China 2G era, China Mobile, China Unicom operators GSM network operator China Telecom CDMA network.

3G standards including WCDMA , CDMA2000 , TD - SCDMA standard. Which, WCDMA , TD - SCDMA standards set by 3GPP ( 3rd Generation Partnership Project The , Third Generation Partnership Project, the ETSI founded) to develop and publish. WCDMA standard uses region, including Europe, China. TD - SCDMA standard use areas are mainly Chinese. CDMA2000 standard by the 3GPP2 ( 3rd Generation Partnership Project2 The , Third Generation Partnership Project 2 , the TIA was founded) to develop and publish, using the region, including the United States, China. China Communications Standards Association ( CCSA ) is a 3GPP , 3GPP2 members. China Unicom, China Telecom, China Mobile, respectively, using WCDMA , CDMA2000 , TD - SCDMA standard.

4G standard mainly refers to the LTE standard (including FDD-LTE , TDD-LTE standard), LTE standards set by 3GPP developed and released for use in Europe, USA, China.

Huawei clearly communicate its production-related products must comply with wireless communication technology standard. Interactive digital recognition, which in Chinese current wireless communication technology standard ( WCDMA , CDMA2000 , TD - SCDMA all have the "standard essential patents" (hereinafter the "standard essential patents" referred to as "essential patent") standards) in.

Third, "the European Telecommunications Standards Institute" ( ETSI ) as an example of intellectual property policy introduced standardization organizations

(A) interactive digital technology company to join ETSI case

2009 years 9 months 14 days , interactive digital technology company executives, senior patent Bradey N. Ditty , the ETSI President Walter Weigel sent the message that through this letter, interactive digital technology company to ETSI submit "Intellectual Property and Information Statement Licensing Declaration "and the" Intellectual Property Information Statement Annex. "

Interactive digital technology company in the "Intellectual Property Information Statement and Licensing Declaration" in claims, according to the European Telecommunications Standards Institute ( ETSI first) intellectual property policy 4.1 of the Ordinance, and the declaration / or its affiliates now believe that "Intellectual Property Information Statement Appendix "intellectual property disclosed may become the European Telecommunications Standards Institute ( ETSI ) work items, basic intellectual standards and technical specifications, interactive digital technology company is "intellectual property owners of intellectual property information statement Appendix" disclosed . Meanwhile, the declaration will be prepared to humans or its affiliates in accordance with the European Telecommunications Standards Institute ( ETSI ) IPR policy section 6.1 of the terms and conditions required to grant an irrevocable license under the intellectual property rights. Irrevocable commitments should meet the following conditions: ask for a permit officer shall mutually agree. Interactive digital technology company in the "Intellectual Property Information Statement Appendix" claims that it has in GSM , UMTS , GERAN , ( UMTS; E-UMTS ), ( GSM; UMTS ), ( UMTS ; E-UMTS ; GERAN ), ( GSM ; UMTS ; E-UMTS ), ( UMTS ; GERAN ; E-UMTS ) a large number of essential patents and patent applications under the standard or project. Interactive digital technology company claimed essential patents and patent applications, including patents and patent applications in the United States, as well as corresponding with the family of patents and patent applications in China.

(B) "European Telecommunications Standards Institute" ( ETSI main content) intellectual property policy

"The European Telecommunications Standards Institute," the abbreviation for the " ETSI ", the main contents of the Association for Standardization intellectual property policy is:

The policy section 3.1 states: "The European Telecommunications Standards Institute Intellectual Property Policy" aimed at reducing the European Telecommunications Standards Institute members and other risks adopt Telecommunications Standards Institute standards and technical specifications of personnel, so as to avoid the standard preparation, adoption and application of the investment funds due to non-standard or technical specification with the basic intellectual property is wasted. To achieve this goal, the European Telecommunications Standards Institute ( ETSI ) IPR field of telecommunications public policy aimed at balancing the right to seek a balance between the use of standardized requirements and intellectual property owners.

The policy section 4.1 states: each member should try within reasonable limits ( especially in the development process of standards or technical specifications of their involvement in ) the basic intellectual property in a timely manner to ETSI notice. In particular: Submit a member of the technical specifications on the standards or technical proposal should be brought in good faith based on the ETSI IPR attention to any member after the proposal was adopted may become basic intellectual property.

The policy section 4.3 states: If a member of the same patent family has been timely notice to the European Telecommunications Standards Institute ( ETSI ), then under the said section 4.1 of the obligations specified will be considered by the patent families of all existing and future members of the co- fulfilled. Can provide information about other patent family members (if any) by voluntary means.

The policy section 6.1 states: When the basic intellectual property and a particular standard or technical specification related causes ETSI 's attention when, ETSI Director-General shall immediately request the owner of the intellectual property within three months of giving an irrevocable commitment in writing This commitment must be prepared according to instructions intellectual property owners a fair, reasonable and non-discriminatory conditions as stipulated in the IPR to grant irrevocable license, and at least involve the following areas: manufacturing, including manufacturing, or foundry for manufacturing in line to be Licensee design their own custom components and subsystems standards; sell, lease or otherwise dispose of equipment manufactured in this way; maintenance, use, or operate these devices;, and methods of use.

The policy section 8.1 of the relevant provisions: 8.1.1 There are a viable alternative technologies circumstances, if before the standard or technical specification was released, the rights of people notice ETSI , he can not follow the above section 6.1 subsection, provide information on standards or Technical specifications of the license, then the General Assembly should review the standards or technical specifications of requirements to ensure that there is a viable alternative technology for the standards or technical specifications, and the alternative technologies are not hindered by intellectual property rights; and to meet the European Telecommunications Standards Institute (ETSI) requirements. 8.1.2 If the General Assembly that there is no such a viable alternative technology exists, the relevant standards or technical specifications of the work should be stopped, and the ETSI Director-General shall perform the work in accordance with the following procedures, a) When a member of the rights of man, i) ETSI The Director-General shall request that member to reconsider its position. ii) If, however, the members decided to refuse to provide intellectual property (1PR) license, the member shall notify its decision ETSI Director-General and Director-General within three months of receipt requested, refused to provide intellectual property (IPR ) reasons for permission to submit a written explanation. iii) then, ETSI shall send a written explanation of the relevant summaries of their members to the General Assembly meeting of ETSI consultant for its consideration. b) When the human rights of a third party, i) ETSI Director-General shall, in any appropriate case, not to any representation in accordance with section 6.1 provides members ask for a permit documentation provides complete support, and / or require the relevant members of his good offices, find a solution to the problem. ii) If you can not find a solution by this method, ETSI Director-General shall make a written explanation related rights, and issued a final requirement, need each other first by 6.1 provides licensing provision. iii) if the right people are still rejected the Chairman, decided to refuse to provide intellectual property (IPR) license, or receive ETSI General requirements within three months of failure to reply to the letter, the ETSI Director General shall explain the rights of people, and related Summary Minutes of the General Assembly ( if any ) is sent to ETSI consultant for its consideration.

The Policy Section 12 states: The policy applies to French law. However, any member of the policy shall not name, in violation of national laws and regulations, or to engage in violation of applicable laws and regulations of their supranational activities, and such laws and regulations do not allow the agreement derogation effect.

The policy under section 15.1 and section 15.9 of the interpretation, ETSI 's members include members of the related parties.

Fourth, interactive digital claimed essential patents in China in the field of telecommunications usage

Interactive digital technology company in the ETSI essential patent claims, the corresponding field of technical standards of China Telecom mobile terminals and infrastructure is also essential patents in China. In the field of mobile terminals, Huawei, by way of example to prove the following facts:

Interactive digital technology company in ETSI claimed that it has TS25.212 American "standard techniques under IMPLICIT METHOD AND SYSTEM FOR USER EQUIPMENT IDENTIFICATION "essential patents, while the patent patent families in China for ZL02809881.1 number of patents. After landing in China Huawei Intellectual Property Office website, ZL02809881.1 No. patent entitled "Method and system for implicit user equipment identification," patent human interactive digital technology company. Chinese Ministry of Information Industry 2007 Year 5 May 16 release of "People's Republic of China communication industry standard" display, 2GHz WCDMA digital cellular mobile communication network Uu interface physical layer technology requires 3GPP R99 TS25.212 standard technology for 2GHz WCDMA digital cellular mobile communication network Uu interface physical layer part of the development, production, and purchasing the application of the standard references.

Interactive digital technology company in ETSI claimed that it has TS25.212 American "standard techniques under IMPLICIT METHOD AND SYSTEM FOR USER EQUIPMENT IDENTIFICATION "essential patents, while the patent patent families in China for ZL02234564.7 number of patents. After landing in China Huawei Intellectual Property Office website, ZL02234564.7 No. patent entitled "A base station and user equipment," patent human interactive digital technology company. Chinese Ministry of Information Industry 2007 Year 5 May 16 release of "People's Republic of China communication industry standard" display, 2GHz WCDMA digital cellular mobile communication network Uu interface physical layer technology requires 3GPP R99TS25.212 standard technology for 2GHz WCDMA digital cellular mobile communication network Uu interface physical layer part development, production, and purchasing the application of the standard references.

Interactive digital technology company in ETSI claimed that it has TS25.211 U.S. "under the standard technology CDMA COMMUNICATION SYSTEM USING AN ARRAY ANTENNA "essential patents, while the patent patent families in China for ZL00812637.2 number of patents. Chinese Ministry of Information Industry 2007 Year 5 May 16 release of "People's Republic of China communication industry standard" display, 2GHz WCDMA digital cellular mobile communication network Uu interface physical layer technology requires 3GPP R99 TS25.211 standard technology for 2GHz WCDMA digital cellular mobile communication network Uu interface physical layer part of the development, production, and purchasing the application of the standard references.

In the field of telecommunications infrastructure, Huawei prove the following facts: China Telecom 2010 technical standards promulgated regulations of the specification is to ensure the normal operation of China Telecom mobile terminal, and provide the basis for development and production of the terminal, this specification applies in the telecommunications business in China CDMA network used to support the CDMA standard mobile terminals, including 3GPP2 cdma2000 specification by including provisions constitute specifications referenced in this specification. "China Telecom CDMA1X wireless network equipment technical specifications "in reference to 3GPP2 technical standards and other relevant international standardization organizations and the Ministry of Information Industry issued on the basis of the actual situation and the latest technological developments in the formulation of the existing network of China Telecom, the technical content recommendations on international and domestic equivalent.

China Unicom 2010 technical standards promulgated regulations, the standards is to ensure the China Unicom WCDMA digital mobile communication network to normal operation and to facilitate operations management, and provide the basis for the development and production of mobile stations, mainly based on technical indicators ISO 3GPP appropriate industry standards and national regulations, and in accordance with the actual needs of China Unicom commercial written, this standard is China Unicom's WCDMA digital cellular mobile communication network part of the mobile station technical specifications, this standard provides China Unicom's WCDMA mobile station basic technical requirements .

China Mobile Communications Group 2009 technical standards promulgated regulations, the standard TD-SCDMA mobile terminal technology elements in the technical aspects, the technical characteristics of the requirement to ensure that TD-SCDMA terminal to meet the needs of network operators and business development. This specification is in reference to 3GPP standards and other international organizations related to standards, combined with the actual needs of China Mobile's business case preparation, this standard applies to 2GHz TD-SCDMA digital cellular mobile communication network terminal equipment for HSDPA related requirements, support single-carrier HSDPA feature terminal is mandatory requirement.

The basic situation five parties patent licensing negotiations

From * years * months beginning, Huawei and interactive digital communications Limited, involved in patent licensing in Shenzhen City in Guangdong Province, China carried out several rounds of negotiations.

(A) in the case of negotiations interactive digital claiming their right to essential patents

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(B) offer interactive digital patent license conditions issued by circumstances to Huawei

Patent license to offer interactive digital Huawei issued primarily × times, specific case:

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Six patent transactions, such as interactive digital with Apple reached

(A) with Intel's proprietary interactive digital transactions

Interactive digital companies in the financial information disclosed in the U.S. Securities and Exchange Commission show that in 2012 was 6 months 18 days, interactive digital subsidiary of the Company has signed a definitive agreement to 3.75 billion sale price to Intel about 1,700 patents and patent applications, including approximately 160 U.S. patents have been approved and about 40 U.S. patent applications, primarily related to the agreement with 3G , LTE and 802.11 technology-related patents.

(B) a new interactive digital shoreline with Beijing Mobile Communication Technology Ltd. patent transactions

Interactive digital companies in the financial information disclosed in the U.S. Securities and Exchange Commission show that in 2012 in the second quarter, the company's interactive digital a subsidiary has signed a definitive agreement for 900 million dollars to the price of new shoreline Beijing Mobile Communication Technology Ltd. sold some patents and patent applications. 2012 At the end of the second quarter of this amount has been recorded as revenue. In addition, the company confirmed with interactive digital 2012 second quarter related to the sale of patent costs 70 million dollars.

Interactive digital company in 2012 in the second quarter of 6240 million dollars in patent licensing fees and of 2012 compared to the first quarter declined by 620 million dollars, or 9 percent , reasons for the decline is that the two devices permitted by the licensee shipments decreased, resulting in a decrease of the license fee of 630 million dollars.

2012 years 7 months 21 days , Sina reported that Beijing Mobile Communication Technology Co., Ltd. new shoreline buy hundreds of domestic and foreign patents interactive digital companies from the United States, these patents involve WCDMA and LTE standards essential patents.

(C) interactive digital transactions with Apple patent

Interactive digital companies in the financial reports with the U.S. Securities and Exchange Commission show that in 2007 years 9 months 6 days, interactive digital technology company, interactive digital companies and intellectual property licensing and rapid Communications Co. LTD, signed with Apple, Inc. apply a worldwide, non-transferable, non-exclusive, fixed license fee patent license agreement. According to the 2007 years 6 months 29 days in force for a period of 7 years of the license agreement, the interactive digital patent portfolio license to Apple, the patent portfolio covering the current iphone and some of the future of mobile phone technology. Interactive digital update shortly after release 2007 third quarter financial guidelines.

2007 years 9 months 7 days , interactive digital companies updated financial reports with the U.S. Securities and Exchange Commission in its 2007 third quarter financial guidance, the guide said, the company's interactive digital patent licensing and technology solutions revenue should be about sustainability 55.5 one million U.S. dollars to 56.5 between one million U.S. dollars, while the financial guidelines previously published in its ongoing revenue of about 53.5 one million U.S. dollars to 54.5 between one million U.S. dollars. In addition, the company is expected to receive interactive digital twenty million U.S. dollars in the near future, the twenty million U.S. dollars with the recent signing of the relevant license agreement. Meanwhile, the guide said, is a major promoter of interactive digital global wireless standards and holds a strong portfolio of patented technologies, interactive digital portfolio license to these patents 2G , 2.5G , 3G and 802 products worldwide manufacturers.

2007 years 9 months 11 days , Sina reported that "Apple 56 million dollars to buy 3G patent iPhone will support HSDPA ", the main content, interactive digital Apple and the United States signed a 3G patent licensing agreement, this seven-year agreement worth 56 million dollars, has been listed on the cover iPhone and the upcoming release of 3G version of the iPhone .

(D) interactive digital with Samsung Electronics Co. and LG Electronics patent transactions

Interactive digital companies in the " 2010 Annual Report in the "claims, customer revenue over 2010 total revenue by 10% . Samsung Electronics Co., Ltd. ("Samsung") and LG Electronics (" LG "), respectively, about the company's 2010 total revenue of 26% and 15% . 2009 , the Company and its subsidiaries with Samsung (including Samsung Electronics America, Inc.) signed a patent license agreement (" 2009 Samsung PLA "). According to " 2009 Samsung PLA ", until 2012 , according to (in for 2010 needs to be paid to become) TDMA2G sales infrastructure standards for the design of single-mode operation of the terminal equipment, the company granted Samsung a non-exclusive, worldwide fixed royalty license; against based on 3G terminal sales designed to run equipment and infrastructure standards, the company granted Samsung a non-exclusive, worldwide license royalties fixed. " In 2009 Samsung PLA "to replace the two sides in 2008 was 11 months, signed documents bundled Terms and terminate the Company and Samsung in 1996 year patent license agreement. " 2009 Samsung PLA "also ended all sides of ongoing litigation and arbitration proceedings. Accordance with the " 2009 Samsung PLA ", Samsung has been paid in installments interactive digital company 400 million dollars, more than 18 points in four equal installments payable within months. Samsung in 2009 was paid for each of the first two payments 1 billion. " In 2009 Samsung PLA "related income in the term of the agreement in accordance with the straight-line method of accounting. 2010 period, the company confirmed that " 2009 Samsung PLA "related revenue 10270 million dollars.

The Company and LG signed a worldwide, non-exclusive, royalty-bearing patent license agreement for convenience, covers (?) based on 2G and based on 2.5G TDMA and 3G is designed to run standard terminal equipment sales; (?) According to CDMA 2000 sales designed to run extension technology infrastructure technology and starting up a limited amount. According to the terms of the patent license agreement, LG respectively in 2006 , 2007 and 2008, the first quarter of the Company to pay 95 million dollars. 2010 end of the year, the agreement has expired, the effective period of LG is given paid license within the scope of the patent license sales singlemode GSM / GPRS / EDGE terminal equipment, all other products under this Agreement is not allowed. From the beginning to the agreement of 2010 was 12 months 31 days, the company in accordance with the agreements related to the average age income credited. 2010 period, the company confirmed that the LG patent license agreement related revenue account 5750 million dollars.

Interactive digital companies in the " 2011 Annual Report "and claimed that in 2009 , we entered into a patent license agreement (with the Samsung 2009 Samsung agreement) will be covered by Samsung's affiliates account. According to 2009 Samsung agreement, we granted a non-exclusive Samsung, pay a fixed license fee for the license, which involves a single-mode terminal unit sales and infrastructure, these single-mode terminal units and infrastructure aimed at a worldwide basis TDMA2G standard operation, the license in 2010, settled in; Meanwhile, Samsung granted a non-exclusive, worldwide, license to pay a fixed license, which involves closing in 2012 annual sales of terminal units and infrastructure, these terminals and Infrastructure is designed based on 3G standard operation. According to 2009 Samsung agreement, Samsung in the 18 months to four times within interactive digital ( InterDigital paid) 400 billion (the same amount each time). Samsung in 2009, paid a four-stroke-year 1 billion dollars in the first two pens. We in 2010 in one month and in 2010 was 7 received the third and fourth pen pen dollar payment month. We in 2009 Samsung straight-line basis over the life of the agreement and the agreement relating to the processing of income. 2011 , we confirm that the 2009 Agreement on Samsung 1.027 billion in revenue.

(E) interactive digital and RIM patent transactions

Interactive digital companies in the " 2011 Annual Report in the "claim, in 2003 , we and RIM aims basis for GSM / GPRS / EDGE standard operation of the terminal unit entered into a non-exclusive, to facilitate worldwide basis, and pay a fee of the license agreement. We in the 2007 revision of the agreement, adding aimed basis TIA/EIA-95 and 3G standard operating terminal unit. Under the terms of the agreement, RIM should be directed to RIM for each licensed product sold by or affiliated companies to pay royalties. RIM agreement will be 2012 years 12 months 31 expiration date. When reported sales of licensed products, we recognize revenue related to this agreement. 2011 , we confirm receipt of the RIM patent license agreement relating to income 4290 $ 30 million.

(Six) interactive digital and HTC patent transactions

Interactive digital companies in the " 2011 Annual Report in the "claim, in 2003 , we and HTC entered into a non-exclusive, to facilitate worldwide basis, the payment of royalties license agreement, which involves aimed basis 2G and 3G terminal unit sales of standard operation and infrastructure. Under the terms of the agreement, HTC should be directed to HTC or its affiliates for each licensed product sold by the company to pay royalties. HTC agreement expires next agreement will be the last of the full term of the patent license. When sales of licensed products based on licensed products, reporting, we recognized revenue related to this agreement. 2011 , we confirm receipt and HTC patent license agreement relating to income 3380 $ 30 million.

Seven essential patents in the field of wireless communications transactions

Evidence (a) interactive digital display field of wireless communications filed patent transactions necessary

Interactive digital news and information website submitted the following report: Snapshots mobile website ( www.22SHOP.COM ) posted a display upload date 2009 years 5 months 4 days "Qualcomm granted to Shenzhen Miki company CDMA and TD patent license "report, the main content, Qualcomm granted to Shenzhen Miki Communication Technology Co., CDMA and TD-SCDMA standard subscriber unit and module / modem card for a worldwide patent license.

ZDNet website ( tech.163.COM ) posted a display upload date 2008 years 8 months 6 "Qualcomm has granted Huaqin day CDMA2000 patent license "reported that the main content, Qualcomm granted Communication Technology Co., Shanghai Hua Qin worldwide patent license to the company's patent portfolio, which permitted the development, production and sale of CDMA2000 subscriber units worldwide patent license with the modem card.

Bit Network ( ChinaByte.COM ) posted a display upload date 2008 years 12 months 23 "Sky patent deal with Qualcomm force date 3G terminal market "report, the main content, Qualcomm granted Tianyu company CDMA2000 and WCDMA subscriber unit and modem card worldwide patent license.

Bubble website ( pcpop.com ) posted a display upload date is 2008 years 9 months 30 "Day of the Nokia / Nokia Siemens for Huawei patent license "reported that the main content for Nokia / Nokia Siemens and Huawei and its subsidiaries on standards necessary patents reached a patent license agreement, which covers the right to use global standards essential patents of all parties, including mobile terminals, network infrastructure and services used to GSM , WCDMA , CDMA2000 , optical network, data communications and WiMAX patents.

And information site ( tech.hexun.com ) posted a display upload date is 2009 years 5 months 14 "Qualcomm grant date Telit commercial WCDMA patents worldwide license "reported that the main content, and wireless communications specialist Qualcomm has entered into a commercial WCDMA modem card license agreement, in accordance with the agreement, Qualcomm will grant Telit Company About Qualcomm CDMA patents worldwide license agreement.

For interactive digital submit such evidence to prove, in the field of wireless communications worldwide license essential patents are more common trading patterns.

Evidence (two) interactive digital display cases filed merger Google bought Motorola patent essential trading case

2012 years 2 months 13 days , the European Commission pursuant to Rule 139/2004, Council Regulation No. 6 ( 1 ) ( b on Google Provisions) of / Motorola made ??the decision to move the case of the Commission, the main content of the judgment are:

According to 2011 years 8 months 15 days to sign the merger agreement and plan of merger Google will buy Motorola Mobility sole control of the whole through equity as part of the deal, Google will acquire Motorola Mobility's entire patent file. Motorola Mobility has a lot of standard essential patents, including LTE , 3G , 2G , WCDMA-UMTS , GSM-GPRS , CDMA , WiFi , WiMAX , MPEG-4 and other patents.

2012 years 2 months 28 days , Google on its desire to acquire Motorola Mobility regarding standard essential patents to multiple standard setting organizations sent a letter, Google said in the letter will respect the existing Motorola fair, reasonable and non-discriminatory terms to license their essential patents commitment, Google Motorola Mobility has been prepared to admit up to each terminal device net selling price of 2.25% of the standard rate to license its essential patents, licenses and the license rates may offset by a cross or other consideration, Google says This rate will be respected in the future.

Google said it would be within a reasonable time with potential licensees to negotiate in good faith, at this time, neither side can initiate legal proceedings against the other essential patents, and patents based on their need to seek injunctive relief. Google argued that the essential patents of Motorola Mobility has, under the following conditions, even after the negotiations in good faith fails, a potential licensee will also have the opportunity to stop the injunctive relief sought: ( a ) to certain conditions, the proposed license Motorola Mobility The essential patents, and ( b ) to provide security for the payment of license fees. It should be stressed at the outset that Motorola Mobility has received its essential patents related to the use of the net selling price of the end product of 2.25% rate of long-term practice. Motorola mobile public statement which is a FRAND rate. The European Commission believes that if Google began to seek after the completion of the acquisition is higher than the 2.25% rate of license, possible need for the acquisition questioned.

The European Commission believes that cross-licensing is not anti-competitive Generally speaking, in addition, in the field of mobile communication, cross-licensing is a common and accepted practice, therefore, Google may have an incentive to participate in cross-licensing essential patents based on Motorola Mobility and competition law is not a problem to be considered. In addition, the need to seek and implement a ban on patents on the basis of its own considerations, nor is anti-competitive, especially, according to the specific conditions necessary for the patentee reluctant to goodwill on FRAND terms of potential licensees to seek negotiations ban may be legitimate.

Eight, STRATEGY ANALYTICS research institutions to analyze the case of the mobile phone market

Because interactive digital trial court did not submit to its authority to Apple, Samsung patent licensing contracts and other evidence materials, Huawei submitted to the trial court STRATEGY ANALYTICS analysis research institutions worldwide mobile phone market.

STRATEGY ANALYTICS research organization said on its website, the agency is a global organization, analysts in Europe, Asia and the Americas, helping the world 500 strong companies to develop a successful course in complex technology market, due to the global presence of the institution, its understanding of the regional markets can be highly controlled and perfect data integrity for basic research and management consulting.

STRATEGY ANALYTICS research institutions on the global mobile phone market is analyzed. The agency under the Global Mobile Suppliers shipments, market share, net sales, operating income perspective, analysis of Nokia, Samsung, Apple, LG Electronics, RIM , Motorola, HTC , Sony, the world's largest mobile phone supplier in several cases Huawei was not included in the analysis report. According to the analysis report, Samsung's 2009 to 2012 in the total mobile phone sales to 161,067 million U.S. dollars, 2007 to 2012 total sales of mobile phones to 205,828 one million U.S. dollars; Apple in 2007 to 2012 in the total mobile phone sales to 191 692 $ one million ; RIM company in 2011 total sales of mobile phones to 14,840 one million U.S. dollars; HTC company in 2011 total sales of mobile phones to 15,103 million dollars.

Interactive digital denied STRATEGY ANALYTICS research institutions authenticity on the global mobile phone market analysis report, the reason for the order in 2009 as an example, based on interactive digital Apple filed " 2010 Annual Report "shows that Apple's 2009 annual IPhone mobile phones and related products and services The net sales of 13,033 million U.S. dollars, and the said STRATEGY ANALYTICS report research institutions believe that Apple's 2009 net sales of mobile phones to 14,846 million U.S. dollars, the two differ. For interactive digital view of the denial, Huawei believes, STRATEGY ANALYTICS global mobile phone market analysis report is based on research institutes calendar year (each year 1 month 1 day to 12 months 31 days) to calculate, and Apple's annual financial report US-listed companies based on fiscal year (from the previous year's nine months to a year for the next nine months) to calculate, the above data to calculate the difference is due to differences between the financial year resulted. From interactive digital Apple filed " 2010 Annual Report "shows that it is more than one year nine months into the following year 9 months as calculated on the basis of the financial year.

Nine, interactive digital Court in Delaware, the United States International Trade Commission sued Huawei necessary condition for patent infringement

2011 years 7 months 26 days , interactive digital technology company, interactive digital communications Ltd. and patent licensing company ( IPR Licensing Inc.., ) The Huawei sued to Delaware court, said Huawei manufacture, use, sale, imports of products specifically designed for 3G WCDMA or CDMA2000 system, allegedly infringed seven patents in the United States enjoyed (namely U.S. Patent No. 7,349,540 , 7,502,406 , 7,536,013 , 7,616,070 , 7,706,332 , 7,706,830 , 7,970,127 ), requesting Delaware Huawei's state court ordered the accused to stop infringement.

On the same day, interactive digital communications Limited, interactive digital technology company, IPR licensing company to the U.S. International Trade Commission ( ITC ) sued Huawei, Huawei America, Nokia, ZTE Corporation, ZTE (USA) Inc. infringed its essential patents, asked the U.S. International Trade Commission and other related products for Huawei started 337 investigations and issued a total ban on the import orders, pause, and stop selling orders.

X. Other interactive digital content recorded in the past two years the annual report

(A) interactive digital company " 2010 Annual Report other content "records of

Interactive digital company " 2010 Annual Report "also recorded the following:

As of 2010, the end of the year, interactive digital holds 18,500 patents and pending patent applications. And declared, "We may not be a household name, but the world every cellular wireless communications devices are using our technology."

Provide advanced interactive digital technology to make wireless communication possible. Since 1972, since its establishment, has designed and developed a number of new technologies for digital cellular and wireless products and networks, including 2G , 3G , 4G and IEEE802 -related products and networks. The company is a major contributor to the wireless communications industry, intellectual property rights, the current through the basic wireless communication technology held by a wholly owned subsidiary of the relevant patent portfolio, U.S. Patent approximately 1,300 items, non-US patents approximately 7,500 items. In the company's patent portfolio, there are many patents and patent applications, we believe have become or may become cellular and other wireless standards (including 2G , 3G , 4G and IEEE802 series of standards) necessary patents or patent applications. We believe that other companies (including all the major mobile handset manufacturers) to manufacture, use or sale of products based on these standards require the Company to obtain the necessary patent license, and will require the Company to obtain the necessary patent-pending patent application license . Using our patent products include: mobile devices, such as mobile phones, tablet computers, laptops and wireless personal digital assistants; wireless infrastructure equipment, such as base stations; wireless communications equipment components, such as dongles and wireless equipment modules. In 2010 , the company's revenue recognition from all over the world for more than half sold all 3G mobile devices, including the major mobile communications companies (such as Apple, HTC, LG Electronics, RIM and Samsung Electronics) the sale of mobile devices. Most of the company's revenue from the company's patent portfolio patent license. Companies and in wireless communications equipment supply company to contact and seeks to establish a licensing agreement with them. Company to manufacture, import, use or sale or intends to manufacture, import, use or sell the patented invention uses a combination of products covered by the company to provide a non-exclusive patent license. The company has entered into with companies around the world non-exclusive, non-transferable (with limited exceptions) patent license agreement.

Maintaining substantial involvement in major international standardization bodies, the company will continue to pursue its ongoing wireless standard definition work and continue the company's invention into these standards. We believe that participation in technology development which allow the company has great visibility and allows companies in technology development at the forefront. Furthermore, participation in major international industry standards and promoting the use of the company's technology, and accelerate time to market for use of our intellectual property products.

Digital cellular standard, the performance of various air interface defined in the SDOs the range evolving. 3G service launched to enable operators to take advantage of additional radio spectrum allocation, and by using more than 2.5G data transmission speeds, providing its customers with additional applications. 2000 , the operators started offering 3G services. 3G standard five specifications under (generally regarded as the ITU " IMT-2000 "Recommended specifications) include the following CDMA technology in the form of: FDD and TDD (collectively referred to as the industry WCDMA ) and multi-channel CDMA (based on cdma2000 technology , such as EV-DO , etc.). In addition, TD-SCDMA, one kind of TDD technology Chinese edition variants, has been included in the standard specification.

As the company's patent portfolio is unique in the customer relationship, the company does not compete in the traditional sense with other patents altruistic, others instead of themselves do not enjoy patent inventions and patent portfolio in the company covered in the same rights. Any equipment or device components containing intellectual property, the manufacturer may need to obtain multiple licenses of intellectual property rights. When applying for the patent portfolio license, with other patents Liren may face practical limits on royalty share to compete. We believe that the manufacture and sale of 2G , 3G and the recent 4G products need to be licensed by the Company of many patents. However, many companies also claim that they hold 2G , 3G and 4G essential patents. In seeking multi-use patent for the same product time-consuming, the manufacturer may claim has been difficult to meet the financial requirements of each patent Liren. In the past, some manufacturers on a voluntary basis jointly seek antitrust immunity. In addition, some manufacturers have been trying to limit the necessary patents 3G license fees total or rate.

The company executives were appointed to these offices in office until their successors are duly elected and qualified proof. All executives of the company also has a wholly owned subsidiary of interactive digital communications Ltd. (since 2007 in July the same position since the founding of months).

Interactive digital companies in the " 2010 Annual Report "also pointed out that interactive digital communications Limited, interactive digital technology company is a wholly owned subsidiary.

(B) interactive digital company " 2011 Annual Report other content "records of

Interactive digital company " 2011 Annual Report "also recorded other content:

For decades, interactive digital has developed fundamental wireless technologies that are the core of the world's mobile devices, networks and services. Interactive digital 2011 total revenue of 301.742 million dollars, 2010 total revenue of 394.545 million dollars, 2009 total revenue of 297.404 million dollars. To promote our technology can be utilized worldwide, we are actively involved in standards bodies and standards bodies to contribute to the promotion of these standards bodies to develop the design and functionality of each generation wireless technology. Interactive digital participation in global standards organizations, which our success has played an important role. We believe that our participation makes us more clearly for technology development, so that we are always at the forefront of technological development. This also allows the opportunity to participate in interactive digital standards bodies to share our solutions, we also continue to address the most complex challenges in the wireless industry today faces. And, after adding standards organization, our technology for a more widespread use, which will help drive our economic success.

We are a major contributor to the wireless communications industry, intellectual property rights, as of 2011 was 12 months 31 days, through our wholly-owned subsidiary owned by more than 19,500 items and basic wireless communication technology-related patents and patent applications patent portfolio composed. We believe that our patent portfolio has many patents and patent applications are or may become mobile or other wireless standards (including 2G , 3G , 4G and IEEE802 series of standards) key. 2011 , all of our sales from all over the world 3G mobile devices have made ??half the license fee revenue , including the world's leading mobile communications company ( like Apple ) , HTC Corporation ( HTC ), Mobile Research Limited ( RIM ) and Samsung Electronics Co., Ltd. products.

Currently, our revenues primarily from royalties based on our patent license agreement received. 2011 , our revenue was 3.017 billion U.S. dollars, and in 2010 was reduced compared to 64.1 million dollars, or 24 percent , and net income of 89.5 million dollars, and in 2010 was reduced compared to 64.1 million dollars, or 42 percent . Some of our patent license is "a one-time payment", the agreed conditions without additional license fees based on sales based on these "one-time payment" agreed license conditions may include certain period of time, a certain type of product, a certain number of sales under the product, some patents or patent claims, permission for a given country (or a combination of these conditions). After the payment of license fees or pay a fixed amount in licensing fees over a period deemed paid by Licensee. In addition to prior period amounts allocated to sales, we deal with a fixed amount of straight-line revenue.

We believe that the broad user base, ongoing technological developments and the general public on the Internet, email and other digital media growing dependence, both for our advanced wireless products and services lay the foundation for continued growth in sales in the next five years. 3G and 4G handset shipments in 2011 was accounted for approximately 48% of the market share. And in accordance with THS iSuppli 's opinion, is expected to 2015 will grow to account for about 73% of the market share.

Because of patent exclusivity, we do not compete in the traditional sense of customer relationship with other patent holders. Other inventions and patent holder of technology in our patent portfolio contains not enjoy the same rights. Intellectual property contained in any device, manufacturers need to obtain permission from the holder of a number of intellectual property rights at. When the external licensing our patent portfolio, we obtained permission from other patent holders place, in foreign licensing of our patent portfolio, we hold people to compete with other patent royalties. For the production and sale of 2G , 3G and 4G products, we need to obtain a variety of patent licensing, but many companies also claim that they have a key 2G , 3G and 4G patents. Many have advocated the use of time-consuming for the same product, the manufacturer can claim that each patent holder to meet financial requirements, with difficulty. In addition, some manufacturers also key patents in favor of limiting the total license fee or rate. We face competition from wireless devices and semiconductor manufacturing companies and operators within the development team. They can be provided in the development of our standard solutions competing technologies. Due to the presence of competing solutions, so our solutions may not be adopted standards. In addition, in-licensing of our patent portfolio, we may compete with other companies, many of which the company claims will hold key patents to gain a place in the fee.

2G and 3G technology will be 4G replace or other technologies, it is necessary to extend or modify some of the existing license agreement to cover later issued patent, which will affect our revenue. While we 4G has been made ??and non-mobile technologies and patent-pending combination of expanding, but we patent portfolio licensing program in these areas is not mature enough, but maybe not like our 2G and 3G licensing program, as with be equally successful income. Our foreign license 4G when the product may not like us permission 2G and 3G as successful products. We believe that the use of our patented inventions in certain products (including mobile phones) there are more and more downward pressure on prices, and some of our royalty rates and cell phone pricing is also interrelated. In addition, many other companies also advocates a key patent holder mobile market products. Increasing price pressure plus many in the pursuit of its mobile technology patent holder royalties, rates may lead to the use of patented inventions we receive fall.

Challenges in the defense and implementation of our patents exist may cause our revenues and cash flow decline. We can not guarantee that our patent validity and enforceability will continue to maintain, we can not guarantee that our patents will be determined to be applicable to any particular product or standard. Third-party lawsuits ruling, increasingly stringent review of antitrust regulators and other factors will affect our patent applications, foreign licensing and enforcement strategies and will increase our operating costs.

2011 years 7 months 26 days , the company's interactive digital interactive digital wholly owned subsidiary of Communications Co., interactive digital technology company and IRP licensing company (in this narrative, collectively referred to as the "Company", " InterDigital "," us "or "our") against Nokia Corporation and Nokia Inc.. (collectively, "Nokia"), Huawei FutureWei Technologies, Inc., (to FutureWei Technologies, Inc (USA) in the name of business) (collectively referred to as "Huawei"), ZTE Co., Ltd. and ZTE (USA) Inc.. (collectively, "ZTE" and together with Nokia and Huawei, collectively, the "respondent"), the U.S. International Trade Commission complaint alleging that the Respondent engaged in unfair trade activities would infringe InterDigital seven U.S. patents (referred to as "patent claim has been infringed") certain 3G wireless devices (including WCDMA and cdma2000 @ function mobile phones, USB flash drive components, tablet computers and these devices) imported or offered for import into the United States, and import into the United States after the sale. The complaint also extends to certain WCDMA and cdma2000 contain WiFi device features. InterDigital in his complaint to the U.S. International Trade Commission, the request to issue an exclusion order prohibiting the import of the respondent or on behalf of any infringement of the respondent imported 3G wireless devices (and components) into the United States, but also issued a ban request order prohibiting the importation into the United States has continued to sell the infringing products. 2011 years 8 months 31 days, the U.S. International Trade Commission launched a formal investigation against the respondent. 2011 years 9 months 29 days, Nokia filed a motion to terminate the investigation requested the U.S. International Trade Commission, and argues that, InterDigital claims that the European Telecommunications Standards Institute ( ETSI commitment) in foreign license key patents on reasonable and non-discriminatory terms to comply with fair This led to InterDigital gave up the right to seek relief in the exclusive U.S. International Trade Commission. 2011 years 10 months 19 days, InterDigital oppose this motion for termination.

In InterDigital U.S. International Trade Commission filed a complaint in this case the same day, we filed against the respondent to the U.S. District Court for the District of Delaware is a parallel lawsuit alleging infringement of the complaint with the U.S. International Trade Commission in the same case, "claims infringement patent. " In the prosecution of the Delaware District Court, the request to issue a permanent injunction and claim damages and aggravated intentional tort damages, and the payment of costs and reasonable attorneys' fees.

2011 years 11 months 30 days , Huawei submitted a motion requesting the partial lifting of suspension of the motion, ruling InterDigital intent to violate some fair and reasonable and non-discriminatory counterclaims raised grounds, while the rest of the cases are still suspended. 2011 years 12 months 16 days, ZTE (USA) Inc.. (ZTE USA) submitted a petition, joined Huawei's motion, and the motion requesting the partial lifting of suspension, ZTE USA to make a fair and reasonable and non-discriminatory on grounds similar to counterclaim ruling. 2011 years 12 months 19 days, InterDigital filed a reply, respond Huawei's motion, and, where appropriate, request aborted Huawei and ZTE counterclaim by the United States. 2011 years 12 months 30 days, Huawei defense was filed in support of its request for the partial lifting of suspension motion. 2012 In a January 9 date, InterDigital submitted a statement of defense to support its discretion, suspend Huawei and ZTE USA counterclaims request.

XI, Huawei asked for damages based interactive digital

Huawei believes that due to the interactive digital necessary in the United States filed a patent infringement complaint against Huawei, Huawei is the respondent to pay attorney's fees in the United States × × × × × × × × . Meanwhile, Huawei party to pay notary fees in this case × × × × × × × . In addition, due to the interactive digital monopolistic behavior, resulting in the loss of Huawei in the market structure and market competition order aspects are bound to exist, because it is difficult to quantify, so Huawei can not submit evidence in this regard, but the loss is an objective reality. Huawei's attorney fees in this case did not submit the documents.

Huawei recognized interactive digital documents on the financial figures submitted by the sum total of × × × × × × × × × , but the formation of the evidence in the United States, only a copy of the bill, and no notarial certification procedures related to foreign evidence Therefore, the payment of such claims in the U.S. attorney's fees Huawei alleged, are not recognized.

The trial court held that the case is a monopoly disputes. Huawei claims the basis for the lawsuit, Huawei believes interactive digital abuse of market dominance, against the legitimate interests of Huawei, constitute a monopoly tort requires interactive digital bear to stop infringement, liability for damages. The two sides dispute the focus of this case is: How involved in defining the scope of the relevant market? Interactive digital in the marketplace is a dominant market position? Huawei's alleged abuse of market dominance interactive digital implementation of tort whether to set up a monopoly? If Huawei's alleged infringement was established, the interactive digital should bear the corresponding legal responsibility how?

I, on the scope of the definition of the relevant market in this case the problem

Huawei claims the relevant market in this case is in the range: the relevant geographic market is the Chinese market and the U.S. market, the relevant product market is interactive digital in 3G wireless communications technology in WCDMA , CDMA2000 , TD - SCDMA standards essential patent licensing market each constituent collection beam, in other words, interactive digital China and the United States in 3G wireless communication technology standards ( WCDMA , CDMA2000 , TD - SCDMA license essential patents each market) in, constitutes a separate relevant market, in this case the relevant market is that a separate set of relevant market bundle.

Huawei define the scope of the relevant market, the trial court recognized, for the following reasons:

Ascertain the facts in this case show that Huawei and interactive digital technology companies are the European Telecommunications Standards Institute ( ETSI members), interactive digital technology company to ETSI claiming essential patents and patent applications, including patents and patent applications in the United States , and corresponding patents and patent applications with the family rights in China. Huawei prove by example, interactive digital technology company in ETSI essential patent claims, the corresponding field of technical standards of China Telecom mobile terminals and infrastructure is also essential patents in China. × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × Meanwhile, in the present case the trial cross-examination, Huawei for interactive digital in China and the United States enjoy 3G standard essential patents no objection. In view of this, the trial court found the law, interactive digital owners in the U.S. and China 3G standard essential patents. Interactive digital patents necessary for China license, shall be subject to adjustment of China's anti-monopoly law, but, due to the company's production activities are mainly Huawei in Shenzhen, China, and its products are exported to the United States, the interactive digital for Huawei on 3G standards necessary patent licensing behavior might be market-competitive behavior Huawei produce export products excluded, restricted affect, so the interactive digital is our anti-monopoly body to adjust eligibility.

The definition of the relevant market, depending on the goods or services market alternative degree. Because the case involves the standardization of patented technology brought the issue of the definition of the relevant market, therefore, the issue must be analyzed to understand the essential patents under the technical standardization of conditions. The so-called standard refers to the optimal order within a certain range, developed by consensus approved by a recognized body, common use and reuse of a normative documents. Technical standards is the condition for the establishment of one or several production technologies must have to meet the requirements and to achieve this standard implementation techniques. Technical standards mandatory, it is essentially a unified technical specifications, technical matters to protect repetitive be unified within a certain range in order to ensure interchangeability, compatibility and versatility of products or services, thus reducing production costs, and eliminate the consumer's "replacement costs" in order to protect the interests of consumers and to promote technological progress.

After the combination of patents and technical standards, operators want to implement the standards, will have to implement a patent or a patent technology of a claim, the patented technology in the implementation of standards is bound to be implemented, often called standard essential patents, such as the implementation of bound to implement a patented technology standards a claim, the claim is often called standard essential patent claims. This means that when the technical standards after using patented technology, so that the patented technology becomes essential patents, it means that while implementing technical standards to implement patented technology, due to the patented technology has the monopoly, therefore, combined with technical standards and patented technology allows monopolistic patent is mandatory technical standards greatly enhanced. Once the patented technology is incorporated into the relevant technical standards, manufacturer of the product in order to make our products meet the technical standards will have to use the patented technology, in other words, manufacturers of products will have to seek a patent license to the patentee. From the perspective of the patentee, when the patented technology is incorporated into the standard, because the patented technology is the only technology manufacturer of the product and must be used, and the patent holder is the only supply side the necessary patent licensing market.

Under standard technical conditions, each 3G license essential patents in the field of wireless communications market, is unique and irreplaceable. Case interactive digital has the world (including China and the United States) 3G standard essential patents, Huawei mobile terminals and wireless infrastructure worldwide manufacturers, distributors and service providers, Huawei in production and management are bound to use these 3G standard essential patents, each 3G standard essential patents are not replaced by other technologies or other patented technologies, interactive digital nor evidence to prove, if you do not use these Huawei 3G standard essential patents, which can obtain alternative technology from someone else or other patented technology.

Meanwhile, 2G , 3G and 4G standards are technical upgrading relations, 2G , 3G and 4G standards essential patents each is unique and irreplaceable. Therefore, given the 3G standards (including WCDMA , CDMA2000 , TD - SCDMA ) uniqueness and irreplaceable, so the trial court found the law to define the relevant market, Huawei scope of the case, in line with the provisions of the antitrust laws of each essential patents.

Second, on the interactive digital in the marketplace question whether a dominant market position.

Second paragraph of Article XVII of the antitrust laws, "Law alleged market dominance means the operator can control the commodity with the price, quantity or other trading conditions in the relevant market, or to hinder or affect other operators the ability to enter the relevant market position in the market. " Interactive digital case has the world (including China and the United States) 3G wireless communications WCDMA , CDMA2000 , TD - SCDMA standard essential patents, based on 3G standard in uniqueness and irreplaceable, essential patents every digital interaction in 3G standard Each license essential patents owned entirely share markets, interactive digital impede or affect the ability of other operators to enter the relevant market in the relevant market. Also, due to the interactive digital without any substantial production, as its only patent licensing business model, not by Huawei patent cross-licensing standards necessary to restrict interactive digital. Therefore, the present case, the interactive digital companies with Huawei 3G standards essential patent licensing negotiations, with the control of Huawei using its 3G standard essential patents for the price, volume and other trading conditions ability, therefore, the trial court found that the law, interaction Digital Huawei has a dominant market position in the relevant market in this case defined .

Patentee under standard technical conditions at the time of the licensee (manufacturer of the product) patent licensing negotiations, patent usually in a strong position in patent licensing negotiations. When the patentee to use its strong position to force the licensee to accept a serious imbalance in the interests of license conditions, the harm alleged misuse of its patent normal market competition, the licensee may seek relief antitrust laws. Huawei's case on the grounds of nationality in this interactive digital sue antitrust infringement.

Third, on Huawei's alleged abuse of a dominant market position to implement interactive digital monopoly tort question whether the establishment.

In the case of a combination of standards and patents, patent rights necessary to prevent or reduce abuse of its dominant market position, various standards organizations in the field of wireless communications to join its members are required to join the members assume certain obligations (such as ETSI , requirements its members in accordance with the principle of fair, reasonable and non-discriminatory licensing their essential patents to other members of the standards organizations to use). The trial court clearly, various wireless communications standards organization requires its members to assume the obligation to join, although different in the title or description, but essentially can use the "fair, reasonable and non-discriminatory," the obligation (or principles) to summarize .

Huawei's case with interactive digital are ETSI standards organization members, interactive digital adding ETSI when you want to clear commitment to essential patents in a fair, reasonable and non-discriminatory principles delegated to other members of the standards organizations to use. Huawei has the burden of proof, interactive digital technology company in the ETSI essential patent claims, the corresponding field of technical standards of China Telecom mobile terminals and infrastructure is also essential patents in China. According to our laws, interactive digital essential patents should be "fair, reasonable and non-discriminatory principles," Huawei licensed to use. When making the necessary patent licensing negotiations, patent holders to master the necessary information to achieve its essential patent licensing conditions, while the other negotiating these transactions do not have the information, because both sides of asymmetric information, it is necessary to implement patent licensing contract transactions, dependent essential patent holders in the contract, the performance should follow a fair, reasonable and non-discriminatory principles, the interactive digital burden fair, reasonable and non-discriminatory obligations throughout the necessary patent license negotiations, the signing of the entire process of fulfilling .

About Huawei interactive digital alleged excessive pricing, price discrimination and denial of trade issues. The trading price of essential patents, is a key factor necessary to reflect whether the patentee licensing fair, reasonable and non-discriminatory principles of. Interactive digital involving patent issued to Huawei specific conditions of license fee offer mainly × × × × × × × × × × × × × × × × × × × × × × × × × × × × in * months * date of the license conditions, × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × ×

Interactive digital × × years * May * May an offer to the main content of Huawei, × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × ×

Interactive digital × × years * May * May an offer to the main content of Huawei, × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × ×

Interactive digital × × years * May * May an offer to the main content of Huawei, × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × ×

According to interactive digital display company in the financial report with the U.S. Securities and Exchange Commission, 2007, in 9 months 6 days, interactive digital with Apple Corporation signed a worldwide, non-transferable, non-exclusive, fixed license fee patent license agreement During the license from 2007 years 6 months 29 days beginning a period of seven years, was licensed patent portfolio covering the iphone and certain future of mobile phone technology, licensing fees for each quarter of 200 million dollars, a total of 56 million dollars. 2007 years 9 months 11 days, Sina reported that "Apple 56 million dollars to buy 3G patent iPhone will support HSDPA ", the financial report and the reports of Apple Corporation coincide, therefore, the trial court found legally licensed to Apple shares interactive digital Content Patent License Agreement Limited is true, that interactive digital license to Apple's 7 -year patent license fee of 56 million dollars . According STRATEGY ANALYTICS analysis of institutions of global mobile phone market, Apple, Inc. in 2007 to 2012 in the total mobile phone sales was 1916.92 billion. According to interactive digital content company "2010 Annual Report" published in 2009, interactive digital and Samsung Electronics Co., Ltd. and its subsidiaries entered into a patent license agreement "2009 Samsung PLA", Samsung authorized non-exclusive, 2G within the global scope , fixed royalty terminal equipment and infrastructure under the 3G standard, a total of $ 400 million, during the licensing deadline in 2012, during the mandate of four years. That interactive digital licensed to Samsung 4-year patent license fee of $ 400 million. According STRATEGY ANALYTICS analysis of institutions of global mobile phone market, Samsung's 2009-2012 total mobile phone sales was 1610.67 million dollars.

According to interactive digital company " 2011 Annual Report contents, "published in 2003 , the interactive digital and RIM signed a worldwide, non-exclusive, in GSM / GPRS / EDGE standards patent licensing agreement terminal unit, the deadline for the 2012 years 12 months 31 days. 2011 , the interactive digital receipt RIM patent license agreement between the Company and related income 4290 $ 30 million. RIM company in 2011 total sales of mobile phones to 148.40 million dollars. To interactive digital license RIM Company 2011 years 4290 ten thousand U.S. dollars is based on patent licensing fees, interactive digital licensed to RIM company 2011 year patent licensing rates for the × × × .

According to interactive digital company " 2011 Annual Report contents, "published in 2003 , the interactive digital and HTC signed a worldwide, non-exclusive, in 2G and 3G standards patents terminal units and infrastructure of the license agreement. 2011 , the interactive digital receipt HTC patent license agreement between the Company and related income of 3380 million dollars. HTC company in 2011 total sales of mobile phones to 151.03 million dollars. To interactive digital license HTC Company 2011 years 3380 ten thousand U.S. dollars is based on patent licensing fees, interactive digital licensed to HTC Company 2011 year patent licensing rates for the × × × .

The interactive digital licensed to Apple's patent licensing conditions and their conditions of the offer given to Huawei comparison, such as patent licensing in accordance with the standard rates, interactive digital in × × years * Month * Day of the authority to Huawei × × × × × × × × × × × × × × × × × × × × × × × × × × × , about interactive digital license to use Apple's patent licensing rates ****** . If, according to a one-time payment of patent licensing fees as a standard, interactive digital in × × years * Month * × day , × × years * Month * × Day intends to authorize Huawei ************* ******************* is interactive digital licensed to Apple's quarterly 200 ten thousand U.S. dollars of patent licensing fees *** ; interactive digital in × × years * Month * × intends to authorize Huawei **************************** is interactive digital licensed to Apple's 5600 patent license fee of a million dollars *** .

The interactive digital Offer Conditions authorized to Samsung's patent license conditions issued its Huawei to compare such as patent licensing in accordance with the standard rates, interactive digital in × × years * Month * × Day intends to authorize Huawei ** ***************************** about is their permission to use Samsung's patent licensing rates **** .

The interactive digital licensed to RIM , HTC 's patent license conditions issued to the conditions of its offer Huawei comparison, such as patent licensing in accordance with the standard rates, interactive digital in × × years * Month * × Day intends to authorize to Huawei ************************************ * , respectively, which are licensed to RIM Corporation and HTC patent licensing company Use rates ******** 's

According STRATEGY ANALYTICS analysis of institutions of global mobile phone market, from interactive digital still necessary patent license to the U.S. Apple, Samsung, U.S. Apple, Samsung has been a few of the world's top ranked mobile phone manufacturers, and Huawei has not been included in the rankings. Even in such cases, interactive digital still much higher than the proposed American Huawei Apple and Samsung's essential patent license price.

× × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × ** Huawei has 51,000 more than R & D personnel, as of 2010 was 12 months 31 days, Huawei has applied for Chinese patent 31,869 pieces, PCT international patent application 8892 pieces, overseas patent 8279 pieces, have been granted patents 17765 , of which overseas Mandate 3060 pieces, join the global 123 industry standard organizations such as 3GPP , IETF , ITU , OMA , NGMN , ETSI , IEEE and 3GPP2 , etc., and to submit proposals in these standards groups accumulated more than 23,000 pieces; while interactive digital has a staff of 260 names , interactive digital companies in the " 2011 Annual Report "in the claims, with more than 19,500 basic patent portfolio and wireless communication technology-related patents and patent applications, consisting of items, by contrast, Huawei's patents are owned by far in terms of quality and quantity far more than the interactive digital , in other words, the market value of Huawei's patents and technology far beyond interactive digital. × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × This suggests that interactive digital contrary to fair, reasonable and non-discriminatory obligations.

Interactive digital in × In * May * May when an offer to Huawei, ****** × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × ***** in both When still in the negotiation stage, in itself contrary to the Contracting interactive digital phase fair, reasonable, under no obligation to discrimination cases, interactive digital to the U.S. International Trade Commission and the U.S. District Court of Delaware, proposed a ban on Huawei's essential patents v., to ban the use of its essential patents Huawei, Huawei due in negotiations with interactive digital has been in a state of good faith, the purpose of interactive digital lawsuit filed in the United States, and that forcing companies to accept high patent licensing Huawei trading conditions necessary patents people can not negotiate in good faith to prohibit the use of its other essential patents, interactive digital behavior an abuse of market dominance behavior. The trial court clearly during interactive digital negotiations with Huawei, the United States filed the necessary patent lawsuit against Huawei ban, which does not belong to refuse transactions in nature, and are forced to accept Huawei patent licensing means high transaction behavior conditions . Due to the company's production activities are mainly Huawei in Shenzhen, China, the United States filed interactive digital essential patents ban lawsuit, will conduct Huawei produce export products excluded, restricted affect, so the behavior of interactive digital as a clear violation of its 3G standards need to be borne by the patentee fair, reasonable and non-discriminatory obligations belong abuse of market dominance behavior, constrained by our antitrust laws.

About Huawei accused of interactive digital tying unreasonable trading conditions and additional problems. Huawei accused of interactive digital essential patents issued its license conditions of the Offer, including its ******************** bundle tying to Huawei. Under standard technical conditions necessary for the patent has a unique and irreplaceable, and × × × × × has irreplaceable. Various wireless communications standards organization, and its members are required to fulfill the obligations upon accession declaration to join the members of the need to disclose patents and patent applications, the relevant body to help expand the scope of the external power standard patent licensing, standardization will actively organizational disclosure, despite the various patents and patent applications related to the subject disclosure, is not necessarily essential patents and patent applications, but for specific standards organization members, the necessary patents and patent applications which can be enjoyed at least the scope of its declaration as a precondition, Therefore, specific standards for members of the organization, the necessary patents and patent applications of its own can be determined. Patentee should not use force for their own standardized × × × × × seek to maximize licensing market, in this case the use of interactive digital dominance under its essential patents licensed to market conditions, will ********* *********** tying, an abuse of dominant market position.

Huawei accused of interactive digital license its essential patents issued the license conditions of the Offer, will also include interactive digital **************************** *********** bundle, will ****************** tied tying to Huawei. In the field of wireless communications market, will be essential patents essential patents in various countries or regions (including 2G , 3G , 4G ) packaged global license, is a common and widely used trading patterns on the market. Meanwhile, the interactive digital companies in its " 2011 Annual Report in "claims that its" patent license is "a one-time payment ', no extra license fees based on sales according to the agreed terms, these' one-time payment 'license agreement may include conditions within a certain period of time, a certain type of product, a number of products sold, some claimed under patent or patent claim permission for a given country (or a combination of these conditions). " This suggests that for interactive digital concerned, it can receive the necessary patents (including 2G , 3G , 4G ), worldwide license to a patent license may be accepted in certain countries, the geographical scope of the license within two interactive digital can be accepted . In view of this, Huawei believes interactive digital proposed in the offer ************************** , does not meet the fair, reasonable and non-discriminatory principles, the trial court not support it.

Fourth, how about interactive digital liable for tort monopolization

Interactive digital while engaged in the patent licensing business activities, the presence of executives confused situation, for example, the case in Lawrence F. Shay , president of the company's interactive digital technology, intellectual property rights is also a common interactive digital communications Limited, the company's implementation of interactive digital Vice Chairman, Chief IP Counsel; Lawrence F. Shay or interactive digital common action authorized representatives. At the same time, digital technology is involved in the interaction patentee, × × × × × × × × × × × × × × × × × × ********** , the interaction of the two numbers is the parent company company, interactive digital companies in 2011 bulletin claimed that "through its wholly owned subsidiary, has more than 19,500 items of wireless communication technology patent portfolio of patents and patent applications. InterDigital Group (interactive Digital Group) from the worldwide sales of all 3G mobile half of the device to obtain a license fee income, "further proof of that fact, interactive digital in patent licensing negotiations, there is a specific division of labor, and the common gain. In view of this, the trial court found the law interactive digital jointly implemented a monopoly tort, shall bear the joint responsibility of the monopoly of law tort. Huawei requires interactive digital stop monopoly tort, the lawsuit was established to support the trial court.

Because the parties have not provided evidence that "because of the defendant caused the plaintiff damage or infringement by the defendant to profit amount infringement" of conclusive evidence, the trial court to consider because the interactive digital monopoly tort, will lead to Huawei in China due lawyer attorney fees incurred due to lawyer attorney fees incurred in the United States, evidence generated by notary notary fees, and competing interests, such as the loss of damage, coupled reconsider interactive digital nature of the infringement, subjective degree of fault, as well as to Huawei the severity of damage to the company, the trial court the discretion of interactive digital monopoly tort damages Huawei economic loss of RMB 20 million.

In summary, Huawei asked to immediately stop the monopoly of interactive digital tort and civil liability established to support the trial court. The main defense of lack of interactive digital proposition factual and legal basis for the trial court inadmissible. According to the trial court "People's Republic of China Anti-Monopoly Law" Second, Article 12, Article 17, paragraph (a), (e), (f), the second paragraph of Article 18, Article 50, "the Supreme Court on the trial because of monopolistic behavior triggered by application of the law in civil disputes Provisions on Several Issues" Article XIV, "Civil Procedure Law of People's Republic of China," the first paragraph of Article 64 provides that After the trial court judicial committee to discuss the decision, ruling as follows: First, the interactive digital technology company, Digital Communication Co., interactive, interactive digital companies to immediately stop excessive pricing for the implementation of Huawei Technologies Co., tying and monopoly civil violations; II. interactive digital technology company, Digital Communication Co., interactive, interactive digital company with effect from the date of this decision within ten days from the date of Huawei Technologies Co., Ltd. joint compensation economic loss of RMB 20 million; three, dismissed the other claims Huawei Technologies Co., Ltd.. Interactive digital technology company, Digital Communication Co., interactive, interactive digital companies if not the judgment of the period specified obligations of paying money, it should be in accordance with the "People's Republic of China Civil Procedure Law" Article 253 of doubling the payment delay The interest on the debt. Case of first instance court costs RMB 141,800 yuan, the interactive digital technology company, interactive digital communications Limited, interactive digital companies shared.

Huawei, interactive digital refused to accept the trial verdict, this Court appeal. Huawei said the appeal: the trial verdict will be on interactive digital ************************* patent bundling and will ******** bundle Tying actions are consistent with recognized market practice, have identified an error in the facts and the law applicable. Related to violation of the relevant provisions of the antitrust laws, causing serious damage to Huawei, the Court of Appeal requesting revocation of the trial-related judgments, interactive digital commuted immediately stop its **************** *********** tied tying act immediately to stop the ******** bundled within the scope of the patent tying behavior.

Interactive digital respondent said: 1 interaction figures also refused to accept the trial verdict has been appealed. 2 interactive digital transactions with Huawei has been refused, "means high patent licensing conditions forced Huawei to accept the" verdict of the trial proceedings in the United States to bring its legitimate rights act does not fall. 3 interactive figures do not implement any antitrust laws prohibit tying behavior, which is to Huawei raised in the course of negotiations on the **** range of patents and ************** ******** combination licenses There is nothing wrong way, the existence of rationality, have formed a common business practices within the industry, will not damage or restrict competition. Therefore, the behavior of the relevant dispute tying conduct the antitrust laws are not prohibited. Huawei's request the Court to dismiss the appeal request.

Interactive digital appeal this court said: First, the trial court would constitute a monopoly on interactive digital tort identified errors. (A) the trial court's definition of the relevant market for the error. 1 trial verdict on the relevant product market is considered an error. Telecommunications equipment and mobile terminal market Huawei's products belong, the virtue of a single standard license essential patents is unable to produce, to create a single complete communication device or a mobile terminal, so a single standard essential patent holders for end product market, they can not directly obtain monopoly power. The trial decision was wrong from the standard definition of essential patents for "irreplaceable" for the one-sided analysis, but ignored the patent market mutual restraint in the field of communications between different companies have different standards necessary due to the formation of the patented technology and competing relationships. In the reality of the market environment, the licensee usually all standard essential patents to obtain an objective standard license these patents even though technically there are different, but they are indispensable to achieve a standard part of the entire contents of the Licensing negotiations are not distinguished in detail, can be abstractly considered licensing market licensed products. Therefore, the relevant product market should be defined in this case the market for all standard license essential patents in a particular set of communications standards. 2 trial verdict on the relevant geographic market finds errors. State Huawei products have been exported throughout the world, the all-exporting countries should be included in the scope of the relevant geographic market, especially in licensing practice standards essential patents, the "global license" is a widely used license mode, in this case the parties are global multinationals, the two sides have been negotiating a worldwide patent license. Therefore, the relevant geographic market should be a global market, rather than the Chinese market and the U.S. market. (B) even if the trial verdict in accordance with the relevant market, in interactive digital still does not have a dominant position in the relevant market. Interactive digital During the negotiations seeking patent licensing fees, but also faces many market constraints, does not have a dominant market position. Huawei hand free to use interactive digital technology company, interactive digital communications Limited, interactive digital companies up **** in one hand, deliberately delayed Facts patent licensing negotiations, interactive digital does not have a dominant market position, it is difficult to Huawei obstruct or restrict competition in the market; standard essential patents in various communication standards are covered constitute market, there are a large number of standard essential patents have a strong competitor, interactive digital license does not have the ability to control the market. (C) even interactive digital is considered to have a dominant market position, it has not implemented any alleged monopolistic behavior trial verdict abuse of market dominance. 1 trial verdict on excessive pricing identified lack of sufficient evidence to support a reasonable and economic analysis. Trial verdict will provide interactive digital Huawei rate quote by permission of its actual sales to other fixed license fee to be charged by the licensee comparison, obviously wrong and unfair. The trial court in the interactive digital with Apple's fixed-fee licensing transactions are translated into the so-called license error rates, the use of the signing of the contract can not be expected to calculate actual sales and comparison, comparative data further cause serious distortion. According to interactive digital computing, Huawei given its license fee quoted by other companies in the same range, there is no distinction between excessive pricing or pricing behavior. Meanwhile, the trial court ignored Huawei, Motorola received from licensees and other communications companies to its standard essential patents owned 1.5 to 3.25% of the royalty rate is usually practice practice. 2 trial verdict on ************** package license constitutes tying practices found not take into account the objective conditions of the market and reasonable grounds, can not be established. The ****************** "package license" is not an additional burden to Huawei, interactive digital did not receive any additional revenue therefore not identified as tying; interactive digital have ******************** is common to meet the same business needs, package license in line with the communications industry business practices. Also, how to determine whether a patent standard essential patents, is a complex legal and technical issues. Package license to avoid infringement litigation between them to improve the efficiency of patent licensing. 3 interactive figures do not add unreasonable trading conditions, there is no violation of fair, reasonable and non-discriminatory obligations. Interactive digital only suggestion given in the offer ********** , not necessarily require ********** . Interactive digital proposed requirements ********************************************* ************************************* ; Huawei never ******* * Terms questioned about its interactive digital by ******** to increase the value of their acquired Terms lack of factual basis. 4 trial verdict nature of U.S. litigation is forcing companies to accept exorbitant Huawei patent license conditions, inconsistent with the facts. Related behavior is a reasonable action to protect their own interactive digital taken legal interests, and related litigation involving the United States Patent, is not associated with the case. Second, in determining the compensation bear civil liability, the trial court about 2000 million in damages to the amount of the judgment of the lack of factual basis and legal basis. Huawei did not suffer any actual damages, attorneys' fees it incurred in litigation in the United States has nothing to do with the case, the evidence does not meet the legal costs related to the rules of evidence should not be admissible. Third, interactive digital and interactive digital communications company Limited is not a proper defendant in the present case, the trial verdict requires its tort liability and joint and several liability are obviously wrong. Multinational corporations, while a senior management held several executive positions related companies is a common phenomenon, and therefore can not be confused with the three drawn, independent personality and constitutes a negative conclusion of contributory infringement. Both sides patent licensing negotiations the parties take several years, the trial verdict did not identify Lawrence F. Shay is involved in the negotiations, whether in a few years is always interactive digital executives, is always represented the three companies; trial verdict and did not identify the company and interactive digital interactive digital communications Ltd. is really involved in patent licensing negotiations with Huawei. Meanwhile, the original judgment ignores the interactive digital and interactive digital communications company Limited is not involved in the patent the patentee this clear fact. Fourth, there is a serious flaw trial program. Huawei requested a temporary increase in interactive digital stop overpricing lawsuit after repeated despite the explicit request of interactive digital trial court unreasonably refused to reassign proof term, refusing to postpone the hearing, a serious violation of legal procedures, a serious injustice to the interactive digital consequences. Accordingly, the Court quashing the appeal trial verdict, dismissed all claims Huawei, Huawei's take the case by a second instance court costs.

Huawei claims that: one, the trial verdict in the relevant market correctly. 1 trial verdict as defined in the relevant product market in line with the Antimonopoly Committee and the State Council of China's anti-monopoly "on the Definition of Relevant Market Guide" provides. From the perspective of demand substitution, each essential patent licenses are difficult replaced by other technologies; From the point of view of supply substitution, alternative technologies, alternative to the standard will not impact on the relevant market. 2 grounds of appeal related to interactive digital untenable. Its wrong and not the end consumer device manufacturers who need a patent deemed necessary, the case should not be the main alternative to consider the needs of the end user phone, whether a single patent licenses necessary to produce the end product and whether it can be an alternative patent no association. Constraints and competition between the patentee is necessary only if the actual exercise of the relevant market dominance, has nothing to do with the definition of the relevant market. Nor by the presence of unauthorized use of denying the existence of the relevant market, the parties would not otherwise produce a series of disputes between the parties. 3 case will be identified geographic market for the Chinese market and the U.S. market is correct. Patents are territorial, so the country should be based on the geographical market for the sector. In view of the "People's Republic of China Anti-Unfair Competition Law" applies only to the territory of China and the Chinese territory of extraterritorial conduct serious harm competition, so Huawei claims the relevant geographic market for the Chinese market and the U.S. market is appropriate. Second, the original judgment has correctly identified interactive digital dominance. The only interactive digital system market supply side, you can control trading conditions. After the criteria for determining that no technology can replace the effective supply, it can hinder interactive digital access to a relevant market. Have market power does not mean that without any market factors, not the existence of constraints argument does not hold a dominant market position. Huawei subject to legal action interactive digital, commercial and legal risks facing the fact that is indicative of interactive digital dominance. Third, the original judgment correctly identified interactive digital behaviors constitute abuse of a dominant market position. Interactive digital During the negotiations, the ban applies to actively seek, offer a substantial rise in sales at high prices to unjustified patent licensing. It will ******************** bundled, constitute an abuse of its dominant position, which requires ******** to attach unreasonable conditions otherwise abuse a dominant market position. Fourth, the compensation for the reasonable costs of the trial verdict, legal. Consider the case of a judgment related to the actual situation, in line with "the Supreme Court on the trial because of monopolistic behavior triggered Civil Disputes Application of Law provisions." Fifth, there is no serious trial verdict program flaws. In the present case the evidence did not change the nature of the case advocate insubstantial differences, the burden of proof should not be re-designated deadline appellant, there is no serious problem of violation of legal procedures. Therefore, the Court dismissed the appeal request interact numbers.

Court has examined, the trial court found that the basic facts are true, the Court recognized.

Also found 2012 years 12 months 31 days, interactive digital communications Ltd. name from InterDigital Communications , LLC changed to InterDigital Communications , Inc. .

During the second trial in this case, this court has handed interactive digital 17 copies of evidence, including: 1 About Huawei company among the top three manufacturers of smart phones news; 2. About Huawei ranked second in China's smartphone market reports; 3 . About Huawei phone sales reports; 4 on Apple iphone mobile phone coverage in China's smart phone market share ranking rely; 5 official website describes Huawei Huawei products used worldwide 140 countries; 6 Credit Suisse in 2013 in a month report on Qualcomm's line of research and translation; 7 interactive digital 2012 Annual Report excerpt and translation; 8 "when viewed from an economic point of architecture and the terms of the patent license"; 9.iphone Five Years in Retrospect: iPhone launch before 11 Predictions ; 10 interactive digital 2012 Annual Report excerpt and translation; 11 U.S. International Trade Commission in 2013, the year 6 months 28 days for interactive digital alleged patent infringement notification about Huawei preliminary ruling made ??in the case. 12. U.S. International Trade Commission against Apple v. Samsung patent infringement case the standard necessary to make decisions and related Chinese translation. 13 Beijing First Intermediate People's Court on the first 03244389.7 and No. 03810259.5 No. patent invalid administrative litigation judgments; 14 judges on the appeals court in Dusseldorf, Germany German court trial practice on standard essential patents in the Motorola v. Microsoft case The testimony; 15 "standard essential patents abuse problem - Germany Orange Book standard case analysis"; 16. decide on the U.S. Federal Trade Commission's antitrust investigation of bone cases issued; 17. U.S. International Trade Commission preliminary ruling in the interactive digital v. Huawei made ??in patent infringement cases. Interactive digital evidence indicated in the foregoing, the foregoing evidence material evidence 1 , 2 , 3 , 4 , 7 , 8 , 9 , 10 , 15 from the Internet, evidence 5 from Huawei's website, evidence of six from Switzerland credit, evidence 11 , 12 , 16 , 17 from the United States International Trade Commission, the evidence 13 from the Beijing First Intermediate People's Court, the evidence 14 from the United States District Court Western District of Washington. Provide the aforementioned interactive digital evidence, which is not in violation of the proposed demonstration fair, reasonable and non-discriminatory licensing obligations, there is no abuse of monopolistic behavior from the law.

Huawei not recognized on the aforementioned evidence, on the grounds that such evidence is not associated with the case, the correlation is not comparable with the case materials, does not have a reference value.

During the second trial in this case, the expert hired by the interactive digital court gave expert advice. Experts to present their views to support interactive digital interactive digital litigation claims that the trial verdict is unreasonable for market definition, even if the original judgment, as defined in accordance with the relevant market, interactive digital nor a dominant market position, but there is no abuse of market dominance behavior . Huawei believes cross-examination in court, expert witness proposed a demonstration just ideas and perspectives, but there is no relevant data to support the investigation.

The Court finds that: the case of abuse of market dominance Department of disputes. According to the appellant's appeal and the reasons for the focus of controversy in this case is: 1. trial proceedings are inappropriate; 2. how to define the relevant market; 3. interactive digital dominant position in the relevant market, whether; 4. interactive digital behavior is related to the accused constitute an abuse of dominant market position; 5 trial Panpei amount is reasonable.

First, the question of whether improper trial proceedings

Interactive digital Appeal considered, interactive digital and interactive digital communications company Limited is not a proper defendant in this case. In this regard, the Court considered: first, the interactive digital communications and interactive digital technology Co., Ltd. is a wholly owned subsidiary of the Company are interactive digital companies, and interrelated companies, including three foreign companies, including the related group referred to as interactive digital ( InterDigital Group) . Secondly, interactive digital communications Limited, interactive digital technology company and interactive digital companies operating license essential patents involved in the division of labor matters and common gain. Interactive digital technology company is involved in the patent holder, **************************************** ******** , interactive digital company in its 2011 publicly claimed bulletin, "through its wholly owned subsidiary, has more than 19,500 items of wireless communication technology patent portfolio of patents and patent applications, interactive digital companies from all over the world All sales of 3G mobile devices have made ??half of the license fee income. " Third, interactive digital communications on behalf of the Group Ltd as interactive digital joined the " ETSI "and many other telecommunications standards organization, involved in various types of wireless communications international standards, × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × × ** fourth, Lawrence F. Shay litigation before the start of second instance is the common case of intellectual property interactive digital Communications Ltd., the company's executive vice interactive digital Chairman, Chief IP Counsel, is president of interactive digital technology company, is also co-authorized representative of the three companies. Thus, in terms of the relationship between interactive digital companies, interactive Digital Communication Co., Ltd. and interactive digital technology between companies, or from ************ , ********* ************************************************** * Look, interactive digital companies, interactive digital communications Ltd. with a direct stake in the case, should belong to the co-defendant. Interactive digital Appeal found that interactive digital company, interactive digital communications Ltd. is not the proper defendant in this case, the reason is not established, the Court shall not be accepted.

Interactive digital still Appeal held that the trial evidence Huawei in a sudden increase in the exchange date requirements, interactive digital stop excessive pricing claims, the trial court should reconsider deadline specified evidence, but the trial court ignored the clear requirements of interactive digital refused to postpone the hearing , in violation of legal procedures. After investigation, the Huawei Company in 2011 was 12 months 6 days indictment submitted to the trial court, the Huawei company claims a decree in general requires "immediate cessation of monopoly tort, including differential pricing behavior to stop, stop tying behavior Stop trading conditions attached unreasonable refusal behavior and stop transactions ", and in parts of the facts and reasons are clearly stated," The defendant in the negotiation process has been very unreasonable for the plaintiffs insist expensive ...... (with South Korea's Samsung licensing fees Compared rate) spread between the two ******* , far beyond a reasonable interval difference ...... defendants not only set a high pricing, tying and also conducted with unreasonable demands, "shows the" over High pricing "facts and arguments, Huawei has been stated and fixed at the time of prosecution. The trial court in 2012 was 9 months 26 days exchange organization when the evidence of both parties, Huawei will suit requests an adjustment to "immediately stop the monopoly tort, including stopping excessive pricing behavior of differential pricing behavior to stop, stop tying behavior Additional unreasonable trading conditions to stop the behavior, and refused to stop trading behavior, "and part of the facts and reasons further described as a" defendant in the negotiation process, the plaintiff has unreasonably high prices persist extremely similar "and" (South Korea's Samsung and conditions Compared licensing rates) spread between the two *** , beyond a reasonable interval differences due to different trading partners, negotiating costs caused ....... " Thus, Huawei claims for adjustments and changes, but the laws of the relevant evidence based on the original qualitative behavior is subject to adjustment, based on facts and evidence and no real change it, there is no evidence of problems in the raid on the burden of proof, so The trial court held that the term of the original proof of evidence sufficient to meet the requirements without the need to re-specify the duration or to postpone the hearing of evidence, in line with the relevant facts and the law, nor for interactive digital constitute a serious injustice. Therefore, interactive digital appeal that the trial proceedings in violation of legal procedures, there is a serious flaw, which lacks factual and legal basis, the Court dismissed.

Second, with regard to the problem of how to define the relevant market

"The State Anti-Monopoly Committee on Definition of Relevant Market Guidelines" (the "Guidelines") Article II, any competitive behavior (including having or may have excluded the effect of restricting competition behavior) occurred within a certain range of markets. Clearly defining the relevant market is a competitive market operators range. Scientific and rational definition of the relevant market, to identify competitors and potential competitors, market share and operators determine market concentration, market position identified operators to analyze the impact of the behavior of the operators of the market competition to determine the behavior of the operators is illegal The key issues and legal responsibilities to bear in breach of the law and so on, have an important role. Case, to determine whether antitrust violations interactive digital provisions, abuse of dominant market position, the premise is to accurately define the essential patents involved in the case where the relevant market.

"People's Republic of China Anti-Monopoly Law" Article 12 of the relevant market is in a period of time operators compete for specific goods or services, the range of goods and geographical scope. "Guide" Article III, Article IV, antitrust enforcement in practice, often need to define the relevant product market and the relevant geographic market. The size of the relevant market depends primarily on the range of goods (geographical) degree can be an alternative. Competition in the market for operators to conduct a direct and effective competition constraint is the existence of the market has a strong demand for commodities considered substitutes for or able to provide these commodities area, defining the relevant market demand mainly from the perspective of demand substitution analysis . When the supply of alternative competitive constraints on the behavior of the operators generate similar demand substitution, supply substitution should also be considered. Meanwhile, "Guide" Article VII, defining the relevant market is not the only way. When defining the relevant market, demand substitution analysis can be performed based on the factors of the product characteristics, uses, price, supply substitution analysis when necessary. Regardless of the method of defining the relevant market, must always grasp the basic properties of the product to meet consumer demand, and as a basis for defining the relevant market in significant deviation occurs when correcting. Thus, the Court's definition of the relevant market in this case, mainly based on essential patents involved in the basic attributes to meet consumer demand, considering the needs of those involved in essential patents for the factor function, use and price analysis of demand substitution, supply substitution and appropriate consideration analysis.

First, from the basic attributes and characteristics essential patents of view. When a patented technology to become the standard essential patents elected to participate in the competition's product manufacturer / service provider must provide sub-standard goods / services, which means that it has to implement the relevant essential patented technology, which can not be do circumvent designed to bypass the necessary patents. This standard brings blockade effect and patent itself has a legal monopoly attributes combine to make the necessary patents the technology industry and the participants must use a unique, industry participants need to seek permission of the patent holder, or they will lose The precondition for participating in the competition. Therefore, different patents essential patents in general, it does not exist sufficient approximation of actual or potential alternatives. This is the focus of this case must grasp the product attributes and qualities.

Secondly, the alternative analysis from requirements. In this case the parties were recognized, interactive figures were in China and the United States enjoy 3G wireless communications technology WCDMA , CDMA2000 , TD-SCDMA standards of a large number of essential patents. Since each essential patents are 3G wireless communications standards are an integral part of, any refusal to license essential patents are related manufacturers will not result in the use of technologies, which can not produce standard products, are excluded from the target market access, therefore, necessary patented technology to become involved Huawei's technology is unique and must be used, no other technology available alternatives. Interactive digital Appeal considered, 2G , 4G standard can replace 3G standard, and therefore it should be standard technologies are incorporated into the relevant market. The Court finds that, in general, the standard is selected, the industry participants required to design, debug, and production is consistent with the standard product. In the beginning of the establishment of standards, industry participants can still easily give up a technology shift to another technology. But with the standard resource transfer and conversion increased to increase the cost of another standard, this conversion is difficult. 2G , 4G standards and 3G standards are different standards in different stages of technological development in the field of wireless communications set up, each in various standards essential patents are unique and irreplaceable. Case, in order to perform Huawei 3G wireless communications technology standard, has made ??a lot of upfront investment, these costs into an irrevocable, if immediately abandon the standard to other standards, not only the initial investment required to bear these costs, the need to withstand the tremendous switching costs and market risk, which is obviously difficult or even impossible to perform. It is related to interactive digital proposition untenable.

Third, from the supply alternative analysis, as mentioned above, the combination of patents and standards necessary to become unique and patented technologies must be implemented, if necessary, the patent holder to become involved in the technology market only the supply side. It involved the necessary patent licenses in the market, there is no competing with interactive digital operators. Meanwhile, the essential patents inherent legal monopoly of the decision, nor the presence of other operators through short-term investment to turn a necessary and reasonable franchise operators possible.

Thus, the trial court held that interactive digital in China and the United States 3G wireless communication technology standards ( WCDMA , CDMA2000 , TD-SCDMA ) each essential patent licensing market constitutes a separate relevant market, the relevant facts and found to meet law, the Court recognized. Interactive digital Appeal considered a necessary patent license alone can not produce a complete product, and thus can not serve as the relevant market, the claim lacks factual and legal basis for the Court not supported.

Interactive digital still Appeal considered that Huawei's products throughout the world, so the geographical scope of the relevant market should be on a global scale, the trial court will limit the geographic market on China and the United States is wrong. The Court finds that the relevant geographic market refers to those who need access to geographic areas with relatively closely substitutable commodities. Because of intellectual property are territorial, in different jurisdictions, the existence and use must comply with local laws. Therefore, in the patent licensing market, which inevitably associated with the extent permitted by the reach of the geographical scope of the relevant patents. In this sense, essential patents related to interactive digital acquired in each country, even if the content is consistent technical solutions, related rights, but is independent of the basis for its existence and the scope of the exercise is not the same, so the mutual does not constitute a competitive relationship between or substitutes. Case, Huawei claimed the relevant market in China for the interactive digital 3G wireless communication technology standards ( WCDMA , CDMA2000 , TD-SCDMA ) each essential patent licensing market (geographical scope of China), as well as in the U.S. 3G wireless communication technology standards ( WCDMA , CDMA2000 , TD-SCDMA ) each essential patent licensing market (geographical scope is the United States), both within each reach of the geographical scope of their rights (namely China and the United States) constitute separate geographical market. It was not improper for the trial court considered the relevant market. Interactive digital only range of Huawei products exported to the scope of the relevant geographic market advocate, no legal basis, the Court will not support.

Since China and the United States of interactive digital respective owners in 3G wireless communication technology standards ( WCDMA , CDMA2000 , TD-SCDMA ) essential patent claims, the occurrence of which license essential patents on Chinese business practices, and behaviors related rights are exercised in China , shall be governed by the law of antitrust regulations; while its U.S. operating license essential patents behavior can directly Huawei and other domestic production activities in China, export opportunities and export trade have significant, substantive, reasonably foreseeable exclude, limit the impact, it is also subject to the regulations of China's anti-monopoly law.

Third, on the interactive digital dominance in the relevant market, the question whether

"People's Republic of China Anti-Monopoly Law" Article XVII paragraph 2, a dominant market position, is the operator with ability to control the price, quantity or other trading conditions in the relevant market, or to hinder or affect other operators to enter ability of the relevant market position in the market. Article 18 operators identified a dominant market position, it should be based on the following factors: the operator's market share in the relevant market, and competitive conditions in the relevant market; the operator the ability to control the sales market or raw material procurement market; the Other operators in the operator's dependence on the transaction;; operators' financial and technical conditions for other operators to enter the relevant market the degree of difficulty; and finds that the dominant market position of other factors related. Finds that the market dominance operators need to consider market share, competition in this market, and the degree of difficulty of a variety of factors such as market access.

As mentioned above, the relevant market in this case is: interactive digital China in 3G wireless communication technology standards ( WCDMA , CDMA2000 , TD-SCDMA license essential patents each market) in, as well as in the United States of 3G wireless communication technology standard ( WCDMA , CDMA2000 , TD-SCDMA ) each essential patent licensing market constitutes a separate relevant market. The case that a relevant market is a collection of separate relevant market. Since in the case of a combination of intellectual property and standards, product manufacturers to produce standards-compliant products, the implementation of essential patents essential and irreplaceable, necessary to obtain a patent beyond the patent the patentee market power connotations. Interactive digital license essential patents involved in the case as only the supply side of the market, its 3G essential patent license for each standard in the market with full share, so its ability to impede or completely affect other business operators into the relevant market. Moreover, due to the interactive digital only patent license as its business model itself does not make any substantial production, without relying on or subject to the 3G standard cross-license patents in other necessary Liren, so its market power is not subject to effective constraints. In this case, the trial court found that interactive digital correct a dominant market position in the relevant market is necessary patent licenses, hospital support.

Fourth, with regard to whether the conduct constitutes accused of abuse of dominant market position

Interactive digital market dominance in the relevant market share itself is not subject to legal regulation, antitrust regulations only monopoly abuse of market dominance behavior. Therefore, the need to examine whether the conduct charged interactive digital related abuse of dominant market position, market competition eliminate or limit the impact.

(A) whether the issue constitutes excessive pricing

"People's Republic of China Anti-Monopoly Law" Article 17, paragraph (a) shall be prohibited operators have a dominant market position in the sale of goods at unfairly high prices. The terms of the regulation is the operator with a dominant market position by virtue of its dominant market position of the parties to the transaction carried out acts of unfair trading. Case, the interactive digital whether unfairly high Huawei related to license essential patents, a comprehensive relevant facts and evidence to be identified.

First, from the front of the interactive digital Huawei patent licensing fees on essential issues involved . ** times quoted view, were significantly higher than those of other companies in the interactive digital patent licensing fees. According to the trial court found that the fact that the terms of the patent license for the standard rate, interactive digital section ** times the offer intends to authorize Huawei × × × × × × × × × × × × × × × × × *** ************* , about interactive digital license to Apple's patent licensing rates ***** , is licensed to Samsung's interactive digital patent licensing rates ***** ** , is licensed to interactive digital RIM company and HTC patent licensing rates ******** . In terms of the patent license fee to be charged a one-time standard, interactive digital section ** rd, ** times the offer intends to authorize Huawei **************** patent licensing fees , is licensed to Apple's interactive digital per quarter to 200 million dollars in patent licensing fees of **** ; Section ** times the offer intends to authorize to Huawei ************ patent licensing fees , is licensed to Apple's interactive digital 5600 patent licensing fees million dollars ***** . Interactive digital Appeal held that the trial court is necessary for the comparative method patents pricing errors should not be interactive digital patent licensing fees charged by other companies directly converted into a one-time patent licensing rates charged by actual sales, so companies with Huawei comparison. The Court finds that the fixed license fees and royalty rates are charged according to two different standards of patent licensing fees charged by the way, both in general should not be directly compared. But in the interactive digital has been reluctant to submit the relevant patents in this case, a licensing contract, reluctant to disclose their condition to other companies under license rates charged by the trial court based on the content of interactive digital annual report disclosure, the other licensee's sales revenue and other circumstances, the projected rates of patent licensing, which intends to patent licensing rates to be charged by Huawei compared with interactive digital, as a reference to determine whether there is excessive pricing, has a certain rationality and science. Moreover, the interactive digital has never been able to deny that, even if the cost of licenses to use patents for the same point of view, interactive digital intends to patent license fee fixed one-time charge of Huawei, always make clear unreasonably higher than its licensed to Apple the company's one-time patent license fees. Therefore, interactive digital appeal and the grounds on excessive pricing behavior which does not exist can not be established, the Court will not support.

Secondly, interactive digital Huawei companies charge exorbitant patent royalties lack legitimacy. Interactive digital product is involved in this case in 3G essential patents related to wireless communications, has been fixed as a patented technology down its investment in generation occurs mainly in R & D, patent applications, as well as the inclusion criteria and other times when it After becoming essential patents, the cost has been basically stable. Moreover, interactive digital in its " 2011 Annual Report also consider themselves ", the interactive digital in 2009 to 2011 royalties received by declining years, "patent licensing rates and product pricing interrelated ...... (these products face More and more downward pressure on prices), may lead to the invention patent licensing rates fall we received. "In this case, the interactive digital still global handset sales rankings, far less than the overall strength of the U.S. Apple, Samsung Companies such as Huawei made ??exorbitant licensing fees, the apparent lack of rationality and legitimacy. From the consequences of view, interactive digital Huawei unfair to impose high licensing fees behavior will lead to either give up competition in the relevant Huawei terminal market, or had to accept unfair pricing conditions, so that the Huawei terminal in the relevant market increased competition costs, reduced profits, directly restricts its competitiveness.

Third, interactive digital requesting ************** and related litigation filed in the United States to further strengthen the excessive pricing of irrationality and unfairness. Generally, ******** itself does not necessarily constitute an unreasonable additional conditions, the actual situation of the case should be considered comprehensive. The present case, not only the requirements of Huawei interactive digital pay high license fees and forced Huawei given its **************** , while Huawei compared with interactive digital, it * *** is much higher than the number and value of interactive digital companies, which obviously will further enhance the value of Huawei company to obtain the necessary patent licenses and pay, exacerbated by unfair pricing is too high, in violation of anti-monopoly regulations. At the same time, interactive digital does not fulfill its fair, reasonable and non-discriminatory licensing obligations, ignoring Huawei's sincerity and goodwill in the license negotiation process, not only unreasonable adjustments related quotes, but essential patent injunction lawsuit filed in the United States, the surface the proceedings in the exercise of legitimate means, actually threatened to force Huawei's intention to accept the high patent licensing conditions by means of litigation, forcing Huawei essential patents on factors other than the consideration paid accordingly, so that the behavior does not have legitimacy, should be denied. Interactive digital Appeal held that it was not mandatory for Huawei must ************* , which filed the complaint just ban the lawful exercise of their rights, the relevant quote does not belong pricing discrepancies related claims with facts, not establishment, the Court not supported.

In summary, the trial court considering the relevant license fees compared to each other factors that the company's actual situation, as well as interactive digital cross-license related litigation cases so identified on interactive digital license essential patents involved Huawei's offer constitutes unfair excessive pricing, in line with the relevant facts and the law, not improper, the Court support.

(B) whether the issue constitutes a tying

"People's Republic of China Anti-Monopoly Law" Article 17, paragraph (e) prohibits operators have a dominant market position is no justification for the tying product, or attach other unreasonable trading conditions at the time of the transaction. Compared with the general property rights, when the tying and tied products involving intellectual property, due to the knowledge of the product tying and bundling by lower sales of marginal cost, package licensing can improve efficiency, and therefore may not be blanket antitrust license, but if The package is compulsory license, in violation of the principles of fair trade and the lack of justification should be subject to antitrust regulation.

First, interactive digital will ******************** bundled evaluation tying behavior. Interactive digital Appeal considered ******************** difficult to distinguish between the two, the two bundling consistent with industry practice, and to promote competition in the market, does not constitute a violation of antitrust law tying behavior. The Court finds that, under standard technical conditions necessary for the patent is unique and irreplaceable, and × × × × × substitutability generally there will **************** * bundling, will lead to the necessary patent license essential patents on Liren market market power extends to × × × × × × × markets, which will impede or restrict × × × × × × × market competition. Case, the interactive digital to licensing negotiations Huawei, the ********************** bundling, and claimed ********* ********************************* constitute a mandatory package licensing, the act will result, regardless of whether Huawei as long as they wish to obtain the necessary patent licenses, you must purchase the same × × × × × × × × , the act clearly limits the × × × × × × × × × competitive behavior of the market, constitute an abuse of a dominant market position. Therefore, the trial court found that interactive digital tying violation of antitrust laws related to the right, the Court shall be maintained. Interactive digital proposition appeals ***************** difficult to distinguish, but because of its added in the field of wireless communications standards related organizations, must disclose relevant patents and patent applications necessary, so for a particular Standards Organization members, the necessary patents and patent applications of its own can be determined, the interactive digital on **************** difficult to distinguish between the two is an industry practice bundling lacks factual basis for the Court not supported.

Secondly, with regard to interactive digital will ********************************** tied the **** range essential patents tied tying behavior evaluation. Since the standard technical conditions necessary patent itself is unique and irreplaceable, so whether it is 2G , 3G or 4G standards essential patents are not under substitutability, bundling them together, not only in the efficiency, but not will produce non-essential patents like the dominance in the improper extension of a technology market, limiting the relevant market competition. Moreover, in the institutes accepted ( 2013 ) Guangdong Supreme Court Min San Zhong Zi 305 number case, Huawei's lawsuit is asking the court in a fair, reasonable and non-discriminatory principles of interactive digital technology companies judged on its entire Chinese standards ( including 2G , 3G , 4G standards including) the necessary patent licenses Huawei's license rate or range of rates, which is also proved that the ************* bundle license, did not violate Huawei wishes, does not have a compulsive. As for the **** essential patents within the scope of the problem of bundling, interactive digital company has provided evidence that, worldwide license to a common market and the trading model is widely used, and evidence in this case also shows that Apple's interactive digital company Other licenses multinational companies, such as Samsung are worldwide license; Moreover, from the field of wireless communications, due to essential patent rights were formed in various different areas of **** essential patents within the scope of packaged permit compliance with the principle of efficiency, especially for multinational companies help reduce costs and thereby helping to improve consumer welfare, in the case of Huawei no rebuttal evidence, the behavior is not considered to restrict competition, in violation of antitrust laws. Accordingly, the trial court found that interactive digital will **************** behavior and bundled in **** necessary within the scope of the patent tied tying conduct did not constitute abuse of a dominant market position, there is no improper, the Court shall be maintained. Huawei violation of antitrust laws on the two appeals proposition can not be established, the Court will not support.

Fifth, on trial Panpei legitimate question whether the amount of

"Supreme Court to hear because of monopolistic behavior triggered by a number of issues in civil disputes the application of the provisions of the law," Article XIV: "The defendant implementation of monopolistic behavior, causing loss to the plaintiff, according to the plaintiff's claim and the facts found, the court may order the defendant legally stop the infringement, damages and other legal obligations, according to the plaintiff's request, the court may be reasonable expenses incurred by the plaintiff investigation, to stop monopolistic behavior damages paid by crediting the range. "case, interactive digital involved in setting the necessary patent licenses on excessive pricing and tying monopoly behavior of Huawei produce exclude or limit the impact of competition, Huawei harm the interests of the law should be halted, and liability. Since Huawei and interactive digital not provided proof of actual loss due to interactive digital infringing Huawei suffered, nor provide evidence that the interaction of the actual profit figures due to the infringement, the trial court consolidated the case related to the case, considering the interactive digital infringement nature, subjective degree of fault, tort duration and impact damage, and consider Huawei due investigation, to stop the reasonable expenses paid monopolistic behavior, discretionary interactive digital compensation Huawei 2,000 million, in line with relevant laws and regulations, which are basically a moderate amount , the Court recognized. Interactive digital Appeal considered that the lack of factual and legal basis for the amount of the claim can not be established, the Court dismissed.

In summary, the appellant Huawei, interactive digital grounds of appeal and the lack of factual and legal basis, the Court dismissed. The trial verdict, the facts are clear, the applicable law is correct, according to the law should be maintained. Accordance with the "People's Republic of China Civil Procedure Law" Article 170, paragraph ( a ) the provisions of paragraph, the decision as follows:

Dismissed the appeal and upheld the original verdict.

The case of second instance court costs 141,800 yuan, Huawei Technologies Co., Ltd. by the appellant the burden of 2000 yuan, the appellant interactive digital technology company, interactive digital communications Limited, interactive digital companies afford 139,800 yuan. Interactive digital technology company, Digital Communication Co., interactive, interactive digital companies have this court prepaid 425,400 yuan, the Court shall be returned to its multi prepaid 285,600 yuan.

The decision is final.

The presiding judge Qiu Yongqing

Acting Judge Xiaohai Tang

Acting Judge Danjing Han

II 0 21 October 2013

Clerk Zhang Yin Yan




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