In October 2013, the Guangdong High People's Court issued its final judgment in Huawei's antitrust case against InterDigital (IDC), a US wireless communications technology and patent company. The court found monopolistic conduct and ordered compensation of RMB 20 million. The judgment's outcome was reported on October 28.
The case attracted international attention. It was reported as China's first case involving standard-essential patents, the first Chinese ruling finding abuse of market dominance through unreasonable patent royalties, and the first to use the FRAND principle—fair, reasonable and non-discriminatory licensing—as a basis for judgment.
The dispute followed proceedings in the United States. In July 2011, IDC filed a complaint with the US International Trade Commission and brought a civil action alleging that Huawei's 3G products infringed seven IDC patents. In January 2013, US authorities also initiated an investigation concerning 3G and 4G equipment. Huawei had filed its Chinese antitrust action in Shenzhen on December 6, 2011, seeking cessation of the conduct and RMB 20 million in damages.
The Guangdong court accepted Huawei's complaint of unfairly high pricing. Its principal reasons were that IDC's four offers to Huawei were markedly higher than the terms offered to other companies, in some instances by a factor of 100; that demanding such high royalties from Huawei, whose worldwide handset sales were far below those of Apple and Samsung, lacked justification; and that IDC had sought royalty-free use of Huawei's patents while using Section 337 proceedings and litigation to pressure Huawei into a free cross-licence.
The court concluded that the unfairly high pricing constituted monopolistic conduct and infringed Huawei's rights.