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ZTE Jabs Back at Huawei

9:15 AM -- With the bell struck for round two of the legal punch-up between the telco world's favorite two Chinese vendors, ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) has come out of its corner with a series of verbal jabs aimed at rival Huawei Technologies Co. Ltd.

Huawei announced Wednesday that, following its initial legal action in Europe against its main domestic rival, it had secured a preliminary injunction against ZTE in Germany. (See Huawei Granted Injunction Against ZTE and Huawei vs. ZTE – FIGHT!!)

Huawei described the decision as a victory. ZTE suggests that victory is somewhat hollow.

Here's ZTE's response (emailed Thursday morning) to the news from Germany.

    Regarding the recent litigation issue between ZTE and Huawei in Germany around the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (RoHS) directive, ZTE would like to clarify the following:

    1/ The preliminary injunction is just a temporary legal process and is not the final legal result

    Regarding news reports yesterday that Huawei has been awarded a preliminary injunction on 2nd May 2011 against ZTE for trademark infringement, ZTE has the following clarifications:

    A temporary injunction is not a final legal judgment but only a specific legal process of a lawsuit. Huawei can obtain the temporary injunction by simply filing an ex parte application to the court. This action is only a temporary relief measure, and ultimately the judgment whether an infringement has occurred is still pending the final court decision. Should the court find ZTE not guilty, Huawei has to bear all the losses thus incurred. In fact, ZTE has not received any formal litigation from Huawei yet.

    2/ ZTE has stopped using the relevant trademark a year before Huawei awarded the trademark registration; therefore, the injunction has no actual impact on ZTE’s business
    ZTE has stopped using the relevant trademark for its products since 14th July 2009. Huawei has applied the trademark applications from the European Union (EU) on 4 November 2009 and got the approval from EU on 27th May 2010.

    Obviously, Huawei intended to use the trademark right that it acquired on 27th May 2010 to sue ZTE for using the logo before 14th July, 2009 of the act. This is beyond normal technology, marketing and legal litigation.

    At ZTE, we believe any means beyond technology, marketing, legal litigation should not be used as competition tactics. ZTE's determination to explore the European market will not be impeded by this or any such action. The preliminary injunction will not impact on ZTE's business.

    3/ Huawei had no right to register RoHS logo as a trademark. ZTE has applied for revocation from the European Union

    RoHS is the European Union's environmental certification, developed by the EU legislation of a mandatory standard, which stands for "Restriction of Hazardous Substances". It is not an enterprise's "dedicated" environmental identity, not to mention as a logo of a company's product. This is like having a little bit of graphic design around the words "energy saving", and use it as a trademark of household appliances. There is a clear lack of legitimacy. The trademark application procedure of EU is different from China, and EU will not review the actual content in trademark applications. Huawei subsequently added some graphical design elements around these four words and applied for a so-called trademark.ZTE has applied to the EU for revocation of this trademark to protect the interest of ZTE and the industry.

I sense some schadenfreude in various headquarters around Europe...

— Ray Le Maistre, International Managing Editor, Light Reading

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