Smartphones made by Huawei might be banned in the U.K. market because the company failed to pay for a global license on patents, according to a High Court ruling.
If Huawei fails to pay, the High Court will order for a ban on the sale of Huawei smartphones in the U.K. The court also ruled that Unwired Planet is not breaching any copyright infringement laws and can license anywhere in the world.
Huawei's patent dispute is with Unwired Planet, an American patent owner. The two companies have been in a long-running legal battle related to 4G networking technologies.
The Chinese manufacturer was ordered to pay for global license fees for patents. The ruling was welcomed by Huawei because the fee is much smaller than the demand from Unwired Planet.
Justice Ian Birss ruled that royalties that are to be paid based on global sales are "fair, reasonable and non-discriminatory (FRAND)." The proposed rate is between 0.03 percent and 0.06 percent of sales of all units using the 4G network technology.
"Simply stated, the main dispute to be resolved is whether and to what extent various terms on offer are or would be FRAND," Judge Birss said.
He added, "A U.K. portfolio license is not FRAND. The FRAND license between Unwired Planet and Huawei is a worldwide license."
A spokesperson from Huawei said, "We welcome the decision by the Court that Unwired Planet's royalty rate demands have been found to be unreasonable."
He added, "Huawei is still evaluating the decision as well as its possible next steps. Huawei does not believe that this decision will adversely affect its global business operations."
Unwired Planet has a wide range of patents that are used by many telecommunications companies. These were acquired by the company from Ericsson.
In 2014, Unwired Planet sued Huawei, Samsung and Google fo infringement on their portfolio. The American company has already reached a deal with Google and Samsung.
Huawei has a small market share in the U.K. but is the third largest smartphone manufacturer in the world. Unwired Planet is owned by PanOptis, a Texan patent company.