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Samsung ordered to pay $7.3 million

(China Daily/Agencies)
Updated: 2008-12-24 07:38

Samsung Electronics has been ordered to pay 50 million yuan ($7.3 million) in compensation to a Hangzhou firm for an infringement of its intellectual property rights, Sohu.com reported on Monday.

The Hangzhou Intermediate People's Court made the ruling on Saturday.

Samsung was deemed to have infringed on Holley Communications' patents on dual-mode mobile phones, which support the GSM and CDMA standards.

Almost all mobile phones used in China use the two standards.

The compensation is the most awarded in an IPR case involving China's telecommunications industry.

The ruling follows the announcement by Li Yizhong, minister of industry and information industry, on Dec 12 that China will roll out its 3G services at the turn of the year and invest 280 billion yuan in the industry over the next two years. According to a report by the Associated Press, Lee Eun-hee, a Samsung spokeswoman, said in Seoul: "We haven't received official notification from the court."

However, the Yonhap News Agency quoted an unnamed official in Seoul as saying Samsung will appeal if it loses the case.

The court ruling was a boost for Holley, which claims Samsung sold more than 700,000 cell phones using technology it patented in 2002, the Xinhua News Agency said.

Holley purchased the San Jose, California-based chip design firm Philips CDMA in 2001 and filed the dual-mode patents with the State Intellectual Property Office (SIPO) the following year.

Holley filed the IPR suit against Samsung in April of last year. The Republic of Korean firm then appealed to the SIPO, asking it to invalidate the Holley patents, but the request was rejected in May.

The Hangzhou court then began hearing the case.

Holley said on its website that it had received government support in terms of funding and policies.

"Samsung won't be the last to be prosecuted for infringements of the dual-mode patent of Holleycomm," Ge Chen, its executive director said on the website.

Also, Shanghai's China Business News quoted Ge as saying the compensation payment could yet rise, as the figure was based on Samsung's sales to the start of last year.

But the company hopes for a settlement through talks, he said. The ruling comes as China prepares to issue third-generation mobile licenses as early as this month, a move expected to spur spending on equipment and services in the world's biggest mobile phone market of 650 million users.