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The US International Trade Commission began investigating whether the US smartphone maker Blu infringed standard patents of LG Electronics’ Long Term Evolution, according to the independent federal agency.
Blu, established in 2009, is the sixth-largest handset maker in the North American market, selling low-end phones worth below $300. The firm sold around 5.2 million units last year -- a 68 percent growth from the previous year.
LG Electronics is the third-largest handset maker in the US, with around 13 percent market share, following Apple and Samsung.
“The US International Trade Commission has voted to institute an investigation of certain LTE wireless communication devices and components. The products at issue include mobile phones,” the ITC said in a statement released last week, adding the investigation is based on a complaint filed by LG Electronics.
In March, LG Electronics filed the complaint with the ITC, seeking a cease-and-desist order and claiming Blu imported smartphones that infringe five of LG’s LTE standard patents. The Korean tech firm also filed an infringement lawsuit and claimed compensation against Blu in a Delaware federal court.
These are the first complaints LG has filed against another smartphone maker.
“This blatant disregard for the intellectual property rights of (LG) is consistent with Blu Products’ current practice of paying no one licensing fees,” LG wrote in its ITC complaint, adding that Blu’s “conduct of unfair competition has and will continue to adversely affect” the company.
The ITC said it will set a target date for completing the investigation within 45 days after its institution. The remedial orders are effective unless the US Trade Representative disapproves it within 60 days.
The Korean tech giant said it repeatedly sought to negotiate a license with Blu, but its efforts were ignored.
“We have sent warning letters four times to Blu since last year but it has never responded to us. We have filed a lawsuit in order to actively protect stand-alone technologies and to strictly handle improper use by rival companies,” said a LG Electronics’ spokesperson.
A spokeswoman for Blu could not immediately be reached for comment.
LG currently has the largest standard patents on LTE globally. The firm has retained the top stop in holding LTE and LTE-Advanced patents for five straight years since 2012, according to the US patent research firm TechIPm.
LTE phones have been growing fast in the global smartphone market recently. In 2012, there were 920,000 LTE phones, accounting for 13 percent of the total 7 million smartphones. The figure has grown to 9.4 million units, or 65 percent, out of the total 14.4 million units in 2014, and to 12.6 million units, or 85 percent, out of the total 14.8 million units last year.
By Shin Ji-hye (shinjh@heraldcorp.com)
