DALLAS – A patent infringement case against ZTE Corp. will continue after a federal judge denied the Chinese smartphone company’s motion to dismiss the lawsuit filed by a Texas mobile software developer.
In a May 30 opinion filed in the Dallas Division of the Northern District of Texas, Chief Judge Barbara M.G. Lynn denied ZTE’s motion to dismiss the June 2017 lawsuit filed by Seven Networks LLC. ZTE Corp. is accused of using “patented software technologies for conserving battery usage and extending battery life,” according to the opinion.
In its motion to dismiss, which was filed in October 2017, ZTE argued that the Texas court doesn’t have jurisdiction because the company’s U.S. headquarters is in New Jersey.
Lynn ruled ZTE’s subsidiary, ZTE (USA) Inc., is under Texas’ jurisdiction because it sells a significant number of devices in the United States. She noted that ZTE is the fourth-largest provider of mobile devices sold in the United States. She also cited evidence Seven Networks provided showing ZTE (USA) Inc. was created “for the purpose of distributing, selling, installing, and supporting telecommunications equipment in the United States.”
According to the opinion, the company’s devices are designed and manufactured in Shenzhen, China, then title is transferred to ZTE (USA) Inc. in Hong Kong. The devices are then imported for sale in the United States
“ZTE Corp. should reasonably be aware that the accused products are in fact being sold by retailers in Texas,” Lynn said.
She acknowledged that the burden of defending a lawsuit in the United States is “significant for a foreign corporation.”
“However, ZTE Corp., fails entirely to recognize the substantial interests of Texas and the United States in enforcing federal patent laws,” Lynn said.
She also noted that ZTE fails to recognize Seven Network's “interest in avoiding having to relitigate the alleged infringement of U.S. patents in a foreign tribunal based on the same underlying facts.”