Patent suits pile on before Xiaomi IPO

Chinese smartphone maker Xiaomi hit yet another roadblock ahead of its blockbuster IPO. An individual named Yuan Gongyi (袁弓夷) is suing the company for infringing on his patent, asking for an indemnity of RMB 50 million ($7.5 million), local media is reporting.

According to Yuan, the Chinese patent ZL00800381.5, named Common Packet Channel, has been infringed upon. The original holder of this patent is a US company and it was transferred to Yuan on December 8, 2016.

The lawsuit was filed at the Beijing Intellectual Property Court and would affect up to twelve Xiaomi phones from Xiaomi 5X  all the way through to Xiaomi Note 3. According to the plaintiff, the patent could be applied in several telecommunication standards prescribed by 3GPP (The 3rd Generation Partnership Project), such as WCDMA, TD-SCDMA, HSPA, and LTE.

The lawsuit adds up to a series of blows to Xiaomi’s blockbuster IPO. On May 4, Xiaomi’s long-term rival Coolpad Group filed a patent infringement case against Xiaomi with a court in Shenzhen of Guangdong Province, one day after Xiaomi submitted its IPO prospectus. Coolpad claimed at a news conference on May 11 that they have filed seven patent complaints against Xiaomi.

Xiaomi, which is expected to become the first company to issue a Chinese Depository Receipt, abruptly postponed its plan on Mainland China’s stock exchanges last month. With a handful of existing problems, patent lawsuits, which usually have an effect on a business’s sustainable profitability, would add more uncertainties to Xiaomi’s IPO.