American semiconductor chipmaker Qualcomm has announced that it has signed a new patent licensing agreement with Chinese technology company Xiaomi. As per the terms of the deal, Xiaomi will develop, manufacture and market devices with 3G and 4G wireless technologies that are currently patented by the American chipmaker. According to the press release from Qualcomm, Xiaomi will pay royalties to Qualcomm that are “consistent with terms of a rectification plan submitted by Qualcomm to China’s National Reform and Development Commission (NDRC)”. It bears mentioning that back in February this year, Qualcomm and the NDRC had reached a resolution regarding the commission’s investigation of the American company under China’s Anti-Monopoly Law. As per the terms of that settlement between Qualcomm and the Chinese regulatory authority, the San Diego, California-based chipmaker was required to offer licenses for its current 3G and 4G patents separately from licenses to its other patents.
Both companies have expressed satisfaction at the signing of the deal and have expressed hope that the agreement will help both parties going forward. According to a statement from the CEO of Xiaomi, Mr. Lei Jun, “Xiaomi prides itself on embracing and leading smartphone innovation through its popular line of Mi devices. A license from Qualcomm will play an important role in helping us bring the newest and most innovative products to our growing customer base”. As for Qualcomm, the company’s President, Mr. Derek Aberle said, “Qualcomm is committed to the success of its partners in China as they continue to grow their businesses and we are pleased to reach this new agreement with Xiaomi. We work closely with our partners, such as Xiaomi, to push the boundaries of what’s possible and drive the advancement of the mobile industry”.
The new licensing deal will help Xiaomi as it is looking to move beyond the confines of its national boundaries over the past couple of years. The company is already barred from launching Mediatek-powered devices in India on account of a long-standing legal dispute with Ericsson, and that last thing it would have wanted was further litigation that would have prevented it from doing business in Western markets with tougher IP (Intellectual Property) laws, as it prepares to launch its smartphones in the US and Europe, at some stage in the near future.