DT Mobile files 680.5 million RMB lawsuit against Spreadtrum

CICT Mobile announced on November 3 that its wholly-owned subsidiary, DT Mobile, has filed a lawsuit against Spreadtrum Communications with the People's Court of Haidian District, Beijing. The lawsuit concerns a technical cooperation and development contract dispute worth 680.5 million RMB. The court has also granted DT Mobile's request for property preservation.

The announcement detailed that DT Mobile and Spreadtrum had entered into several cooperation agreements and supplementary agreements for the development of TD-SCDMA terminal-specific chips and related terminal modules. DT Mobile fulfilled its contractual obligations, leading to the successful development of the chips and modules. However, despite selling the jointly developed products, Spreadtrum failed to pay DT Mobile the agreed-upon base royalty fees and upper protocol stack royalty fees.

As a result, DT Mobile is seeking to recover the unpaid fees and liquidated damages accrued from January 1, 2013, onwards. The total claim amounts to 680.5 million RMB. Additionally, DT Mobile is requesting that Spreadtrum cover all litigation costs.

CICT Mobile noted that while the case has been accepted and a property preservation ruling issued, the court has not yet held a hearing. Consequently, the impact on the company's current or future profits remains uncertain and will depend on the final court judgment.

DT Mobile, established in 2002, is the pioneer of China's independently developed third-generation mobile communication standard, TD-SCDMA. Spreadtrum Communications, founded in 2001 and a subsidiary of UNISOC, specializes in the development of mobile phone chip platforms.

The dispute between DT Mobile and Spreadtrum is not new. In 2011, DT Mobile filed for arbitration with the Beijing Arbitration Commission to claim overdue payments of base royalty fees and upper protocol stack royalty fees from Spreadtrum, but the request was denied. In 2015, DT Mobile took the matter to the Beijing Intellectual Property Court over the same issue and won the case, with the court ruling that Spreadtrum must pay the related fees amounting to  approximately 537 million RMB.