Huawei 2012 Annual Report Download - page 77

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Consolidated Financial Statements Summary and Notes 74
royalty rate licensed to Huawei Tech for IDC’s
Chinese essential standard patents in wireless
communication should not exceed 0.019%
of the actual sales prices of Huawei Tech’s
wireless devices.
The hearing of the first complaint filed by IDC
with the USITC was scheduled for mid-February
2013 and the initial determination and final
determination are expected to be available
in June 2013 and October 2013, respectively.
This ruling will have an impact on the Group’s
exportation and sales of certain 3G wireless
devices in the United States.
At this stage, the Group is unable to predict the
outcome of this case, or reasonably estimate a
range of possible loss, if any, given the current
status of the litigation.
ii) On July 24, 2012, Technology Properties Limited
LLC (“TPL”) filed a complaint with the USITC,
requesting the Commission to commence an
investigation under Section 337 of the Tariff Act
of 1930 to certain wireless consumer electronics
devices and components manufactured by
thirteen alleged companies and their affiliates
by reason of patent infringement and requested
for issuance of exclusion order and cease and
desist order against the accused electronic
products. Huawei Tech has been named as one
of the thirteen respondents. On August 21,
2012, the USITC decided to institute Section
337 investigation against the accused electronic
products. The USITC investigation is currently
on-going. TPL filed another complaint before
the United States District Court for the Northern
District of California for the same reason. The
Group believes the claim by TPL is without merit
and will defend this action in accordance with
the provisions of law to safeguard the legitimate
rights and interests of the Group.
iii) On February 22, 2012, Creative Technology Ltd.
and its subsidiary, Qmax Communications
Pte. Ltd. (“Creative”), filed a lawsuit against
Huawei International Pte. Ltd., a wholly-owned
subsidiary of the Company and asserted a
claim for misrepresentation and breach of
contract for approximately CNY120 million. In
March 2012, the Group filed a counter lawsuit
against Creative and demanded a claim of
approximately CNY50 million for breach of
contract as well as unreasonable and unilateral
termination of contract. This case is currently at
the preliminary stage of exchanging documents
and pre-trial conference. The Group believes
the claim by Creative is without merit and will
defend this action vigorously.
23. Operating leases
(a) Leases as lessee
Non-cancellable operating lease rentals are payable as follows:
2012 2011
CNY’million CNY’million
Less than one year 472 364
Between one and five years 577 410
Above five years 58 –
1,107 774