Huawei could be barred from selling its smartphones - including its Honor-branded devices - in the UK as a result of a three-year legal battle with California-based patent owner Unwired Planet, formerly Openwave.
Unwired Planet is demanding royalty payments related to 4G technologies used in Huawei devices.
Huawei had sought to only license patents applicable to the UK, and argued that Unwired was in breach of intellectual property law by not complying with such a deal.
On Wednesday, the High Court of England and Wales ruled that the Chinese firm should pay Unwired Planet a global licence fee for the patents, dismissing Huawei's claims that payments should only apply to the UK. It ruled that Unwired Planet is not in breach of intellectual property law and can license its patents on a global basis.
Justice Birss ruled that royalties based on global sales would be "fair, reasonable and non-discriminatory" (FRAND) and proposed a rate of between 0.03 per cent and 0.06 per cent of handset sales.
However, the rates proposed by the Court is far lower than the rates that Unwired was demanding, which has been welcomed by Huawei.
A spokesperson for the company said in a statement: "We welcome the decision by the Court that Unwired Planet's royalty rate demands have been found to be unreasonable.
"Huawei is still evaluating the decision as well as its possible next steps. Huawei does not believe that this decision will adversely affect its global business operations."
EIP Legal, which represents Unwired Planet, suggested that Huawei ought to proceed with caution as it still faces the prospect of a smartphone sales ban in the UK.
"The latest judgment, which sets out the basis on which Unwired Planet will be compensated for Huawei's past infringements, also makes clear that unless Huawei agrees to enter into a worldwide licence for Unwired Planet's patent portfolio, Huawei could be injuncted from selling its mobile telephones in the UK," it claimed in a statement.
A formal decision on the injunction is expected to be heard in the next few weeks.
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