A Galaxy banner hangs above the Samsung Electronics Co. stand near to the Huawei Technologies Co Ltd. in Barcelona, Spain. (Photographer: Pau Barrena/Bloomberg)

Huawei Can't Block Samsung China Manufacturing, Judge Says

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(Bloomberg) -- Samsung Electronics Co. can continue manufacturing and selling smartphones in China while it battles Huawei Technologies Co. over patent royalties, a U.S. judge ruled.

The order by a federal judge in San Francisco blocks Huawei from enforcing a decision by a Chinese court, which ruled Samsung is infringing two Huawei patents.

In January, the Intermediate People’s Court of Shenzhen barred Samsung affiliates from manufacturing and selling the company’s 4G LTE standardized smartphones in China. Samsung is appealing. But the U.S. judge said the Chinese ruling can’t take effect until he rules on a breach of contract claim filed in San Francisco.

China is the world’s biggest smartphone market. Samsung has argued that if the ruling banning the sale of LTE-enabled phones stands, it will have to close its factories in China. Huawei is China’s biggest maker of phones and network gear, while South Korea-based Samsung is the world’s largest maker of smartphones and semiconductors.

The order from the Chinese court “could render meaningless the proceedings here, and the risk of harm to Samsung’s operations in China in the interim is great,”’ U.S. District Court Judge William H. Orrick wrote in Friday’s ruling.

Michael J. Bettinger, a lawyer for Huawei in San Francisco, didn’t immediately respond to a call and an email on Monday seeking comment on the ruling.

The case is Huawei Technologies Co. v. Samsung Electronics Co., 16-cv-02787, U.S. District Court, Northern District of California (San Francisco).

©2018 Bloomberg L.P.

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