The world's largest chipmaker Intel has been charged with illegal technology monopoly and impeding technology development by a Chinese firm.

Beijing Donjin Xinda Technology Co Ltd, a wholly owned subsidiary of Shenzhen Donjin Communication Technology Co Ltd, has sued Intel for allegedly violating relevant Chinese laws including the TRIPS (trade-related aspects of intellectual property rights) agreement of the World Trade Organization and the Contract Law.

The case was accepted on April 1 by the Beijing No.1 Intermediate People's Court, which has served a summons on Intel's headquarters in the United States.

The Chinese company's argument centers on an allegation that the protocol of Intel's Inter Dialogic Systems Release 5.1.1 software (SR5.1.1) has strictly restricted its users by binding the software to the company's own hardware products. In other words, Intel's customers cannot use hardware produced by a third party.

Zhang Suzhen, marketing director of Shenzhen Donjin, said Intel's alleged action has formed a technology monopoly, going against the interests of consumers and stifling fair competition.

"We are seeking a judgment that Intel's monopolistic protocol is invalid," said Zhang.

The firm's lawyer, Jiang Hongyi, said the result of legal action against Intel will directly affect the verdict of a running lawsuit brought by Intel in December 2004.

Intel has accused Donjin of allegedly copying the patented header files from its software SR5.1.1 used in circuit boards running touch-pad telephone systems at the Shenzhen Intermediate People's Court.

This case hinges on a dispute over the compatibility of some of Donjin's products with Intel's software, and over whether users of Intel's communications cards can switch to Donjin's products without needing to alter their existing programs.

Intel condemned this as illegal and has requested that the court slap a permanent injunction on Donjin prohibiting it from either the manufacture or sale of the products in question as well as compensation of US$7.96 million.

Donjin denied all Intel's allegations, defending their move as an act for the convenience of its customers.

The company said while continuously focusing on research and development, Donjin will pursue the legal route to protect itself.

Chinese legal professionals believe these lawsuits will be a valuable lesson for China's fledgling intellectual property rights (IPR) system and anti-monopoly regulation, which is currently in the pipeline.

Zhang Ping, an associate professor of IPR protection at Peking University, was quoted by Beijing Youth Daily as saying that cases involving compatibility that are often encountered by high-tech enterprises in China should serve as a warning to relevant departments to implement anti-monopoly laws as soon as possible.

Zhang argued that to avoid being damaged by multinationals, Chinese high-tech companies should speed up technology innovation, creating more products with their own intellectual property rights.

(China Daily April 5, 2005)