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Innofidei fails to upset CMMB status quo with dubious legal claims

A legal battle over mobile TV technologies spilled out of China and into the US courts in October when Siano Mobile Silicon of Israel filed an action

By PETER WHITE

Published: 25 November, 2010

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A legal battle over mobile TV technologies spilled out of China and into the US courts in October when Siano Mobile Silicon of Israel filed an action in the US District Court for Northern California, against the Innofidei CEO Tom Zhang and CTO Stanley Wang.

The dispute began in China when Innofidei began a smear campaign against Siano, frustrated that it has managed to snatch the majority market share in the growing CMMB mobile TV chip business there. Our spies in China tell us that Innofidei was telling major customers, even China Mobile, that it was planning an intellectual property legal action against Siano, and that any handset vendor using the chips would be politically “disadvantaged.”

Such a case raises many questions. How can a non-Chinese company defend itself against claims made in China and whether or not such campaigns would have any effect in the market place. In China every company has to have a card carrying government member on its board, keeping an eye on the political correctness of the company under Chinese law. Get the wrong side of such a character and you can lose your license to carry out business.

Well the action in the US brought by Siano was firing a shot across the bows of its investors more than the company itself. Innofidei took $10 million from BlueRun Ventures in California in 2007 to fund R&D.

Although Innofidei is headquartered in Beijing it has offices in Silicon Valley and although it claims to be the first company with a CMMB chip, the truth is that Sinao has trials working in 2006, and that Innofidei initially came to market with a two chip system, one tuner and a separate demodulator and only later in 2008 introduced a single chip version, reported at first as large and running too hot for phones. We’re sure it has moved on since then but it’s not ahead of the pack.

By contrast Siano dropped CMMB onto its existing 7mm x 7mm chip format that already supported lots of non-Chinese mobile TV systems – DVB-H, DVB-T, T-DMB, and ISDB-T. It has since moved into the ATSC M/H market in the US.

It’s hard to know for sure, because neither company wants to talk to us about this right now, but it looks unlikely to us that this was anything other than a smear campaign and neither company is old enough to have many established defendable patents of their own, though they will have some applied for. But 5 years ago in China such campaigns, even when not based on fact often worked, but this is a tactic which has become overused and now local Chinese firms are wary of it.

This has been borne out with this month’s new handset design wins at China Mobile, which specified CMMB for 12 new models.

Here the market was effectively carved up by the single buyer across a handful of handset manufacturers using CMMB chips from Siano, Innofidei and Shanghai firm Spreadtrum, which came into the market with a chip in May 2008.

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