The share price of the H shares of ZTE Corporation (SHA:000063, HKG:0763) fell over 10% yesterday amid market rumours that ZTE has lost the patent lawsuit with Telefonaktiebolaget LM Ericsson (publ) (Ericsson), such that ZTE will have to pay Ericsson an annual patent license fee of EUR150 million in addition to a substantial indemnity of EUR500 million payable to Ericsson.

ZTE has clarified that the rumours were in gross contradiction to the facts. ZTE and Ericsson have conducted extensive discussion and consultation in respect of the patent matters involved in the aforesaid litigation, and the two parties have agreed to withdraw all patent infringement litigations against each other, including the patent infringement lawsuits filed by Ericsson against ZTE in the United Kingdom, Germany and Italy, as well as the patent infringement lawsuit filed by ZTE against Ericsson in the PRC.

Currently, the legal counsels of the two parties have submitted applications to the courts concerned for the withdrawal of the lawsuits, pending withdrawal rulings to be made by the respective courts.