At the time of the Hong Kong IPO, Baiwei Storage’s “patent litigation battle” escalated again.
On the evening of April 8, Baiwei Storage announced that the company had recently received a "Response Notice" from the Nanjing Intermediate People's Court. Emtier Storage Technology (Shenzhen) Co., Ltd. (hereinafter referred to as "Emtier Company") filed a lawsuit with the court over two disputes over infringement of invention patent rights. The plaintiff requested compensation of 50 million yuan.
According to the announcement, this case is two new patent lawsuits based on the same patent package, involving eMMC standard products. As early as 2025, Emtier has initiated two invention patent lawsuits against Baiwei Storage, and the court proceedings have been opened in April this year. This new lawsuit means that the litigation tug-of-war between the two parties has intensified.
Regarding the new lawsuits, Baiwei Storage stated in the announcement that after preliminary assessment, the above-mentioned lawsuits will not have a significant adverse impact on the company's production, operations and financial status. At the same time, as of the announcement, the two lawsuits have not yet been heard.
For Baiwei Storage, this is a critical period.
This semiconductor memory company submitted a prospectus to the Hong Kong Stock Exchange in September 2025. It is still in the process of Hong Kong stock IPO, which is an important period for the impact of listing. At the same time, the patent lawsuit filed by Emtier targets Baiwei Storage's R&D capabilities and the "gold content" of its patents. This is a "cut to the core" accusation for the semiconductor industry, which already values these two elements.
In addition, according to the 2025 financial report data just released by Baiwei Storage, the company's net profit attributable to the parent company last year was 853 million yuan. According to the plaintiff's compensation amount of 50 million, it has exceeded 5% of the net profit attributable to the parent company last year. The potential risk is that if the plaintiff is supported, it will not be ruled out that other companies will also initiate compensation lawsuits against the patent, which will cause continuous erosion of the company's profits.
Behind the plaintiff lies an industry rival
Baiwei Storage is a well-known semiconductor storage company in China. It was founded in 2010 and is headquartered in Shenzhen. Its main business includes the research and development, production and sales of semiconductor memories. Its main products and services are semiconductor storage solutions and advanced packaging and testing services, which are used in servers/data centers, smartphones, tablets, computers and other industries as well as in the field of personal mobile storage.
The company will be listed on the Science and Technology Innovation Board at the end of 2022, and leading companies such as OPPO, VIVO, Lenovo, Meta, Google, Alibaba, and Xiaomi are its customers in different product fields. According to earlier financial report data, Baiwei Storage will only turn losses into profits in 2024, and will achieve revenue of 11.3 billion yuan and net profit attributable to the parent company of 850 million yuan in 2025, a profit increase of more than 465%.
It is worth noting that standing behind the plaintiff is Longsys, also a leading company in the semiconductor storage industry. The litigation "confrontation" during the IPO period will undoubtedly further intensify the competition between the two parties.
If you look through the equity of the plaintiff Emtier, you will find that this company has only two shareholders. Among them, the American company Memory Technologies LLC (hereinafter referred to as "MTL") holds 51% of the shares, and Shenzhen Anjiecun Electronics Co., Ltd. holds 49% of the shares.
Information shows that Shenzhen Anjiecun is a wholly-owned subsidiary of Longsys. In other words, the main party in the lawsuit against Baiwei Storage is Longsys's grandson company.
Baiwei Storage also mentioned in the announcement that MTL is marked as a Patent Assertion Entity (that is, a company that mainly obtains income through patent licensing or patent litigation) in patent litigation databases such as Unified Patents Portal. The company is in active licensing negotiations for the patent package held by MTL. During the negotiation process, the owner of a small number of patents in the patent package was changed to Emtier, the plaintiff in the above two cases.
A lawyer engaged in patent litigation in East China said that there are indeed some companies in the technology industry that hold patents that are relatively important or have relatively wide coverage in the industry: "As long as you are engaged in this industry, you cannot circumvent its patented technology. Therefore, many industry companies must obtain patent licenses from this company, or this company can obtain benefits through continuous appeals for compensation."
The specific patents involved this time are two patents in one patent package, both involving the expanded utilization area of storage devices. The original applicant of one of the patents was MTL, and the original applicant of the other patent was Nokia. Both were later transferred to Emtier, and the patent expiration dates are January 30, 2029.
This situation is similar to the lawsuit filed by Yuanxuzhi Technology (Shenzhen) Co., Ltd. (hereinafter referred to as "Yuanxuzhi Company") in June last year.
According to the announcement at the time, Yuanxuzhi also filed a lawsuit against Biwin Storage for two disputes over infringement of invention patent rights. The patents involved also involved Biwin eMMC products. The original applicants for the patents were Nokia Corporation, and were later transferred to MTL, Longsys Electronics (Hong Kong) Co., Ltd., and Emtier Corporation.
Two months before Yuanxuzhi filed a lawsuit against Baiwei Storage, Emtier had just signed a "Patent Implementation License Contract" with Yuanxuzhi, licensing the patent to Yuanxuzhi for use.
However, the expiration date of this patent is November 27 this year, and the time of prosecution is closer to the expiration date of the patent. At the same time, the amount of compensation requested by Yuanxuzhi at that time was 1.2169 million yuan, which was far lower than the amount of compensation demanded in the recent lawsuit.
This lawsuit was withdrawn in September last year, but not long after, Emtier again sued the court for the same invention patent dispute. The lawsuit was heard on April 2 and 3 this year.
Litigation directly hits the "vital gate" of listing
Regarding the impact of new lawsuits on the company, Baiwei Storage stated in the announcement that during the licensing negotiation process for the patents involved, the company always adhered to the FRAND principle (the principle of fairness, reasonableness, and non-discrimination), actively cooperated with the negotiations, showed full goodwill and willingness to cooperate, and made no obvious mistakes.
At the same time, the company believes that the amount of damages claimed by the plaintiffs in the two cases involved in this announcement lacks evidence support, and it is expected that the litigation will not have a significant adverse impact on the company's profits for the current and subsequent periods.
Baiwei Storage added in the announcement that the plaintiff's current compensation amount is 50 million yuan. According to the "Patent Law of the People's Republic of China", if the loss of the right holder, the benefits obtained by the infringer and the patent license fee are difficult to determine, the people's court can determine the compensation to be between 30,000 yuan and 5 million yuan based on factors such as the type of patent right, the nature and circumstances of the infringement.
In this regard, the above-mentioned intellectual property lawyer said that as for the amount of compensation for infringement of patent property rights, the court must first determine whether it actually constitutes infringement: "After determining the infringement, it also depends on the contribution rate of the infringing patent to the overall product, the duration of the infringement, and how much of the technology is publicly available on the market."
He also mentioned that if the defendant has benefited greatly from patent infringement, then it does not rule out the possibility of exceeding the 5 million statutory compensation amount stipulated in the Patent Law: "It mainly depends on how much evidence the plaintiff has."
Since Baiwei Storage is in the critical period of the Hong Kong IPO, it is being sued in court for patent infringement. Whether it will affect its listing process is also a matter of concern to the market.
Baiwei Storage emphasized in the announcement that the lawsuit will not have a significant adverse impact on the company's production, operations and financial status. However, a relevant person from the Securities Department also said in a reply to "21st Century Business Herald", "We still need to determine internally whether it will have an impact on Hong Kong stocks (IPO)."
The above-mentioned lawyer also mentioned that intellectual property rights such as patents are industry barriers for many technology companies and are also an important factor in being recognized by the capital market. If it does constitute infringement and the infringement is on a relatively important patent in its own business, the impact on the company to be listed will be quite "destructive".
But he also admitted that at this stage, technology companies are intensively listed and are the "sweet potato" of the capital market, so lawsuits against IPO companies are also relatively common.
It should be mentioned that Longsys, the plaintiff behind this lawsuit, and Baiwei Storage, the defendant, are both in the process of the Hong Kong stock IPO. Longsys submitted its application to the Hong Kong stock market in March last year, earlier than Baiwei Storage, but the materials had expired in September last year.
Interestingly, after the announcement of the lawsuit, Baiwei Storage's A-share stock price did not seem to be greatly affected. After a slight drop the day after the announcement, on April 10, affected by the general increase in the memory chip sector index, Baiwei Storage's stock price also rose by 6.15%. The stock price closed at 241.51 yuan per share, with a market value of 113.712 billion yuan. Longsys was affected by the same positive news, and its stock price also rose simultaneously. It closed at 341.3 yuan per share on April 10, with its total market value reaching 143.054 billion.
