A Xiaomi company's logo is pictured during a presentation to celebrate the entry of the company into the Mexican market, in Mexico City, Mexico, May 9, 2017.REUTERS/Edgard Garrido
  • Coolpad has sued Xiaomi over patent infringement in six of its smartphones
  • Coolpad is seeking a ban on Mi Mix, Redmi Note 5, Redmi Note 4X, Mi 6, Mi Max 2, Mi Note 3, Redmi 5 Plus and Mi 5X in China
  • Xiaomi could settle the lawsuit out of court as it approaches an impending IPO

Xiaomi has a robust smartphone portfolio that caters to the varying demands of consumers. The brand has grown to be a favourite among customers, so much that it has outgrown giants like Samsung and Huawei in China. But it looks like there's trouble in paradise.

Coolpad, which competes against Xiaomi with similar budget-friendly smartphones, is now challenging its rival legally. Coolpad has filed a lawsuit against Xiaomi through its subsidiary Yulong Computer Technology, seeking a ban on popular Mi smartphones.

According to a report by MyDrivers, Xiaomi is being sued for patent infringement, about which Coolpad had reportedly informed Xiaomi in January regarding "Method for Implementing Call Record Interface System of Multi-Mode Mobile Communication Terminal," app icon management, notifications, and system UI. Xiaomi denies receiving any court papers regarding the lawsuit.

According to Coolpad's announcement about the lawsuit, the company is demanding a ban on six Xiaomi smartphones, including Mi Mix, Redmi Note 5, Redmi Note 4X, Mi 6, Mi Max 2, Mi Note 3, Redmi 5 Plus and Mi 5X. In addition, the company wants Xiaomi to bear any economic losses caused due to patent infringement.

Xiaomi Redmi Note 5 (Redmi 5 Plus)
Xiaomi Redmi Note 5Redmi India (Twitter)

But this is not the first time we are hearing of Coolpad's intention to sue Xiaomi over alleged patent infringements. In January, Coolpad had filed a lawsuit against Xiaomi, naming four defendants including Xiaomi Communications Technology Co., Ltd, Xiaomi Technology, Co, Ltd, Shenzhen Tongtianda Electronics Co. Ltd, and the first branch of Xiaomi Co. Ltd Shenzhen.

The lawsuit was thought to be dead or settled out of court, but the emergence of it three months later suggests a whole new story. Coolpad CEO Jiang Chao had claimed that his company holds over 10,000 patents that many companies have infringed upon. It plans to sue them and Xiaomi is first in the line of firing.

But the timing of this lawsuit comes at a crucial time for Xiaomi, which is planning its IPO this month. The Chinese tech giant could raise up to $100 billion, according to some sources, making it the biggest IPO since Alibaba Group Holding's $25 billion debut in 2014. Considering this, it is possible Xiaomi could settle the lawsuit out of court to stay clear of any negative press.