As it prepares to file an initial public offering (IPO) in Hong Kong, Xiaomi has been named in a patent dispute in China by its rival Coolpad for three successful smartphone models -- Mi Mix 2, Redmi Note 5 and Redmi 5 Plus.
In a regulatory filing, Hong Kong-listed Coolpad's Yulong unit has initiated a patent infringement case against Xiaomi with the Jiangsu Province Nanjing Intermediate People's Court, the South China Morning Post reported on Friday.
"Beijing-based Xiaomi has requested the Patent Re-examination Board, under China's State Intellectual Property Office (SIPO), to invalidate three patent rights that Coolpad had claimed were infringed by the world's fourth-largest smartphone supplier," the report added.
The complaint alleged that Xiaomi had used the patents without any license from Yulong.
Coolpad also requested the court to order Xiaomi to pay "for the economic loss suffered" by Yulong and all litigation expenses.
According to a Xiaomi statement, it was made aware of the Yulong lawsuit after Coolpad filed a motion before the Shenzhen Intermediate People's Court regarding the alleged patent infringements.
The lawsuit comes at a time when Xiaomi has officially filed for an IPO in Hong Kong that aims to raise $10 billion in a sale that may value the company at $100 billion.
At $10 billion, Xiaomi's IPO would also be the 15th biggest of all time, or the fourth-largest in Hong Kong.
According to the regulatory filing with the Hong Kong stock exchange, Xiaomi also reported a revenue of $18 billion and a gross profit of $2.3 billion in 2017.
The company is currently at the fourth position in the smartphone market globally, behind Samsung, Apple and Huawei.
In the first quarter of 2018, Xiaomi with over 51 per cent growth was at fifth spot in China, Counterpoint Research reported. Xiaomi was the fastest growing brand in China during the quarter.
On the other hand, Coolpad is set to make a comeback with a new line-up of smartphones and accessories for the Indian market.
In January, the Shenzhen-based handset maker bid adieu to its financially-troubled Chinese partner LeEco.
It later announced a fresh investment of $300 million from Power Sun Ventures, a family trust. Chinese property mogul Chen Hua, Founder, and Head of the Kingkey Group, is leading the new investment through Power Sun Ventures.