Huawei starts charging royalties for use of its patented 5G technology
March 23, 2021 Category IT & Telecom, Weekly
Huawei will start charging royalties to 5G smartphone makers using its patented 5G technology, which will provide a “reasonable percentage royalty rate” of the handset’s selling price, with a per unit royalty cap at USD2.50. Amid declines in its other businesses due to U.S. sanctions, the firm said the revenue from the intellectual property rights (IPR) will not become its main source of income, as income from terminal products and services will still be its main focus area to generate profits. Jason Ding, Director of Huawei’s IPR Department, made the announcement when releasing a new white paper on innovation and IPR. Huawei is estimated to receive about USD1.2 billion to USD1.3 billion in revenue from patent licensing in the period 2019 to 2021, Ding said. Huawei Chief Legal Officer Song Liuping also said that Huawei will negotiate 5G patent royalties with firms including Apple and Samsung. Huawei’s intellectual property deployment plan is a global one, and it does not distinguish among countries, Song said. “The charge is just another normal approach as Huawei is now the largest 5G patent holder,” Jiang Junmu, Chief Writer at Chinese telecom industry news website c114.com.cn, told the Global Times.
Huawei has 3,007 declared 5G patent families, the most of any company in the world, according to intellectual property research organization GreyB. Qualcomm, Ericsson, Nokia, Samsung and other major patent holders have also benefited from patent authorizations and charged royalties. Compared with its counterparts, Huawei’s charge is relatively low. During the launch of the white paper, Huawei also reiterated its commitment to innovation amid an intense U.S. crackdown, while also again calling for cooperation and openness amid what it said was “fragmentation” in global standards. The new white paper focuses on Huawei’s history in innovation and IPR management prior to 2010, and includes data and milestones related to its investment and research and development (R&D), that goes back to the 1990s.
Huawei states in the paper that it has become one of the world’s largest patent holders through sustained investment in innovation. By the end of 2020, Huawei held over 100,000 active patents in more than 40,000 patent families worldwide. Huawei filed its first patent application in China in 1995, and its first patent application in the U.S. in 1999. In 2008, the World Intellectual Property Organization (WIPO) listed Huawei as No 1 in terms of the number of patent applications filed under the Patent Cooperation Treaty (PCT) for the first time. In 2019, Huawei ranked No 2 in Europe and No 10 in the U.S. in terms of the number of patents granted. Huawei is also the largest patent holder in China, the Global Times reports. From 2010 to 2019, Huawei spent about USD90 billion on R&D, according to the white paper.
Patent applications by Chinese companies in Europe rose 9.9% to a new high of 13,432 in 2020 despite disruptions caused by the Covid-19 pandemic, according to the European Patent Office’s Patent Index 2020. It was also the highest growth rate among the 10 leading patent-filing countries. U.S. companies filed 4.1% fewer applications in 2020 with a total of 44,293. The number of patent applications made to the EPO in 2020 was marginally fewer than in 2019, slipping by 0.7 percentage points to 180,250. The top three technology fields with the most patent applications from China were digital communications (26.5%), computer technology (11.6%) and electrical machinery, apparatus and energy (9.1%), the China Daily reports.
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