Huawei Technologies Co., China's biggest technical contributor to 5G standards, is seeking to charge smartphone manufacturers royalties for access to its patented 5G technologies.
The Chinese telecom giant has announced, for the first time, royalty rates for the use of its 5G patents, stating that it will start to charge a "reasonable percentage rate" of the sales price up to $2.50 for every smartphone that can connect to 5G and previous generations of mobile networks.
This price is on the lower end compared to Huawei's major competitors in the 5G field, including Qualcomm, Nokia, and Ericsson.
Huawei founder Ren Zhengfei once revealed that his company's attitude towards 5G patents might become more aggressive.
"We have a lot of 5G intellectual property rights, but we have not yet asked many companies for money. The main reason is that we are too busy, and wait until we are not busy, we will start to collect this money, we may not ask for much, not necessarily as much as Qualcomm. Intellectual property is created by labor, and cross-licensing or mutual payment is necessary.
Many large companies pay Huawei a large amount of money every year, and the two sides have a confidentiality agreement. We can't tell you which company paid how much, but we will not weaponize 5G patents to inhibit the development of human society." Ren Zhengfei said in an interview with CGTN back in 2019.
Data from public channels show that over the last 3 decades, Huawei has paid more than $6 billion in patent fees, 80% of which have been paid to US companies. Meanwhile, the company invests 10% to 15% of its annual revenue in research and development, thus accumulating a valuable SEP ("Standard Essential Patent") portfolio.
So far, Huawei has conducted extensive cross-licensing negotiations with major patent holders in the ICT industry, and has signed more than 100 patent licensing agreements with major ICT manufacturers in the US, Europe, Japan and South Korea. According to Jason Ding, Huawei's head of IP, the company should earn about $1.2 billion to $1.3 billion from its intellectual property rights between 2019 and 2021.
GreyB, an intellectual property research organization, estimates that Huawei's number of active 5G SEPs exceeds that of its competitors, accounting for approximately 18.3% of Huawei's 5G patent family.
Regardless of the challenges of doing business in the US and some other countries, Huawei has demonstrated to the world its confidence and determination to compete in the 5G arena in accordance with international rules.
Huawei's experience in the 5G field shows that the accumulation and value realization of patents is a long process that requires patience and determination.
On the other hand, only by persisting in research and innovation, protecting intellectual property rights, and playing in accordance with international rules, Chinese tech companies can gain a foothold in the global marketplace.
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