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Huawei is currently the world’s largest 5G patent owner with 20% of global patents
Chinese tech giant Huawei has signed a deal with Sweden’s Ericsson to renew their patent cross-licensing agreement.
The deal, which was last renewed in January 2016, allows each company to access each other’s patented technologies deemed vital to product standards set by 3GPP, ITU, IEEE, and IETF, covering 3G, 4G, and 5G cellular technologies.
“We need to pay Ericsson and Ericsson need to pay Huawei, so there is some net payment from one company to the other company,” explained Emil Zhang, Head of European Intellectual Property Rights (IPR) at Huawei.
Financial details of the deal have not been disclosed.
“This agreement demonstrates the commitment of both parties that intellectual property should be respected and rewarded, and that leading technological innovations should be shared across the industry,” said Christina Petersson, Ericsson’s Chief Intellectual Property Officer.
“We are delighted to reach a long-term global cross-licensing agreement with Ericsson,” said Alan Fan, Head of Huawei’s Intellectual Property Department.
“As major contributors of standard essential patents (SEPs) for mobile communication, the companies recognize the value of each other’s intellectual property, and this agreement creates a stronger patent environment. It demonstrates the commitment both parties have forged that intellectual property should be properly respected and protected.”
Under the agreement made in 2016, Huawei would make “ongoing royalty payments” to Ericsson based on the sale of products using the Swedish vendor’s patents.
Today, Ericsson says the new deal will contribute to it increasing its IPR revenues for 2023 to approximately SEK 11 billion ($1 billion). Huawei, similarly, has been a major contributor to mainstream ICT standards for over 20 years, including cellular, Wi-Fi, and multimedia codecs. Last year, the company filed 4,505 patents to the European Patent Office, the most of any company.
Patent licencing is a major revenue stream for the company, which reportedly made between $1.2 billion and $1.3 billion from licencing between 2019 and 2021. Since then, the company has only increased its research efforts, claiming to have spent $125 billion on R&D in the last decade.
This revenue stream has not been without controversy, however. Back in May, it was announced that US-based network equipment maker ADVA Optical Networking would sue Huawei for charging “grossly excessive” fees for the use of their intellectual property , and asking ADVA to pay for patents not required by international standards. ADVA argue that Huawei is using its dominant position in the IP area to apply disproportionate influence over the market.
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