Huawei's $1 billion patent demand from Verizon is not ransom money (results)

Huawei's $1 billion patent demand from Verizon is not ransom money (results)
image: Xinhua

In light of the revelations that Huawei's patent licensing chief has sent a letter to Verizon asking for a cool $1 billion in exchange for granting access to the company's 4G/5G network and other patents, we asked you who's in the right. Almost three quarters of our respondents give the benefit of the doubt to Huawei, with the big caveat that the patent filings are applicable to the technology Verizon uses now, and the eventual patent pricing is deemed fair if this thing goes to court. 

Is Huawei in its right to demand patent licensing from Verizon?

Yes, if the patents are applicable and the amount is reasonable
73.36%
No, it's just a tactic in the ongoing trade conflict with China
15.67%
It's too early to tell
10.97%

If you didn't know that Verizon owns money to Huawei for patent licensing, you do now. According to the Wall Street Journal, Huawei has sent a letter to America's largest carrier, requesting payment for more than 200 individual patents that it holds. The patents in question stem from base networking gear, through IoT technology, to wired connectivity, and representatives of the two company have reportedly been meeting in New York to discuss further actions on the request.

Additionally, Reuters filled in the blanks regarding the exact number of patents, and the initial amount that Huawei demands as licensing fees. It turns out that there are more than 230 granted filings that Huawei thinks are currently being infringed by Verizon, regardless of the fact that it doesn't use Huawei gear. Remember, the patents refer to "core" network equipment which may include base stations, signal routing and a bunch of technologies that form the backbone of carrier networks. 

Speaking of carriers, Reuters probed AT&T, T-Mobile and Sprint whether they had received the same licensing request from Huawei, but they have declined to respond. T-Mobile is using some Huawei networking equipment, though it argues that it's not in the core of its network. For rural areas, in particular, the affordable and capable Huawei gear is hard to find an alternative to. 

As far as the patent licensing fee, it's no chump change. Huawei is reportedly asking for over $1 billion to fork over the rights to use its intellectual property, though it is not clear whether that is just for licensing the existing patents, or also for some kind of a compensation in foregone royalty fees, in case that Verizon and perhaps the other US carriers, have been using Huawei's technology in question for a while. 

While Verizon is forbidden to use Huawei networking and other equipment due to the ongoing tech cold war between US and China, it may not able to avoid using Huawei's intellectual property in its network, given that Huawei has a year or so lead in 5G before the competition, to say the least. If it is related to their nascent 5G networks, this could complicate the rollout in the US, which could be another bargaining chip for Huawei and China in the quest to settle the trade dispute with the US.

The head of Huawei's intellectual property licensing department has reportedly sent a letter asking Verizon to resolve the issue, pricing the patents at over $1 billion."We trust that you will see the benefit of taking a license to our patent portfolio," the letter reads which sounds like something from a Better Call Saul episode and smells like a legal dispute may be brewing on the horizon. Indeed, a Verizon spokesman declined to comment on the report with the following:


The request could potentially put Verizon in a pickle, and may even be designed to do so. The US is accusing Huawei in intellectual property infringements, and the Chinese are trying to turn the table with this patent licensing request. If Verizon refuses to pay citing that the patents are not applicable, or the amount requested is beyond their value, China could use this as argument fodder in any subsequent trade negotiations or court hearings. Carriers other than Verizon have declined to comment, but we wouldn't be surprised if Huawei has sent them similar licensing demands as well.

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16 Comments

1. jacky899

Posts: 398; Member since: May 16, 2017

Man imagine if it was the other way around and Huawei was the one infringing on 200+ patents. Infact even if Huawei was infringing on a single patent, there would be media uproar exagerrating the case a thousand times. Personally I hate patent trolls but we shouldnt have double standards.

4. dimas

Posts: 3291; Member since: Jul 22, 2014

Well, huawei's been reverse engineering most western technology for years so those patents they boast actually came from western technologies. They've been cloning phones and eavesdropping on their business partners for years so I don't think these patents really came from their own research team.

6. shm224

Posts: 261; Member since: Mar 19, 2015

wtf? Huawei has refused to pay royalties for QCOM's 20+K patents for years and there was hardly anyone making a fuss about it. Further, the Commie Chinese gov't forces a steep 50% discount on royalties wireless companies normally collect from Chinese domestic wireless device makers, like Huawei. Where is the uproar there? The US should impose a 50% reduction on patent royalties collected from US domestic companies, just like the commie China has been doing for years.

2. Venom

Posts: 3114; Member since: Dec 14, 2017

Huawei is pulling a BlackBerry with patent trolling.

3. jacky899

Posts: 398; Member since: May 16, 2017

But if it was the other way around, it would not be patent trolling and Huawei would be crucified for ip theft even if they used just one patent instead of 200+. You have to understand Huawei spent an enormous amount in R&D to invent these patents. Huawei is known as the biggest contributor to the development of 5G tech worldwide. Their R&D budget is much higher than Apple's despite their annual profit is a tiny fraction of Apple's profit. Trump last year claimed on the news that Huawei's entire 5G tech was stolen from the hard work of US companies despite the world outside of the US knows Huawei is at least 18months ahead of the US in 5G tech. If US companies can just use Huawei's hard work for free, then it is actually US companies stealing from Huawei's hard work. Such irony.

5. dimas

Posts: 3291; Member since: Jul 22, 2014

R&D my ass. They get western technologies then just copy whatever they can extract from it. Huawei mate x is the obvious product, they launched it alongside galaxy fold which is a very confidential project. No more chinese branded phones for me, I will just stick with samsung, asus and apple.

7. jacky899

Posts: 398; Member since: May 16, 2017

That's exactly what Trump saud about Huawei's 5G tech but he recently adnitted on the news that Huawei is much ahead of US companies and US companies need to work hard to catch up. Basically all these baseless accusations without any need for evidence.

9. mootu

Posts: 1411; Member since: Mar 16, 2017

And just how did they steal what others havn't invented yet?, you are starting to sound like Peaceboy. Huawei spent $15 billion on R&D in 2018, this year they are spending $20 billion making them the worlds largest R&D spenders. Most phone OEM's licence patents from Huawei, Samsung does and Apple currently pay Huawei around $1 billion a year to licence 760 patents. As for your comment on the Mate X and the Fold they are nothing alike, the only thing they have in common is a foldable screen.

13. mahalo15

Posts: 66; Member since: Nov 30, 2018

Huawei is not even in top 25 in R&D spend. They are not a publicly listed company and therefore don't get independently audited and scrutinized. They can make whatever claim they want but it would just be a claim.https://www.strategyand.pwc.com/innovation1000https://www.statista.com/statistics/265645/ranking-of-the-20-companies-with-the-highest-spending-on-research-and-development/

8. shm224

Posts: 261; Member since: Mar 19, 2015

Apple is known for their high profit, not for R&D -- most big tech companies, from Google, to MS, to IBM, to Samsung all outspend Apple on R&D spending. It's also fairly widely known that Chinese companies, including Huawei, have openly stolen US IP with support of their gov't turning a blind eye or with zero infringement enforcement for domestic companies. I'd say, let's reciprocate the favor by invalidating all their patents, or impose an absurd 50% royalty fee cut for any royalty demand by Chinese companies.

10. mootu

Posts: 1411; Member since: Mar 16, 2017

Go ahead invalidate Huawei patents, then it will be total free for all. China would just completely ignore every patent ever made and undercut the US on just about everything.

14. shm224

Posts: 261; Member since: Mar 19, 2015

wake up buddy, The commie China has already been ignoring everyone else's IP for decades .

11. jacky899

Posts: 398; Member since: May 16, 2017

Again which specific tech did Huawei steal? The fact is Huawei have been sued in court (where evidence actually matters) far less and for much lesser value lawsuits and found guilty far less for IP theft than any other large companies including Apple, Intel, Microsoft, Samsung, Nvidia, etc. E.g., Certain Iphones are being banned from Germany and software required to be updated to remove Qualcom IP in China. Samsung have been frequently sued for stealing from others. www.androidauthority.com/samsung-nucurrent-lawsuit-846179/

15. shm224

Posts: 261; Member since: Mar 19, 2015

Why do you think Huawei has limited presence in the US? or Huawei executives have been avoiding the US all these years? It's not only because of China's blatant violation of US export law or international sanction; you can't sue Huawei in the US if they don't have presence in the US or the executives responsible for their sales practices aren't in the US. Or that the Chinese court don't honor IP laws in China. Further, the commie China frequently demand foreign companies drop lawsuits against Chinese domestic companies as a precondition for granting access to their market. In one instance, China's NDRC, antitrust authority, claimed they had "massive evidence" of price-fixing against two South Korean DRAM makers, Samsung and SK Hynix. But having unable to find any antitrust violation, they came up with a fictitious violation of product-tying and threatened the two companies to drop all existing/future lawsuits against Chinese domestic companies in exchange for dropping a multibillion dollar fine for a violation that didn't exist.

16. jacky899

Posts: 398; Member since: May 16, 2017

LOL!!!! Huawei tried very very hard to enter the US market with their phones but was shot down by the US gov due to spying allegations with zero evidence to back it up. The only mass spying campaign with Huawei equipment was operated by the NSA. The NSA stole Huawei's source code and planted backdoors in Huawei equipment that was used to spy on everyone and any country using Huawei equipment to conduct covert operations and malicious activities to governments, civilian facilities including hospitals, and businesses as leaked by Edward Snowden. The US have been using Huawei network gear on large scale.https://www.phonearena.com/news/Huawei-equip​​ment-rural-carriers-T-Mobile-coverage_id116336 Read before you just make things up like Donald Trump, who first claims Huawei's 5G was stolen from US companies and then recently admitted US companies are much behind the Chinese in 5G tech and the US gov will help them catch up. Also Huawei products is sold world wide and is big in Europe. So you by your logic, Europe also don't honor IP laws because Huawei haven't gotten into trouble there for IP infringements. In fact, Huawei is currently crowned the patent king in Europe, filing the most patents. They are also hailed the biggest contributor to 5G tech and holds the most 5G patents. Huawei's R&D budget was the third largest in the world last year and will be the largest in the world this year.

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