Chinese tech giant Huawei Technologies has forged a fresh agreement with Swedish counterpart Ericsson, granting the two companies reciprocal rights to utilize each other's cellular technologies in network equipment and consumer devices.
The deal underscores Huawei's ongoing efforts to monetize its patent portfolio. Under the pact, essential patents for 3G, 4G, and 5G technologies on a global scale will be covered. The agreement was described as long-term, though specific duration details were not disclosed.
Huawei announced the new patent cross-licensing agreement on Friday, highlighting the significance of the partnership in reinforcing a favorable patent environment. Alan Fan, Head of Huawei's Intellectual Property Department, emphasized, "As major contributors of standard essential patents (SEPs) for mobile communication, the companies recognize the value of each other’s intellectual property."
Ericsson echoed a similar sentiment in its separate statement, characterizing the renewed deal as indicative of a commitment to respecting and rewarding intellectual property. Christina Petersson, Chief Intellectual Property Officer at Ericsson, underlined that the agreement signifies the sharing of technological innovations across the industry.
Ericsson anticipates that its IP licensing revenue for 2023 will reach around 11 billion krona (approximately US$998 million). This renewed agreement builds upon previous licensing agreements between the two telecommunications giants, which include ongoing royalty payments based on actual sales of products incorporating each other's patents.
The partnership comes in the wake of Huawei's challenges, including being placed on the US Entity List in 2019, which curtailed its access to advanced technologies and led to a decline in its handset sales. Huawei's move to release its patent licensing rates, including for crucial communication technologies like 4G and Wi-Fi 6, demonstrates its strategy to enhance its patent portfolio to offset declining sales in other sectors.
Emil Zhang, Head of the European IPR Department at Huawei, emphasized that the company's focus is not solely on royalty income but on the recognition of its innovation. Zhang highlighted that the new agreement with Ericsson underscores the importance of innovation amidst changing global dynamics.
"The long-term deal will provide more business certainty for the companies and eventually for the downstream customers including carriers and end users," Zhang said, emphasizing the potential benefits that this collaboration will bring to the broader industry.
Huawei, initially founded in 1987, made its mark by offering competitive pricing in the telecoms hardware space. As the tech landscape evolves and Chinese companies face increased scrutiny abroad, Huawei's patent holdings could potentially play a pivotal role in sustaining the company's research and development efforts amidst shifting market dynamics.
The newly inked agreement between Huawei and Ericsson signifies a mutual recognition of the value of intellectual property and technological innovation. Amidst challenges posed by geopolitical tensions, this partnership highlights the importance of fostering collaboration and maintaining a favorable environment for innovation to thrive.
By fLEXI tEAM