Mega patent holder Huawei stated to be placing licensing squeeze on SMEs

Chinese language telecoms big Huawei could also be trying to put the squeeze on small to medium firms for license charges on its sizeable patent portfolio as its backside line continues to be hit by US sanctions and different restrictions.

A report in Nikkei Asia claims that Huawei has approached about 30 small to midsize firms in Japan, apparently in search of license charges for utilizing its patented know-how. The transfer is being seen because the Chinese language firm trying to claw again a few of the income it has been shedding due to Washington’s crackdowns.

Nikkei states that the businesses in query are all concerned within the telecoms trade, and a standard thread seems to be that Huawei is in search of charges from producers that make use of wi-fi communication modules.

The corporate was one of many entrance runners within the improvement of 5G wi-fi know-how and holds various patents referring to it, but additionally holds various so-called standard-essential patents (SEPs) referring to widespread requirements corresponding to 4G and Wi-Fi.

It’s extremely uncommon for a serious producer to immediately negotiate with smaller firms in such a way, Nikkei notes. Sometimes, licensing charges for telecoms merchandise will probably be negotiated between massive producers, corresponding to a chipmaker that includes the know-how into its wi-fi silicon merchandise on the market to system makers, for instance.

Nevertheless, Huawei has been hit laborious by US-led sanctions, with its earnings reduce in half for the primary quarter of 2023, and could also be contemplating any means at its disposal to make up for the shortfall.

Earlier this 12 months, Washington put a halt on all American know-how export licenses to Huawei, depriving it of a spread of key smartphones elements from US producers corresponding to Qualcomm. The US has additionally been main a marketing campaign to have Huawei know-how blocked from the telecommunications networks of its allies in Europe and elsewhere, which has had a devastating impact on its backside line in nations such because the UK.

The transfer might have worrying implications if Huawei intends to increase this obvious concentrating on of small to midsize firms to different areas. Nikkei states that the corporate is believed to be stepping up royalty collections in Southeast Asia in addition to Japan.

The US can also be a goal. Earlier this 12 months, Alex Liang, a companion at AnJie Broad’s Beijing workplace, instructed CNBC that he believed Huawei was “aggressively pushing for the monetization of its patents.” Liang added: “It is likely one of the most necessary KPIs of their IP division, if not but the one most necessary.”

In 2022, Huawei filed a file variety of patent purposes with the US – 11,000, in response to numbers supplied by IFI Claims Patent Companies.

We requested Huawei if the experiences have been correct, and if this was a technique the corporate meant to pursue extra extensively, however it didn’t instantly reply.

The problem of patents referring to technical requirements is an space that the European Fee is eager to deal with. In Might, it printed its proposals on a licensing framework for SEPs meant to deliver better transparency to SEP portfolios and permit for higher methods for events to agree on FRAND (truthful, cheap and non-discriminatory) phrases for licensing of SEPs.

This laws has already met with some criticism, partly as a result of it’s claimed it might penalize patent holders making infringement claims outdoors of Europe by limiting entry to EU courts. Nevertheless, it might not essentially defend EU firms in opposition to royalty claims by Huawei as the foundations will apply solely to requirements printed after its entry into pressure.

Huawei can be apparently not the one firm hoping to squeeze system makers for license charges; Brit chip designer Arm is alleged to be in search of to shift its enterprise mannequin in order to cost system makers a license price based mostly on the worth of the top system, as The Register reported beforehand, with the intention to usher in extra cash.

The strikes might mark the beginning of a worrying pattern for IP holders to attempt to milk extra income from license charges at each stage of the availability chain, a pattern that will inevitably translate into increased costs being paid by patrons. ®