Patents are a thorny issue between tech giants, especially with regard to who pays who licensing fees for using revolutionary technologies. The latest brouhaha involves Huawei and Verizon, with the former suing the U.S. telecom firm for allegedly using 12 patents without authorization.
Two complaints were filed yesterday in the United States District Courts for the Eastern and Western Districts of Texas. The patents all involve Huawei’s networking tech, though none of them seem to deal with 5G—the future of which is at the forefront of authorities minds. In the complaints, Huawei alleges Verizon infringed on its patents for a wide variety of services, including FiOS, as well as network infrastructure that “facilitate communication through Verizon’s networks.” By the end of 2018, Huawei says Verizon had “profited greatly” from its tech to the tune of $29.8 billion.
Huawei also claims in the complaints and a statement that beginning in early 2019, it met with Verizon several times about licensing, but that by the end of January, negotiations had broken down and no agreement had been reached.
“Verizon’s products and services have benefitted from the patented technology that Huawei developed over many years of research and development,” said Huawei’s Chief Legal Officer Dr. Song Liuping in a press release. “This is the common practice in the industry. Huawei is simply asking that Verizon respect Huawei’s investment in research and development by either paying for the use of our patents or refraining from using them in its products and services.”
Huawei says it reinvests 10 to 15 percent of its revenue each year into research and development, resulting in more than $70 billion spent on 80,000 patents worldwide (10,000 of which were filed in the U.S.). It’s not immediately clear how much Huawei is asking for in this particular lawsuit. Last year, the company accused Verizon of violating 238 of its patents and at the time, the New York Times estimated Verizon could owe Huawei over $1 billion in fees.
Verizon, however, is having none of it. In an email to Gizmodo, Verizon spokesperson Rich Young said, “Huawei’s lawsuit filed overnight, in the very early morning, is nothing more than a PR stunt. This lawsuit is a sneak attack on our company and the entire tech ecosystem. Huawei’s real target is not Verizon; it is any country or company that defies it. The action lacks merit, and we look forward to vigorously defending ourselves.”
In any case, this is the latest in a series of developments pitting Huawei against the U.S. and U.S.-based telecom giants. Yesterday, the Wall Street Journal reported that the White House is organizing U.S. companies to create a 5G alternative that would at least reduce, if not totally circumvent, Huawei’s 5G hardware. This follows President Trump’s ban on companies doing business with Huawei last year, claiming the company posed a national security threat. That ban was somewhat reversed just months later. In November, the Pentagon added two weeks to an interim trading license with certain U.S. companies, with talks of a longer extension on the way.