WASHINGTON • Huawei Technologies owns the most patents on next-generation 5G technology, ensuring the Chinese company will get paid despite US efforts to erase it from the supply chain, according to a new study.
The study by two research firms identified the inventions most closely connected to the 5G standards and found that six companies owned more than 80 per cent – Huawei, Samsung Electronics, LG Electronics, Nokia, Ericsson and Qualcomm.
That may be awkward for US President Donald Trump, whose administration has launched a global effort to shut out Huawei, accusing it of being a security threat.
The administration has launched a number of salvos, including a ban on the sale of any silicon made with US know-how that is hurting Huawei’s aspirations to grow in cutting-edge fields.
“Even if they hire some other company to build the 5G infrastructure, they still have to pay the Chinese company because of the intellectual contribution to develop the technology,” said Mr Deepak Syal, director of GreyB Services, a technology research firm that conducted the study with analytics firm Amplified AI.
Identifying how many patents a company holds – and how key they are to the industry standards – will help determine who profits most from the next generation of technology that promises to revolutionise developments such as autonomous cars, robotic surgery and connected homes.
Industry standards are critical to ensure devices work together and communicate with each other. Tech companies get together to establish those standards and pledge that any relevant patents will be licensed on “fair, reasonable and non-discriminatory” terms.
The study looked at about 6,400 inventions declared “essential” to 5G by their owners that had active patents somewhere in the world as of Dec 31 last year. By comparing the wording of the patent to the standard, the researchers deemed 1,658 to be patents “core” to 5G.
Courts and negotiators will ultimately have to decide, though, if the patents really are essential to the standard, whether valid or not, and how much they are worth.
Based on the study, all the firms were found to be padding their patent submissions to ensure they could enforce their rights later, and to raise the amount they would be able to collect in royalties.
“Companies over-declare pretty equally, so reducing everyone’s share by 75 per cent or so yields the same pecking order,” said University of Utah law professor Jorge Contreras.
Huawei has collected more than US$1.4 billion (S$1.9 billion) in licensing revenue and has paid some US$6 million to other firms, it said in a court filing in its patent dispute with Verizon Communications.
“Huawei creates plenty of its own intellectual property; we don’t need to steal anyone else’s,” its spokesman Ben Howes said.
Meanwhile, a US Senate report released yesterday said the government “provided little to no oversight of Chinese state-owned telecommunications carriers operating in the US for nearly 20 years”.
The report faulted the Federal Communications Commission (FCC) and “Team Telecom” – an informal group comprising officials from the Justice, Homeland Security, and Defence departments – in the overseeing of China Telecom (Americas), China Unicom (Americas) and Pacific Networks.
In April, the FCC issued show-cause orders requiring the state-owned Chinese carriers to explain why the agency should not revoke their authorisation to operate in the United States. All three have urged the FCC not to do that. The report urges the FCC to quickly decide on whether to revoke the authorisations.