Huawei takes advantage of patent fees to compensate for the decline in revenue after the US embargo, still confident: No one can live without Huawei's 5G!

Due to the US embargo, Huawei's revenue dropped dramatically. The company began to aggressively charge patent fees to compensate, small and medium enterprises or even "compatriot" Xiaomi were not ignored.

How many patents does Huawei have?

Huawei has been the world's most patent-registered company for five consecutive years since 2017. As of the end of last year, Huawei had more than 120,000 validly authorized patents worldwide, according to data. data from the company's own 2022 financial statements.

According to the World Intellectual Property Organization (WIPO), Huawei's number of patent applications under the Patent Cooperation Treaty (PCT) in 2021 is 6,952, and 7,600 in 2022, almost twice as high as Asia's second position, according to the World Intellectual Property Organization (WIPO). army of Samsung or Qualcomm.

Top 10 companies with the highest number of patent applications, 2021. Source: World Intellectual Property Organization (WIPO).

In which, the most valuable are patents related to 5G. Currently, Huawei alone accounts for 15% of the global 5G patents, much higher than Qualcomm, Nokia, Ericsson, Apple, Samsung and others. In addition to the field of 5G, Huawei also has other patents related to WiFi connectivity, optical transmission, optical intelligence, autonomous driving, software technology, etc.
In the past 5 years, Huawei's 4G and 5G patents have been used for 2 billion smartphones worldwide. Currently, each year, about 8 million smart cars using Huawei's 4G and 5G patents are delivered to consumers.

Being 'generous', why did Huawei suddenly turn to patent fees?

Previously, Huawei rarely charged patent fees to domestic and foreign companies. Huawei's patent registration at that time was also an act of self-protection, avoiding the case of having to pay fees if another party applied for and registered the patent.

However, in the past 2 years, Huawei started to collect patent fees from domestic and foreign companies, first Apple, Samsung and OPPO, recently Nokia, Ericsson, Qualcomm, etc. Huawei also sued Xiaomi with accused of infringing on 4 of his patents and demanded that his 'countryman' pay a fee.

The company said: " Although it is impossible to make a profit from charging fees, the fees cannot be too low. Otherwise, no one will have the incentive to invest in R&D, from which the innovation of the whole society will be suppressed. restraining ". In short, the purpose of patent fees, according to Huawei, is to "promote innovation".

However, many people believe that, due to the embargo in the US, Huawei's profits have plummeted, the company is forced to save it by turning to exploiting the neglected source of profits from patents.

Huawei is confident: "No one dares not to pay fees"

Usually, a large company like Huawei, if it charges a patent fee, only targets large enterprises and "closes its eyes" to small and medium-sized companies. Since the fees charged by these companies are usually not large, negotiating will not be cost-effective.

But recently, Huawei decided to aggressively charge patent fees with 30 Japanese small and medium-sized telecommunications companies, including those that were just established not long ago. Apparently, Huawei has "turned around 180 degrees" and switched to a fee-based strategy that doesn't spare anyone. People ask: What if negotiations with the other 30 Japanese companies fail and they refuse to pay? This possibility is relatively low because Huawei's patent fees are not considered high compared to the market. If Japanese companies don't pay, their own reputations will be unnecessarily damaged. In addition, Huawei's patents can be used in many areas at the same time such as self-driving cars, logistics, automation, etc. If the other Japanese companies want to develop long-term, they will not regret it. a small fee for patent rights.

By 2022, a total of 29 companies around the world, including US companies, have signed bilateral agreements with Huawei and agreed to pay to use Huawei's patents. Although Huawei products are basically not sold in the US, it is almost impossible for many US companies to live without Huawei's technology patents, especially if they want to use WiFi 6 and some 4G technologies, Other 5G.

How much does Huawei make from patent fees?

Huawei's patent fees are not too high, even slightly lower than the international average. It is reported that the fee for the 30 Japanese companies mentioned above is 2.5 yuan / device, or 0.1% of the price of the device.

In 2021, Huawei charges $2.50 per smartphone device for 5G technology patents. Between 2019 and 2021, Huawei has collected a total of $1.2 billion in patent fees, according to Reuters data.

References from: Sohu, WIPO