Huawei Announced 5G Patent Rate For The First Time: The Maximum License Fee For A Single Mobile Phone Is $2.5

Under heavy pressure from the United States, Huawei has its own "Noah's Ark". Among them, intellectual property rights have always been the basis of Huawei's innovation, providing power for the ark.

On March 16, Huawei released the white paper 2020 on innovation and intellectual property rights. The white paper points out that continuous investment in innovation has made Huawei one of the world's largest patent holders. By the end of 2020, Huawei has held more than 40000 sets of valid authorized patents (more than 100000), and more than 90% of the patents are invention patents.

Song Liuping, Huawei's chief legal officer, said: "Huawei invests 10% - 15% of its revenue into research and development every year. In the past decade, Huawei has invested about $90 billion in R & D. At present, it has signed more than 100 cross licensing patents with major ICT manufacturers such as the United States, Europe, Japan and South Korea. "

Ding Jianxin, director of Huawei's intellectual property department, disclosed that Huawei's intellectual property revenue is expected to be between $1.2 billion and $1.3 billion from 2019 to 2021, and has announced Huawei's charging standard for 5g multi-mode mobile phones: the upper limit of patent license fee for a single mobile phone complying with 5g standard is $2.5, and a reasonable percentage rate applicable to the price of mobile phones is provided.

According to reports, Huawei began to apply for the first Chinese patent in 1995 and the first US patent in 1999. In 2008, it ranked first in the World Intellectual Property Organization (WIPO) PCT patent application for the first time. In 2019, Huawei ranked second in the number of patents granted in Europe and tenth in the United States. Huawei is also the company with the largest number of patents granted in China.

The forum was held in the outdoor garden of Huawei park. It was released to the global media with a full sense of openness. At the same time, Huawei is also continuing to show the strength of intellectual property rights to the international community, convey the principles of intellectual property protection, and further expand its voice. Song Liuping also said in his speech that the continuous crackdown by the U.S. government has put Huawei in the spotlight. Huawei will continue to increase its open communication with the society. At the same time, he hopes to show Huawei's 30-year history of technological innovation and development through the 2020 white paper.

Huawei begins to charge 5g patent fee

In fact, patent is basically law, or a transformation of law. Patent fee collection, patent cross licensing, and even patent war are very common in shopping malls. In the United States, the rules on patents are particularly mature, because they encourage innovation and have a strong legal system. Nowadays, domestic enterprises also begin to collect high-tech patent fees from the world, which is also the embodiment of technical strength and standard voice.

As far as Huawei is concerned, one of its core competitiveness is 5g patents. According to the report of 5g patents released by iplytics, an internationally renowned patent data company, Huawei ranks first with 3147, Samsung ranks second with 2795, ZTE ranks third with 2561, and LG, Nokia, Ericsson, Qualcomm, Intel, sharp and NTT DoCoMo are the fourth to tenth. And Huawei began to charge 5g patent fees, which also reflects Huawei's space to compete in 5g competition.

At the conference on the same day, the most concerned issue was the disclosure of 5g mobile phone patent rate. At present, Huawei only announced the upper limit of license fee of $2.50, but did not disclose the specific rate, and said that it needed to discuss one by one according to the situation of the target company.

Ding Jianxin said in an interview: "when pricing, we mainly consider two factors: one is whether the revenue and licensing fees can recover the investment in R & D. Second, we need to consider the cost, that is, the cost of industry implementation. We can't set a very high rate, otherwise it will increase the difficulty of implementation, so we will make a balance. "

On the issue of rate range, song Liuping told reporters such as the 21st century economic report that Huawei follows the frand principle, and the rate is generally calculated according to the percentage of the sold price. Comprehensive factors such as R & D cost investment and the proportion of standards should be considered. "For the mutual licensing between each company, it will be more complicated, such as bilateral negotiation and cross licensing. There will be a unified standard among companies, and each company will come to a conclusion according to the discussion of cross licensing between both parties, which is also a common practice in the industry. "

In terms of Huawei's overall patents, according to the data provided by smart bud to the 21st century economic reporter, Huawei and its subsidiaries have applied for more than 220000 patents. Among them, more than 10000 patents have been applied for each year since 2012. Among them, invention accounted for 93.68%, indicating that Huawei's product technology content is high; PCT applied to the World Intellectual Property Organization accounts for 21.35%, which shows that Huawei supports its global business strategy through the global layout of patents; the proportion of international applications is high, mainly concentrated in the United States, Europe, Japan and India, while the number of applications in China only accounts for 39.95% of the total application volume; in 2019, the proportion of PCT applications applied for by Huawei is high, accounting for 21.35% Huawei's application volume in the United States increased significantly, from 2534 to 3338, an increase of 29.68%.

At the same time, from the analysis of smart bud data, Huawei's all technologies are concentrated in network equipment and terminal equipment, and it has a lot of communication technology, and electronic equipment is also a large part of the application. According to the technology sunrise chart of Huawei's recent 5000 public patents, it can be found that Huawei's patent proportion in communication network has increased, indicating that its patent investment in 5g has increased, and more attention has been paid to the layout of "vehicle network".

Will intellectual property become Huawei's new revenue?

As far as Huawei is concerned, the right time to collect patent fees is one of the combination fists to deal with the US sanctions. On the other hand, it can strengthen the voice of 5g industry and collect patent fees. It also reflects from the side that the supporting 5g development will enter a relatively mature stage. 5g applications are rising. China has said before that 2021 will be the first year for 5g large-scale commercial use.

At the same time, it is also in line with the deployment of the national policy level for the science and technology industry. The development of science and technology is inseparable from innovation and research, and the support of intellectual property system is needed behind the incentive innovation. For example, in the chapter of improving the system and mechanism of scientific and technological innovation, we should improve the system of intellectual property protection and application, including the implementation of the strategy of strengthening the country with intellectual property rights, implementing strict intellectual property protection system, improving relevant laws and regulations on intellectual property rights, and accelerating the development of new fields and new formats of intellectual property rights Legislation, etc.

With Huawei taking the step of charging 5g patent fee, the big question of the outside world is: will Huawei start to generate revenue through patents?

Song Liuping said that intellectual property is not the main source of Huawei's income. He said: "Huawei is mainly engaged in product companies. Its main source of income is products and services. Products are the main source of our long-term income. Compared with Huawei's overall revenue and intellectual property rights, we are not the main source of revenue. The amount and time invested by 4G and 5g Huawei are different, and the contribution of standards is also different. According to these changes, the rate and situation of external license will be adjusted. "

Looking at the industry, we all know that half of the net profit of Qualcomm comes from patent fees. Of course, Qualcomm holds many 3G, 4G and 5g communication patents. Based on its early investment in R & D and market operation, it has established high patent barriers. For example, its network technology on CDMA has become an important standard of 3G. Therefore, no matter the mobile phone company or chip company, as long as they use 3G network, they need to pay the patent fee to Qualcomm. Even if the mobile phone does not use the chips of Qualcomm, it will still make With the communication patent of Qualcomm.

    It is understood that in 2018, Qualcomm announced the 5g charging standard, which will charge 2.275% of the patent fee if it only supports 5g mobile phones with its core patents; 3.25% of the patent fees will be charged for the use of the core patents of Qualcomm and the mobile phones supporting 3G / 4G / 5G; 4% of the patent fees will be charged for the use of the core patents plus non core patents, and only 5g mobile phones Mobile phones that support 3G / 4G / 5G will be charged 5% of the patent fee. Ericsson's 5g patent license fee standard at that time was US $5 per unit for high-end handheld devices and US $2.5 per unit for low-end handheld devices. Because Huawei and ZTE have 5g related patents, they can cross license some of them.

Compared with Qualcomm and Ericsson, Huawei's $2.50/unit is not high in price only from the data. However, the content of patents is complex, and the situation of cross licensing between companies is also very complex, which also depends on the specific situation. With Huawei charging patent fees, it seems to the industry that more domestic companies will invest in R & D and innovation and participate in standard setting.