Innovation does not occur in a vacuum, but how can we ensure collaboration for innovation happens in a trusted way to enable a win-win situation? Intellectual property (IP) rights empower an inventor to protect his solution while allowing other inventors to develop further innovations from that solution. In the IT industry, IP can also help to set industry and technical standards to ensure various technologies can work together seamlessly.
For instance, Huawei licensed selected Wi-Fi 6-enabled products under its portfolio of standard essential patents (SEPs) to Buffalo Inc in 2021. This allows the Japanese networking, storage and memory solutions provider to develop new solutions offering Wi-Fi 6 capabilities. As for Huawei, increased adoption of its Wi-Fi 6 SEPs will further solidify its status as a key contributor to the Wi-Fi 6 standards. This is because SEPs are crucial to implementing technical standards that enable organisations to innovate collaboratively and meaningfully.
“Intellectual property is the great engine of cooperation in technology. It advances technology for everyone to enjoy,” says Randall R. Rader, former Chief Judge of the US Court of Appeals for the Federal Circuit, at Huawei’s “Bridging Horizons of Innovations: Sharing IP, Driving Innovation” event in Shenzhen on July 13.
A balanced approach to IP
To ensure IP drives continuous innovation, the IP sector needs to take a balanced approach to patent licensing, says David Wang, Huawei’s head of the Asia Pacific Intellectual Property Rights Department, at a media briefing on the sidelines of the same event.
He adds: “Some industry players are against IP protection and royalty fees as they believe those will curb innovation and competition. But we firmly believe taking a balanced approach to IP will enable inventors to promote continuous and collaborative innovation in the industry. Such an approach requires the royalty or licensing fees to be reasonably priced. This ensures innovators receive commensurate returns as innovation usually requires long-term and heavy investment. At the same time, innovations will be accessible to many instead of the privileged few.”
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Walking the talk, Huawei priced the licences of its SEPs based on fair, reasonable and non-discriminatory (FRAND) principles. “We’ve set preferential royalty rates by fully considering Huawei’s contribution to relevant standards and the contribution of the corresponding standards to products. Doing so will help incentivise the creation and adoption of innovations,” says Wang.
Huawei’s current royalty rate caps for 4G and 5G handsets are US$1.50 ($1.98) per unit and US$2.50 per unit, respectively. Meanwhile, the royalty rate for Wi-Fi 6 consumer devices is US$0.50 per unit. As for the Internet of Things (IoT), the royalty rate for IoT-centric devices is 1% of the net selling price, capped at US$0.75, while the rate for IoT-Enhanced devices ranges from US$0.30 to US$1 per unit.
Encouraging IP-enabled growth
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To date, Huawei has entered into almost 200 bilateral patent licences. Over 350 companies have also obtained licences to Huawei’s patents through patent pools. These companies include phone makers Samsung and Oppo, and automotive manufacturers Audi and Lamborghini. Huawei’s licensing revenue amounted to US$560 million in 2022, more than it paid in royalties.
Committed to enabling collaborative and continuous innovation in the tech ecosystem, Huawei will re-invest its licensing revenue into the research and innovation of related standards and emerging technologies such as 5.5G and audio and video technology. For example, Huawei has developed a ten-size adjustable aperture in mobile phones, which uses six blades to give users precise control over the amount of light passing through the lens. As such, users can manipulate the depth of field and bokeh when taking night-view, portrait, and landscape photos on mobile phones with that technology.
Huawei will also continue to look at patent cross-licensing, wherein it will use other patented technologies to offer better solutions to its target markets. One example is Huawei Music’s use of the Audio Vivid technology to launch spatial audio content. Audio Vivid is an AI-based audio codec standard released by the World Ultra HD Video Industry Alliance (UWA). Since it breaks the limits of audio channels and increases the sense of both space and direction, it offers listeners a consistent and immersive audio experience.
Additionally, Huawei has increased its R&D investment in basic research and foundational technologies to provide more competitive options for the industry. The company also launched a new website at the event, which details its bilateral licensing programmes ranging from mobile handsets to Wi-Fi and cellular IoT.
“Huawei is willing to share cutting-edge innovations in the form of patents with the world. These will support the common, sustainable development of industries globally,” says Huawei’s chief legal officer Song Liuping.
