Ericsson and Huawei renew their patent sharing vows

Kit vendors Ericsson and Huawei have renewed a cross-licensing agreement that covers 3G, 4G, and 5G tech, which Ericsson estimates will help it rake in SEK11 billion in licensing revenues this year.

The short version is that this is a technology sharing agreement between the two networking kit manufacturers.

The slightly longer version is that this is a multi-year global patent agreement that covers sales of network infrastructure and consumer devices, and grants the firms access to each others’ technologies, such as 3GPP, ITU, IEEE, and IETF standards which are used in 3G, 4G, and 5G products.

As well as getting a peek at each other’s networking technology homework, there’s big money to be made in such pacts, it seems. For Ericsson’s part, it estimates full-year 2023 IPR licensing revenues to clock in at around SEK11 billion, and we’re informed it is confident of growing its IPR revenues with further agreements and by expanding into additional licensing areas.

“We are pleased to announce our renewal of our global cross-licensing agreement with Huawei,” said Christina Petersson, Chief Intellectual Property Officer at Ericsson. “Both companies are major contributors to mobile communication standards and recognize the value of each other’s intellectual property. This agreement demonstrates the commitment of both parties that intellectual property should be respected and rewarded, and that leading technological innovations should be shared across the industry.

“A balanced approach to licensing ensures that the interests of both patent holders and implementers are served fairly, driving healthy, sustainable industry development for the benefit of consumers and enterprises everywhere.”

Alan Fan, Head of Huawei’s Intellectual Property Department added: “We are delighted to reach a long-term global cross-licensing agreement with Ericsson. As major contributors of standard essential patents (SEPs) for mobile communication, the companies recognize the value of each other’s intellectual property, and this agreement creates a stronger patent environment. It demonstrates the commitment both parties have forged that intellectual property should be properly respected and protected.”

“This agreement is the result of intensive discussions that ensured the interests of both patent holders and implementers are served fairly.”

Both firms took the opportunity to show off how muscular their bulging patent portfolios are. In 2022, Huawei topped the European Patent Office’s applicant ranking for number of patent applications filed with 4,505 applications, we’re told, while Ericsson said its 60,000 strong granted patent portfolio is bolstered with annual investments of over $4 billion in R&D.

Being on the same page with technologies is of particular relevance to the telecoms market where things like 5G standards are needed to make phones work across different geographical zones and network buildouts. However while this all sounds like a win-win for two of the most important companies in the industry, there is that ever present backdrop of a trade war between the West and China which they find themselves on opposite sides of.

What began as the US banning Huawei kit within its own 5G networks – motivated by security concerns – has expanded in scope over the last few years to the point where there are now entire embargos on key technology areas such as semiconductors in place against China as a whole.

And the escalation continues – earlier this month the Biden administration announced a ‘national emergency’ in relation to the Chinese tech sector, which amongst other things seems to mean a soon to be enforced ban on US investment in semiconductors and quantum computing in the region.

With all of this going on it’s hard to foresee anything other than a widening gulf between the technological trajectories and ecosystems of China and the Western allies – so whether or not such close knit patent sharing relationships which stretch across the divide, such as the one Ericsson and Huawei celebrate today, can survive further amplification of this international trading aggro remains to be seen.

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