As of 2020, Huawei has more than 100,000 patents, of which 5G-related patents account for more than 6%. According to a report released by IPlytics, a German patent information analysis organization, as of October last year, Huawei's 5G patent applications ranked first in the world with 6,372, while Qualcomm and Samsung ranked second and third with 4,590 and 4,052, respectively. Why did Huawei start charging 5G patent fees at that time?
The official explanation is that research and development investment must be returned. It is speculated that Huawei's intellectual property income could become an important source of income when the mobile phone business is under pressure. Huawei has formed a competitiveness centered on independent intellectual property rights that can leverage the market. First, Huawei has integrated its intellectual property strategy into the company's strategy. Huawei insists on letting customers' ideas guide the direction of products, and is open to extensive cooperation on the basis of independent research and development. The top leaders of each product line are responsible for the company's major intellectual property decisions, including the formulation and implementation of the company's overall intellectual property strategy.
The company has also set up a dedicated intellectual property department to closely cooperate with the R&D, marketing, and intellectual property departments to seek effective intellectual property solutions and give full play to the impact and support of intellectual property on the company's business. In addition, Huawei focuses on breakthroughs based on practical research. Huawei pays attention to obtaining intellectual property rights through various channels. First, it focuses on independent development, obtains original innovation achievements, and extensively absorbs innovation achievements from global industries. Secondly. Through joint ventures and cooperation, it forms intellectual property strategic alliances with other companies, and also acquires some small foreign companies to obtain advanced patented technologies. The company also actively integrates into international industry organizations, extensively communicates with peers, especially actively participates in industry standard development organizations, and is committed to the growth and development of the industry.
Because Huawei has the ability to provide strong R&D assets and various intellectual property rights in various mergers and acquisitions, and transform this ability into real commercial value in the process of cooperating with industry partners, it can overcome difficulties with partners or hand in hand Difficulties, or seize the opportunity to develop rapidly and achieve a win-win situation. This series of successful transactions has been widely recognized by the industry for Huawei's collaborative innovation capabilities. Besides, Huawei respects the intellectual property rights of others, follows international rules and practices, and resolves intellectual property disputes through cross-licensing, business cooperation and other channels in a positive and friendly manner. Huawei uses its own patents to carry out cross-licensing with other companies, so Huawei saves hundreds of millions or even more than one billion dollars in patent licensing fees every year. For businesses, less spending means more revenue. At this time, patents are no longer just Huawei's cost, and Huawei can also make profits from it. Therefore, the cost of Huawei's investment in patents has been greatly reduced.
After owning a large number of patents, Huawei can also act as a patent holder and collect licensing fees from users of patented technologies, truly entering the stage of generating income from patents. Huawei uses its own patents to form cross-licenses with other technology holders to achieve a win-win situation, and to enable Huawei's products to gain more market freedom when selling. For example, in the history of Huawei's mergers and acquisitions with American and European companies, Huawei provided technology and the other party provided capital. The foundation of Huawei's survival and development is to respect and protect intellectual property rights, invest heavily in long-term capital, and continue to focus on customer-centric R&D and innovation. Huawei has invested a lot of money in intellectual property, and the returns have been considerable.
Many of Huawei's projects are based on intellectual property rights. For example, the "Mobile Communication Distributed Base Station Project" has applied for 22 patents, which have been successfully applied in more than 20 countries and regions around the world, achieving a large amount of tax revenue and profits. Moreover, Huawei is a major contributor to global 5G patents and holds a large number of 5G basic patents. According to the data released by the world intellectual property research organization GreyB, as of now, Huawei has declared 3007 5G patent families, ranking first in the world. With the rapid development of 5G, more and more 5G technology and patented terminals will be involved in the future.
In order to ensure that the products can be sold normally, on the one hand, Huawei took the initiative to negotiate with these patent companies and pay patent licensing fees; on the other hand, it invested more in research and development, desperately accumulating technology. Huawei spends more than 10% of its annual sales revenue on research and development. Five years later, Huawei's technological accumulation has reached the level of a world-class leader in the communications industry. Even today, Huawei is still paying a lot of costs for patent protection, but at the same time, patents also contribute a huge invisible value to its sales. The sales of its products to dozens of countries around the world is the most powerful proof. When many companies are subject to the "337 investigation" of the United States, because of intellectual property issues, their exports are blocked, but Huawei's products can be unimpeded.