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Huawei, the Chinese technology giant, has announced that it has signed a patent cross-licensing agreement with its biggest Chinese rival, OPPO. Thus, allowing both companies to use each other’s patented technology in their products. This move results from the ongoing U.S. sanctions against Huawei, which have affected the company’s ability to do business.
Huawei has a massive portfolio of over 100,000 patents globally. It is one of the top patent holders in 5G technology, which is the next step in telecommunication technology, powering artificial intelligence and autonomous cars.
This cross-licensing agreement will also have several other benefits for both companies. For Huawei, it will help offset the impact of U.S. sanctions, which have made it difficult for the company to access the technology and components it needs to produce its products. By sharing its patented technology with OPPO, Huawei will generate new revenue and continue to compete in the market.
OPPO will get access to Huawei’s patented technology that the company can use to develop its own products. Thus giving OPPO a competitive advantage in the market and helping it continue to grow and expand.
“We are very pleased to enter a patent cross-licensing agreement with Huawei. It demonstrates that the two companies recognize and respect the value of each other’s intellectual property. It is a win-win deal for both sides,” stated Adler Feng, OPPO’s Chief Intellectual Property Officer.
The exact details of the deal are still unknown. But in 2021, when Huawei announced it was planning to monetize its patent portfolio, the company said it would charge a “reasonable” $2.50 per device to license its technologies. Huawei also stated that it expected to earn a revenue of $1.2 billion to $1.3 billion from licensing its intellectual property between 2019 to 2021.
Sanctions on Huawei
The U.S. government imposed restrictions on Huawei because of concerns over national security. These concerns stem from allegations that the Chinese government could use Huawei’s telecommunications equipment for espionage and other malicious activities.
The specific details of the sanctions on Huawei vary, but some of the key restrictions include a ban on the sale of U.S. technology and components to Huawei without a license, a ban on U.S. companies doing business with Huawei, a ban on Huawei from participating in government contracts and using U.S. technology in its products.
These restrictions have had a major impact on Huawei’s ability to do business, and they have caused the company to look for new ways to generate revenue like the cross-licensing agreement with OPPO to maintain its competitive position in the market.