Huawei's trump card: Firm owns most 5G patents, despite US ban

Despite Trump administration's moves to edge Huawei out, US still has to pay royalties to Chinese firm, new study shows.

by
Huawei owns the lion's share of 5G patents. It has collected more than $1.4bn in licensing revenue and has paid some $6m to other companies, it said in a court filing in its patent dispute with Verizon Communications Inc [Qilai Shen/Bloomberg]
Huawei owns the lion's share of 5G patents. It has collected more than $1.4bn in licensing revenue and has paid some $6m to other companies, it said in a court filing in its patent dispute with Verizon Communications Inc [Qilai Shen/Bloomberg]

Huawei Technologies Co. owns the most patents on next-generation 5G technology, ensuring the Chinese company will get paid despite Trump administration efforts to erase it from the supply chain, according to a new study.

The study by two research firms identified the inventions most closely connected to the 5G standards and found that six companies owned more than 80% -- Huawei, Samsung Electronics Co., LG Electronics Inc., Nokia Oyj, Ericsson AB and Qualcomm Inc., the only U.S.-based company in the group.

That may be awkward for President Donald Trump, whose administration has launched a global effort to shut out Huawei, accusing the Chinese company of being a security threat. The administration has launched a number of salvos, including a banned the sale of any silicon made with U.S. know-how that is hurting the Chinese company's aspirations to grow in cutting-edge fields.

"Even if they hire some other company to build the 5G infrastructure, they still have to pay the Chinese company because of the intellectual contribution to develop the technology," said Deepak Syal, director of GreyB Services Pte., a technology research firm that conducted the study with analytics firm Amplified AI Inc.

Identifying how many patents a company holds -- and how key they are to the industry standards -- will help determine who profits most from the next generation of technology that promises to revolutionize developments such as autonomous cars, robotic surgery, and connected homes.

Industry standards are critical to ensure devices work together and communicate with each other. Tech companies get together to establish those standards and pledge that any relevant patents will be licensed on "fair, reasonable and non-discriminatory" terms.

There have been global patent wars for years over how to define those fair terms and who's entitled to how much money in royalties. They were at the heart of since-settled fights, including Apple Inc.'s scorched-earth battle with Qualcomm, and Huawei's dispute with Samsung. Huawei has also stopped paying Qualcomm what may amount to billions in royalties amid a dispute.

The GreyB and Amplified study looked at about 6,400 inventions declared "essential" to 5G by their owners that had active patents somewhere in the world as of Dec. 31, 2019. By comparing the wording of the patent to the standard, the team of 25 researchers deemed 1,658 to be patents "core" to 5G.

Courts and negotiators will ultimately have to decide, though, if the patents really are essential to the standard, whether they're valid or not, and how much they are worth.

Based on the study, all of the companies were found to be padding their patent submissions to ensure they would be able to enforce their rights later, and in an effort to increase the amount they'd be able to collect in royalties.

"Companies over-declare pretty equally, so reducing everyone's share by 75% or so yields the same pecking order," said Jorge Contreras, a law professor at the University of Utah who's written about determining what is "essential" to a standard.

Huawei has collected more than $1.4 billion in licensing revenue and has paid some $6 million to other companies, it said in a court filing in its patent dispute with Verizon Communications Inc.

"Huawei creates plenty of its own intellectual property; we don't need to steal anyone else's," Ben Howes, a Huawei spokesman, said in an opinion video. The company said it put together the video "in response to the U.S. government's attempts to prevent Huawei from collaborating with academic institutions and innovating with our R&D and patents."

First-Phase Study

The GreyB and Amplified study, considered the first phase as more patents are analyzed and the standards continue to evolve, showed the interconnectedness between companies around the world, Syal said. He said the purpose of the study was "to bring more clarity" to where the discussions or decisions are being made.

"Rather than saying who has less contributions or who has less number of patents, let's work toward increasing the intellectual contribution of our country or our company and then build the 5G infrastructure," he said. "Otherwise, even by blocking, they are not helping in the end because they're paying money in terms of royalties."

As part of the Trump administration's efforts against Huawei, Secretary of State Michael Pompeo last week said European countries "need to get it out of their system. They need to use Western technologies."

While the administration has helped curtail Huawei's growth outside China, it remains a player because of its global footprint and advanced technology.

"From a pure technology standpoint, nationalism just doesn't work anymore," said Contreras.

SOURCE: Bloomberg

Lebanon's Cabinet fails independence test

Analysts claim current top-level cabinet appointments indicate the government is incapable of changing old politics.

by
    Anti-government protests continue in Lebanon where people are angry and frustrated at the entrenched political elites [Bilal Hussein/AP Photo]
    Anti-government protests continue in Lebanon where people are angry and frustrated at the entrenched political elites [Bilal Hussein/AP Photo]

    Beirut, Lebanon - Few in Lebanon were ever convinced by Prime Minister Hassan Diab's assertion that his government was "independent" and "technocratic".

    It has hired United Kingdom-based public relations experts and international consultants, its ministers are all new faces, and its prime minister speaks fluent Arabic and gives at-times inspiring speeches - unlike his predecessor.

    More:

    But, analysts have said, beneath the embellishments, the same old figures govern.

    Most of Diab's ministers were appointed by the same handful of sectarian politicians and former warlords against whom hundreds of thousands of people rose up against across the country last October in an unprecedented anti-establishment uprising.

    When Diab's government came to power after former Prime Minister Saad Hariri's Cabinet was toppled, attempts by some ministers to implement even humble changes were repeatedly quashed: A capital controls law was killed off because powerful Shia political leader Nabih Berri, who has been speaker of parliament for some 28 years, said it was a non-starter.

    A Cabinet decision to construct two power plants instead of three to solve Lebanon's perennial electricity cuts was reversed after the main Christian party of President Michel Aoun objected to not having a power plant in its majority-Christian area of influence.

    But on Wednesday, with Cabinet's endorsement of 20 key administrative and financial appointments according to the same old pie-sharing system, rather than strictly based on merit and qualifications, analysts said any illusions of independence should be put to rest.

    Lebanon's Prime Minister Hassan Diab,
    The same sectarian politicians and warlords who have dominated Lebanon for years remain in control of the government of Prime Minister Hassan Diab, wearing a mask, despite mass protests against the political establishment last year [File: Mohamed Azakir/Reuters]

    "Nothing has changed," Sami Atallah, director of the Lebanese Center for Policy Studies, told Al Jazeera. "The Titanic is sinking, and politicians are still fighting over this position or that position. It's really, really sad."

    "But were we expecting anything different? Not really," he added. 

    The 'fig leaf drops'

    Among the appointments made on Wednesday were four vice-governors to the Central Bank and members of the Banking Control Commission, Capital Markets Authority and a member of a specialised investigation committee at the Central Bank. The latter three are all oversight and regulatory bodies.

    Cabinet also appointed a new director-general to the economy ministry, a new head to the Civil Service Council, akin to the state's human resources department, as well as governors for Beirut and the northern Kesruan-Jbeil region.

    Many of the financial positions are especially important today given Lebanon's deep economic and financial crisis which the government has said will require a restructuring of its local and foreign-held debt, private banks and the Central Bank.

    "This requires independent, non-political, competent, technically knowledgeable, experienced monetary and regulatory authorities … who are not subject to domination and intervention by corrupt politicians and their interests," Nasser Saidi, a former vice-governor and economy minister, told Al Jazeera. Instead, Wednesday's appointments "confirm the political establishment is continuing business as usual, despite the protests that started in October."

    "Political appointees cannot undertake deep reforms that threaten the interests of the political establishment and its cronies," Saidi said.

    Lebanon's parliament had notably ratified a new independent mechanism for top-level appointments just two weeks ago that would force all candidates to undergo rigorous exams.

    Political appointees cannot undertake deep reforms that threaten the interests of the political establishment and its cronies

    Lebanon's Former vice-governor and economy minister

    It has not yet gone into effect, though many analysts and opposition figures, including MP George Adwan who drafted the appointments law, called on Cabinet to wait until it did go into effect as an indication of its intention to reform.

    "Are you a government of reform or one of quotas? An independent government or subordinate to those to whom you gives shares? … You have to decide. Today, if you chose the quota appointments, the fig-leaf drops," Adwan said in a news conference before the session.

    Acting Information Minister Ramzi Moucharafieh denied that appointees had been selected solely via "muhassasa" - a de facto quota system whereby each of Lebanon's sectarian leaders gets to name their share of civil servants.

    Merit had been a main factor, he said.

    "Political manoeuvring is normal, every person will try to bring in the people close to them, but the important part is that they have merit and were chosen based on criteria and CVs and personal interviews," Moucharaifeh said in response to a question from Al Jazeera following the session.

    Economy Minister Raoul Nehme told Al Jazeera as he left the session that a number of the candidates' CVs had been put forward to Cabinet just 48 hours earlier. 

    Lebanon's Prime Minister Hassan Diab,

    'Sinking into the abyss.'

    Some government ministers themselves said they opposed the manner of appointments. Hezbollah-affiliated Industry Minister Imad Hoballah said he had objected to the "lack of transparency" and the absence of a merit-based appointment mechanism.

    Meanwhile, two ministers affiliated with the Marada Movement of Christian politician Sleiman Frangieh boycotted the session at his request. Frangieh said he disagreed with "shameless" appointments based on sectarian interests and quotas, rather than merit. Frangieh had notably threatened to have his two ministers resign from the government in March if he were not allowed to name two top-level civil servants instead of one.

    Hundreds of thousands of people took to the streets last October to demanded a change to cynical politics-as-usual. Seven months on, the need for change has only grown as conditions worsen. This week Lebanon's currency depreciated from about 4,000 Lebanese pounds to a dollar, to more than 4,700 pounds to the dollar on the black market, a main source of foreign currency, amid a worsening dollar shortage.

    Signs of social strain are beginning to show. In the first four months of 2020, murders were up by 103 percent on last year, from 29 to 59, according to Information International, a Beirut-based research and consultancy firm that got its numbers from the Internal Security Forces.

    Car thefts are up 46 percent from 157 to 230 stolen cars, and burglary is up 20 percent from 586 to 708 cases.

    Many hundreds have protested in parts of the country during the past week. Brief sectarian clashes took place in Beirut on Saturday in areas that were front lines during the country's devastating 15-year civil war that ended in 1990. Newscasts were filled with talk of renewed sectarian conflict.

    Without significant changes and "a new grand bargain" Atallah said, "I think the country is sinking into the abyss."

    SOURCE: Al Jazeera News


    ABOUT THE AUTHOR



    ;