Politicizing IP Destroys Patent System, Huawei's Chief Legal Officer Says
Li Na
/SOURCE : yicai
Politicizing IP Destroys Patent System, Huawei's Chief Legal Officer Says

(Yicai Global) June 27 -- China's Huawei Technologies has issued a white paper on innovation and intellectual property in which it urged the non-politicization of intellectual property issues.

IP is the foundation of innovation and politicizing intellectual property issues will threaten global technical progress, Song Liuping, Huawei's chief legal officer, said in the statement issued today in the company's Shenzhen headquarters.

It sends a very dangerous signal, Song argued, commenting on some US politicians' desire to prohibit the Chinese telecommunications technology giant from enforcing its patent rights.

"If politicians use IP as a political tool, they will destroy confidence in the patent protection system," Song said, adding "If some governments selectively strip companies of their IP, it will break the foundation of global innovation."

Huawei will adopt an open and cooperative attitude and adhere to the principles of fairness, rationality and non-discrimination in negotiating patent licensing and authorizations with manufacturers and owners, he pledged.

US Senator Marco Rubio (R-FL) recently proposed an amendment to a defense authorization bill that seeks to bar any firm the US Secretary of Commerce finds poses a threat to national security from prosecuting an IP claim in domestic courts or with the International Trade Commission.

Rubio proposed the amendment to the National Defense Authorization Act, or NDAA, a bill that determines Department of Defense spending policy.

The amendment does not specifically single out Huawei, though the conservative Cuban-American legislator has indicated in a Tweet the company is indeed its target. The bill assumes the commerce secretary will conclude that Huawei is a national security risk, which has also not yet happened.

Null and Void

The company's patents filed in the US will thus effectively become invalid if congress eventually passes the amendment and the secretary makes the requisite finding. The Shenzhen-based company applied for up to 3,195 patents in US between 2017 and 2019, all of which will be up for grabs.

Huawei demanded over USD1 billion in licensing fees for over more than 230 patents from New York-based Verizon Communications, Reuters reported in mid-June.

The negotiations with Verizon are a normal business activity, Song said. Huawei will not change its practices and it is an ongoing process, he added. The company will also continue such negotiations with relevant parties in the sector in future.

Huawei has incomes from relevant intellectual property, Song said, but it is still a company whose product sales, not patent income, make up a majority of its earnings.

Huawei has earned over USD1.4 billion from intellectual property since 2015. In addition to its proprietary patents, it has paid more than USD6 billion in patent fees for the lawful use of other companies' patents, with almost 80 percent paid to US firms, he said.

None of the product successes and key technologies relate to the alleged charges of trade secret infringement directed against Huawei in the past, Song said. The company's development relies on long-term mass investments in research and development, he added. Huawei spent as much as USD15 billion on R&D last year, the fifth-highest amount worldwide, with its R&D outlays totaling about USD73 billion over the past decade.

Huawei's R&D spending on the fifth-generation wireless communication network alone had topped USD2 billion by the end of last year, more than the total amount by major equipment providers in Europe and America, he continued.

The firm owns 2,570 5G-related patents, or one-fifth of the sector's total number, Huawei's rotating chairman Hu Houkun said at the Mobile World Conference yesterday.

The white paper  just after Huawei lost a lawsuit in the US yesterday when a jury found that CNEX Labs, a California-based semiconductor design firm, did not steal trade secrets from Huawei Technologies, but also gave it no damages for its claimed trade theft by Huawei, Reuters reported today.

Huawei sued CNEX in a Texas federal court, alleging misappropriation of trade secrets for a memory control technology and poaching its staff. The jury denied those claims, but also determined CNEX's founder did not tell Huawei of his patent filings, per the report.

CNEX counterclaimed, charging Huawei with trying to steal its technology. Though the jury found Huawei had misappropriated the secrets, it awarded no damages against it in a Pyrrhic victory for CNEX.

Editor: Ben Armour

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Keywords: Huawei , Intellectual Property