INDIA – 2019/08/30: In this photo illustration a popular wireless communication application Verizon logo seen displayed on a smartphone. (Photo Illustration by
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Huawei has filed two lawsuits against Verizon alleging the U.S. carrier infringed patents held by the Chinese telecoms giant.
Even though Huawei has a tiny presence in the U.S., American companies like Verizon will still use patented technology from Huawei. That’s because the Chinese firm holds over 87,000 patents globally with 11,000 of those being in the U.S.
Thousands of elements of that intellectual property (IP) will be “standard essential patents,” which are technologies critical for mobile networks including 3G, 4G and now 5G.
Other firms, including some of Huawei’s rivals, will need to use the patented technology for telecommunications networks.
Huawei claims it has been trying to negotiate royalty payments with Verizon “for a significant period of time” but were “unable to reach an agreement on license terms.”
CNBC reported last year that Huawei was in discussion with Verizon over royalty payments.
Verizon was not immediately available for comment when contacted by CNBC.
“For years now we have successfully negotiated patent license agreements with many companies. Unfortunately, when no agreement can be reached, we have no choice but to seek a legal remedy,” Song Liuping, chief legal officer at Huawei, told CNBC.
“This is the common practice in the industry. Huawei is simply asking that Verizon respect Huawei’s investment in research and development by either paying for the use of our patents, or refraining from using them in its products and services.”
Huawei says the alleged infringements relate to 12 patents in areas from computer networking to video communications claiming that Verizon has “greatly profited” from the use of these.
In its lawsuit, Huawei pointed to the fact that Verizon made $29.8 billion revenue in 2018 for its wireline division which includes its fiber-optic communications network.
Huawei has been under pressure from the U.S. which has accused it of being a national security threat, claiming its networking gear could be used by Beijing to spy on Americans. Huawei has repeatedly denied these allegations.
The Chinese firm has been put on a U.S. blacklist which restricts its access to U.S. technology. Huawei has used legal means to try to fight back against U.S pressure.
Last year, it sued the U.S. over a law that bans government agencies from buying its equipment, claiming the legislation is unconstitutional.
Patents could be a way for Huawei to go after U.S. firms. Last year, the company’s founder and CEO Ren Zhengfei signaled Huawei could look to extract more royalties from companies.
“Over the past years, we were not aggressive seeking IPR (intellectual property rights) royalties to companies that use our IPR — that’s because we were busy pursuing our business growth. Once we have more time off, we may try to get some money from those companies who use our IPR,” Ren said, adding that patents would not be used as a “weapon to hinder the development of human society.”