U.S. semiconductor company Qualcomm has acquired some patents from China's Huawei. This marks a significant turnaround in the intellectual property relationship between the two companies, which began 25 years ago when Huawei first paid Qualcomm for patent licensing.
On October 5, Huawei announced that it had signed a multi-year patent licensing agreement with Qualcomm covering a wide range of technology areas, including 5G, computing, artificial intelligence (AI), and networking. The agreement includes mutual licensing, allowing both companies to use each other's patent portfolios. They agreed to adhere to the principles of fair, reasonable, and non-discriminatory (FRAND) licensing for standard essential patents (SEPs).
Notably, Qualcomm has decided to directly purchase some of Huawei's U.S. patents, focusing on patents in computing, AI, networking, and other technology fields. The specific patents and transaction amount have not been disclosed, and the deal is subject to necessary regulatory approvals. If finalized, Huawei's cumulative revenue from patent licensing agreements is expected to exceed $6.9 billion.
Historically, Huawei has acquired licenses from Western IT companies. Since 2021, it has reported profits from its intellectual property licensing business, and this will be the first time it generates licensing revenue from Qualcomm.
Huawei first paid Qualcomm for patent licensing in 2001, establishing a relationship centered around mobile communication technologies such as CDMA and WCDMA. The two companies faced a dispute in the late 2010s when their existing licensing agreement expired at the end of 2019, leading to a conflict over royalties. They resolved their differences in July 2020 by signing a new long-term global patent licensing agreement, during which Qualcomm recognized $1.8 billion in revenue from Huawei, including settlement payments related to past disputes.
However, Huawei has since strengthened its patent competitiveness through significant R&D investments. The importance of this transaction lies not only in the mutual use of patents but also in Qualcomm's acquisition of ownership of some Huawei patents. Unlike the 2020 agreement, where Qualcomm secured usage rights to Huawei patents, this time Qualcomm will gain partial ownership of Huawei's patents. This is the first instance of Qualcomm directly purchasing Huawei patents in publicly confirmed transactions.
Ultimately, the relationship between the two companies has evolved from 'Huawei using Qualcomm patents' in 2001 to 'Qualcomm purchasing Huawei patents' after 25 years.
* This article has been translated by AI.
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