Commentary

Huawei Files Lawsuits Claiming Verizon Has Infringed On 12 Patents

Huawei Technologies, the Chinese technology company that has been blacklisted by the United States government for national security reasons, filed two lawsuits against Verizon Communications late Wednesday for purportedly violating 12 of its patents.

“According to the lawsuit, Verizon is using Huawei’s technology without a license in several applications, including in its routers and switches and in enterprise services. Verizon isn’t a customer of Huawei. The lawsuit references technologies allegedly used by Verizon and branded by other vendors such as Cisco Systems Inc., which competes with Huawei in telecom equipment,” Dan Strumpf writes  for The Wall Street Journal.

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“The patents at issue involve longstanding telecom technologies such as those for optical transmission and digital communications. They don’t concern next-generation 5G technology,” Strumpf adds.

“In the court documents, Huawei said Verizon has ‘profited greatly’ from its technology, with the U.S. firm’s Wireline segment -- which covers voice, data and video communications products -- generating revenue of $29.8 billion in 2018,” Reuters’ David Kirton writes.

“In June, The Wall Street Journal reported that Huawei was seeking compensation from Verizon for the use of more than 200 of its patents,” he adds.

“A person familiar with the situation tells The Verge that Huawei isn’t demanding a specific sum because it would need more data from Verizon to work out an estimate, but it could stretch into hundreds of millions of dollars. Huawei is focusing on these 12 patents because it has strong evidence that Verizon is using them and courts prefer to deal with smaller numbers at a time, the person says,” Sam Byford writes  for The Verge.

“Before filing the lawsuits in Texas, Huawei negotiated with Verizon for a significant period of time, during which the company provided a detailed list of patents and factual evidence of Verizon’s use of Huawei patents. The two parties were unable to reach an agreement on license terms,” Huawei says in a news release.

Verizon has not yet commented on the legal actions.

“Huawei, the No. 2 global smartphone brand and the biggest maker of network equipment for phone carriers, denies U.S. allegations it might be a security risk or facilitate Chinese spying. Sanctions imposed by the Trump administration in May block Huawei’s access to most U.S. components technology. The company says it has replaced most American technology in its main products,” the Associated Press reports.

“Huawei’s U.S. market largely vanished after a congressional panel warned phone carriers in 2012 to avoid the company. It still serves small, mostly rural American carriers and has grown rapidly in Asia, Europe and developing countries,” the AP adds.

“Although Huawei’s case against Verizon is a year in the making, the timing of its legal filing is likely to exacerbate tensions between itself and the Trump administration. Huawei has been locked in a geopolitical firefight with the U.S. government for the last year against the backdrop of the U.S.-China trade war. The Trump administration claims Huawei acts as a conduit for Chinese state spying, an accusation Huawei denies,” Isobel Asher Hamilton writes  for Business Insider.

“The U.S. has been consistently lobbying its allies to reject Huawei’ 5G telecoms equipment, but received a major blow  last month when the U.K. announced it would allow the company to build ‘non-core’ parts of its 5G infrastructure,” Hamilton adds.

In addition, “Huawei is currently facing charges in the U.S. for allegedly stealing trade secrets from T-Mobile. The alleged activity occurred during 2012-13, and relates to Huawei's attempts to build a robot similar to the one T-Mobile was using at the time to test mobile phones,” Aimee Chanthadavong writes  for ZDNet.

“The U.S. indictment related to the case alleges Huawei offered bonuses to employees for stealing information, before clarifying to its U.S. employees that such behavior would be illegal…. The Chinese giant pleaded not guilty. A trial has been set for 2 March 2020,” Chanthadavong adds.

And “last year, [Huawei] sued the U.S. over a law that bans government agencies from buying its equipment, claiming the legislation is unconstitutional,” CNBC's Arjun Kharpal writes.

“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,” Kharpal adds.

“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,” he said at the time, Kharpal reports, but Ren added “that patents would not be used as a ‘weapon to hinder the development of human society.’”

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