Andy Mok

July 19, 2023

6 Min Read
Transportation and technology. Intelligent Transport Systems. 5G. IoT.
Transportation and technology. Intelligent Transport Systems. 5G. IoT.

In the dynamic world of telecommunications, patents are akin to creating new parcels of fertile land in the landscape of innovation. Recently, Huawei, the Chinese tech titan, has emerged as a global patent leader, a testament to its relentless dedication to cultivating these new parcels of fertile land in the form of technological breakthroughs. This leadership was brought into focus at its recent flagship event “Bridging Horizons of Innovations: Sharing IP, Driving Innovation,” where Huawei announced its royalty rates for handsets, Wi-Fi, and IoT patent license programs.

Song Liuping, Huawei’s Chief Legal Officer, emphasized the company’s commitment to sharing its cutting-edge innovations globally in the form of patents. He stated, “These will support the common, sustainable development of industries globally.” This announcement underscores Huawei’s evolution as a global patent leader with over 120,000 active granted patents worldwide.

Huawei’s investment in R&D has served as the seed capital for its patent cultivation. The company allocated a staggering CNY161.5 billion, or 25.1% of its revenue, to R&D in 2022 alone. Over the past decade, Huawei has invested a massive CNY977.3 billion in R&D, demonstrating its unwavering commitment to innovation.

Huawei: Sowing the Seeds of Innovation

Much like the creation of new parcels of fertile land, the creation of patents is vital to prosperity. But the mere creation of patents is not enough. It’s crucial to have the ability to rent or share that ‘land’ so it can be put to its highest and best use. Huawei’s approach to its patent portfolio reflects this principle. Through the announcement of royalty rates for various technologies, Huawei is not only capitalizing on its ‘land’ but also enabling other players in the industry to benefit from its innovations. This approach ensures that these fertile parcels of innovation can yield their full potential, driving the growth of the entire telecom ecosystem.

Huawei’s patent leadership extends beyond the strategic to the geopolitical realm. The company’s influence in shaping industry standards over the past two decades has been significant, an influence that carries notable geopolitical weight. This is a new development, an evolution that has positioned Huawei at the helm of technological innovation. This leadership role has implications not just within the realm of technology, but also in the corridors of geopolitical power, affecting the interplay of nations on the world stage.

Huawei’s Patents: Catalyzing Progress in the Global South

Huawei’s leadership in patents presents an intriguing opportunity for the Global South, a region that has often lagged behind in the global technological race. Gaining access to Huawei’s patented technologies could catalyze a wave of technological advancement in these regions, fostering innovation in local telecom sectors and driving economic growth.

For instance, consider the potential impact on African nations. The African continent is home to over 1.2 billion people, yet only about 28% of the population has access to the internet. Access to Huawei’s patented technologies, especially in the realm of 4G and 5G technologies, could revolutionize this landscape. It could enable local telecom operators to provide affordable, high-speed internet access to millions of people, thereby bridging the digital divide and fostering economic growth.

The implications for sectors such as education, healthcare, and e-commerce are profound. In education, for instance, access to the internet can open up vast learning resources for students in remote areas. In healthcare, it could enable telemedicine services, bringing quality healthcare to the doorsteps of those living in remote areas.

Furthermore, the affordable rates announced by Huawei for its 4G and 5G technologies could make high-speed internet access more affordable in these regions. With the announced rate caps of US$1.5 per unit for 4G handsets and US$2.5 per unit for 5G handsets, Huawei is making these technologies accessible to a wider audience.

This access to advanced technology could lead to a transformation in the telecommunications landscape of these regions. It could enable them to leapfrog technological hurdles, such as the need for extensive wired infrastructure, and leap directly into the era of high-speed wireless communication. This could foster a culture of innovation, as local businesses and entrepreneurs find new ways to leverage these technologies to create value. And this can give these nations a greater voice and influence on the global stage.

In conclusion, Huawei’s leadership in patents is more than just a corporate milestone. It could be a catalyst for change in the Global South, driving technological advancement, fostering innovation, and fueling economic growth.

Huawei’s Benevolent Blueprint in Patent Licensing

Huawei’s approach to patent licensing reflects not just a strategic business decision, but also the influence of traditional Chinese values, notably the Confucian concept of benevolence or “ren”. Rooted in the teachings of the ancient Chinese philosopher Confucius, “ren” is a complex and multifaceted concept that embodies ideas of kindness, humanity, and benevolence. It emphasizes the importance of moral obligations and relationships among individuals and society at large.

In the realm of patent licensing, Huawei’s commitment to licensing its standard essential patents (SEPs) on fair, reasonable, and non-discriminatory (FRAND) principles is a tangible manifestation of this Confucian benevolence. Instead of maximizing profits at the expense of others – a criticism often levied against the Western corporate model – Huawei is guided by a philosophy of balance and mutual benefit.

The announced royalty rates underscore this approach. By setting a cap on the rates for various technologies, Huawei is ensuring that other players in the industry can access its technologies without being subjected to prohibitive costs. This demonstrates a willingness to share the fruits of its innovation for the broader good of the industry, rather than hoarding them for its own exclusive benefit.

Alan Fan, Vice President and Head of the Intellectual Property Rights Department at Huawei, emphasized this balance in his statement: “We believe reasonable royalty rates will incentivize both the creation and adoption of innovations.” Here, Fan is expressing a key tenet of Confucian philosophy – that the pursuit of self-interest should be balanced with obligations to others and to the society at large.

In conclusion, Huawei’s approach to patent licensing provides a valuable insight into how traditional Chinese values continue to shape the practices of one of the world’s leading technology companies. It serves as a reminder that in our interconnected world, technology and innovation are not just about pushing the boundaries of what’s possible, but also about fostering a spirit of sharing and cooperation for the common good.

Navigating New Frontiers

The rise of Huawei as a global patent leader represents a new frontier in the telecom industry. The new parcels of fertile land that Huawei has cultivated in the landscape of innovation are set to yield bountiful harvests that will shape the future of the industry. As industry professionals, understanding these nuances is key to navigating this evolving landscape effectively.

But there’s more to be done. Huawei’s rise to patent leadership is not just a corporate milestone; it’s a call to action for the industry. As we navigate this frontier, we must engage in meaningful dialogue, forge new partnerships, and explore new ways of leveraging these fertile parcels of innovation for the common good. The cultivation of this land has just begun, and it’s up to us to ensure it yields its full potential.

About the Author(s)

Andy Mok

Senior Research Fellow Senior Research Fellow of Center for China and Globalization, Commentator of CGTN

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