May 21, 2019
By Stephen Nellis
(Reuters) – InterDigital Wireless Inc said on Monday that it can license its 5G network technology to Huawei Technologies Co Ltd despite the threat of a U.S. ban on selling chips and software to the Chinese telecommunications firm, and patent attorneys said Qualcomm Inc likely also can do so.
InterDigital and Qualcomm are the two major American holders of patents for wireless networking technology, including the 5G networks rolling out this year in China. Last week, President Donald Trump issued an executive order restricting the ability of U.S. firms to sell technology to Huawei, though officials on Monday eased some of those restrictions for 90 days.
InterDigital, which generates revenue by developing wireless technologies and then licensing out the patents, said it believes it can continue its efforts to strike a 5G deal with Huawei because export control laws do not cover patents, which are public records and therefore not confidential technology.
“The addition of Huawei to the Entity List does not prevent InterDigital from entering into a patent license agreement with Huawei, because our patents cover technologies that are publicly available and therefore outside the scope of U.S. export control laws,” InterDigital spokesman Patrick Van de Wille told Reuters in a statement.
Qualcomm did not respond to a request for comment. But trade attorneys said the situation is likely the same for the San Diego-based company. Qualcomm also sells chips to Huawei, but only for Huawei’s lower-priced handset. It generates most of its profits from patent licenses.
“If you’re giving Huawei rights to your patents, all that means in effect is that you’re not going to sue them,” said Erick Robinson, a partner with Dunlap Bennett & Ludwig who formerly worked as a patent attorney for Qualcomm in China. “You’re not passing on any information whatsoever.”
Huawei, the world’s third-largest smartphone provider and also a major provider of telecommunications gear, is a big customer for both InterDigital and Qualcomm. The Chinese tech firm accounted for 14% of InterDigital’s $533 million in revenue in 2017, the most recent year for which figures are available.
Both American companies are in the middle of license disputes with Huawei over 5G technology. Huawei sued InterDigital in China in January, alleging the Wilmington, Delaware-based company was seeking to charge too much for its patents, a claim InterDigital disputes.
Qualcomm has had a patent deal with Huawei since 2014, but Huawei stopped paying in 2017. Qualcomm expects to get $450 million in “good faith” payments this year as the two sides negotiate.
(Reporting by Stephen Nellis; Editing by Greg Mitchell and Leslie Adler)