[Valuable Intellectual Property] '5G Powerhouse' Huawei Completely Surrenders

Cross-License Patent Agreement with Japan's Sharp
Demanding Royalties from Global Companies for Communication Patents
Weaponizing Patents Amid US Trade Sanctions Pressure

Which company holds the most patents in the world? It is the Chinese company Huawei. As of the end of last year, Huawei held 120,000 patents. It is especially strong in 5G communication technology. Huawei is using its patents as a weapon against leading global telecommunications companies and leveraging them as a means to overcome the US-China trade conflict.

According to the Korean Intellectual Property Office on the 29th, last month Huawei and the Japanese electronics company Sharp signed a cross-license agreement for standard essential patent technologies required for the 5G standard. A cross-license allows both companies to mutually use each other's patents. Sharp stated, "We are pleased to have signed the agreement with Huawei under fair, reasonable, and non-discriminatory terms."

However, the background of this agreement was not so pleasant. It was concluded after Huawei, whose telecommunications equipment exports were blocked by US trade sanctions, demanded royalty payments for telecommunications patent technologies from about 30 Japanese companies. In particular, Huawei was seeking a breakthrough to escape US sanctions by launching royalty attacks against Japanese small and medium-sized enterprises and startups. According to KOTRA, Huawei was the world's number one company in 5G standard essential patent applications as of last year, with a market share of 15%. Qualcomm ranked second with 1%, and Samsung third with 8.8%. Any company engaged in 5G telecommunications business is inevitably vulnerable to Huawei's patent attacks.

In a recent 5G communication quality evaluation of domestic mobile carriers announced by the Ministry of Science and ICT, LG Uplus, which uses Huawei equipment, showed a remarkable performance with its 5G speed in the Seoul area improving by more than 20% compared to the previous year.

Huawei, which boasts such powerful 5G technology, filed a lawsuit demanding over 1 trillion won in patent royalties from Verizon, the largest US mobile carrier, in 2020. In August, it signed cross-license agreements with Swedish telecommunications equipment company Ericsson and recently with Sharp. Analysts say that as Huawei struggles with semiconductor supply due to US regulations, it is generating revenue based on patents to compensate for sales losses and sustain corporate growth. Experts believe that Korean companies, which are second to none in 5G technology, must prepare for Huawei's patent attacks.

Hiroko Osaka, Head of Asia Marketing at global patent information firm LexisNexis, said, "The importance of intellectual property protection has been emphasized in the competition to gain superiority in advanced technology and data, leading to a surge in patent applications by Chinese companies." She predicted, "Because of the standard essential patents held by Chinese companies, companies will have to pay considerable costs to challenge each patent or pay licensing fees to Chinese companies."