Huawei’s Strategy To Take Over The (Smartphone) World
In the smartphone industry, patent litigation is a daily occurrence. The long-running battle between Apple and Samsung is now headed for the Supreme Court in the US – while another intense lawsuit between Ericsson and Apple was recently settled out of the court.
Now a new trend may be emerging in the East. In the past, Chinese companies were likely to be easy targets for intellectual property litigation brought by western companies. However, the Chinese technology giant Huawei is changing the competitive landscape in this field. Huawei aims to overtake Samsung and Apple in the smartphone market, already ranking first in international patent applications in 2015 with 3,898 published PCT applications.
On May 25th, Huawei announced that it was suing Samsung for infringement of smartphone patents. Huawei has filed lawsuits in the United States (California) and China (Shenzhen) seeking compensation for what it said was unlicensed use of fourth-generation (4G) cellular communications technology, operating systems and user interface software in Samsung phones.
Samsung told the BBC it would vehemently defend its business interests. The specific patents involved have not been disclosed. However, Huawei’s intellectual property chief indicated it was seeking permission to use some of Samsung’s technologies in return, rather than seeking a payment.
These facts appear to highlight Huawei’s tactic to become a dominant player in the global smartphone market. Huawei is attempting to acquire as many wireless standard-essential patents as possible, which can create a situation in which other competitors such as Apple, Samsung and Ericsson cannot manufacture or sell smartphones without Huawei’s technologies that protected by these patents. As a consequence, these competitors have only two options: to acquire a license from Huawei or risk a court battle. Nevertheless, what is best for Huawei might be a settlement out of the court.
In the beginning of this year, Huawei and Ericsson agreed to extending their global patent license agreement between the two companies, after long-running patent lawsuits. The agreement included a cross license that covers patents relating to both companies’ wireless standard-essential patents (including the GSM, UMTS and LTE cellular standards). Under the agreement, both companies are able to access and implement the other company’s standard essential patents and technologies globally.
As a result of this successful cross-license agreement with Ericsson, Huawei may arguably have initiated the lawsuit with Samsung with the expectation of a similar result. If Huawei can get permission to use the Samsung’s patents in this manner, it will be a big step for Huawei to in effect take over the smartphone world.