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Huawei to Collect Over $1 Billion in 5G Royalties, Despite U.S. Sanctions

Huawei to Collect Over $1 Billion in 5G Royalties, Despite U.S. Sanctions

Huawei seeks compensation for use of patents developed since 2019, despite allegations of technological theft and U.S. sanctions

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Huawei Technologies will collect royalties for the use of its 5G technology. The Chinese tech giant expects to receive more than $1 billion in patent licensing revenue between 2019 and 2021.

Jason Ding, director of intellectual property at the Guangzhou, China-based company, said that “for every phone using Huawei’s 5G technology that is capable of working, the company will receive up to $2.5 in royalties.”

Huawei is a leader in 5G patents and is ahead of Samsung, Ericsson and Qualcomm in this regard. With more than 4,000 types of patents, Huawei is seeking compensation for its contribution in protocols, technical specifications and designs that enable connectivity to 5G networks.

The announcement comes days after the Joe Biden-Kamala Harris administration unveiled a series of supplier licensing restrictions on Huawei’s supply chain.

The Chinese company’s phone sales have been affected since the sanctions implemented by the Donald Trump administration, which prevented it from accessing the supply chain for technology components.

Trump’s sanctions on Huawei were based on national security and formal charges issued by the Department of Justice, such as trade secret conspiracy, attempted intellectual property theft, wire fraud and obstruction of justice.

More sanctions for Chinese companies

A week before Secretary of State Antony Blinken meets with his Chinese counterpart Wang Yi in Alaska, the U.S. government included Huawei on a list of Chinese companies considered “a threat to its national security” on March 12.

The list of companies suspected of posing “an unacceptable risk to national security” is headed by Huawei Technologies Company, followed by ZTE Corporation, Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company and Dahua Technology Company, according to the Federal Communications Commission (FFC).

The acting chairman of the Federal Communications Commission, Jessica Rosenworcel. (Image: EFE)

This list provides meaningful guidance that will ensure that, “as next-generation networks are built across the country, they do not repeat the mistakes of the past, or use equipment or services that pose a threat to the national security of the United States or the safety and security of Americans.”

Video surveillance and telecommunications services provided by the companies and their subsidiaries are part of the suspicious operations mentioned by the FFC in the statement.

Biden’s restrictions on third parties in contracts with Huawei

New Biden-Harris restrictions on some Huawei Technologies suppliers have been announced. The new rules impose stricter conditions and modify previously approved export licenses, “prohibiting the use of items in or with 5G devices.”

The licenses affect the export of components such as semiconductors, antennas and batteries for Huawei 5G devices, and with Biden’s restrictions, the ban is more uniform.

The Biden administration also signaled that it intends to move forward with a rule proposed by the Trump administration to secure the information technology supply chain, a measure that gives the Commerce Department broad authority to prohibit transactions involving “foreign adversaries.”

Meng Wanzhou’s defense accuses US of intervention

Meng Wanzhou, daughter of the tech giant’s founder and who served as Huawei’s chief financial officer, was arrested at Vancouver airport in Canada in late 2018 due to an extradition request by the U.S. to face fraud charges.

Meng’s lawyers appeared before the Supreme Court on March 15 with the intention of presenting new evidence to fight extradition to the United States.

Media enter the courtroom for the extradition hearing of Huawei CFO Meng Wanzhou at the BC Supreme Court in Vancouver, British Columbia, Canada. (Image: EFE)

Meng is accused of using a Hong Kong shell company under the name Skycom to trade equipment with Iran, committing a clear violation of sanctions issued by Washington.

In addition, Meng’s defense, led by attorney Frank Addario, has argued that the U.S. is misleading Canada and contends that it is overstepping the bounds of its jurisdiction by prosecuting a foreign national for actions that took place in Hong Kong.

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