Huawei licenses 5G patents to rival as U.S. sanctions force the Chinese giant to seek new revenue

Chinese tech giant Huawei said on Friday it will license its 5G technology to rival phone maker Oppo as it seeks to unlock a new revenue stream after its smartphone business was crushed by US sanctions.

Huawei and Oppo, the world’s fourth-largest smartphone maker, signed a “global patent cross-licensing agreement that covers the core patents of the cellular standard, including 5G.”

Huawei has a massive portfolio of over 100,000 patents worldwide. He is one of the top patent holders in 5G technology, the next-generation ultra-fast mobile internet seen as key to the foundation of future industries such as artificial intelligence and autonomous cars.

When a new generation of cellular technology is developed, so-called global standards must be created. These are protocols, technical specifications and designs that enable interoperability between 5G networks worldwide and allow smartphones to communicate with those networks.

Industry bodies are tasked with creating them and companies like Huawei will contribute to their creation. These companies create technologies that they then patent. Patents that are critical to standards, such as 4G or 5G, will be considered a “standard essential patent” or SEP.

Huawei has not been aggressive in monetizing these patents historically against some of its competitors such as Nokia and Ericsson.

In 2019, however, the US used a number of measures, including an export blacklist, to cut Huawei off from critical semiconductors it needed for its smartphones and some other products. This crushed the company’s smartphone business, which was once number one in the world at the time.

Last year, the Chinese tech giant indicated that it would start selling its technology to other companies through patents.

The company previously said it expects to earn $1.2 billion to $1.3 billion in revenue from licensing its intellectual property between 2019 and 2021. Huawei said it met its intellectual property revenue expectations for 2021, but did not provide a figure.

5G has become a contentious part of the broader technology battle between the US and China. Both nations view it as a critical technology. But the US has raised concerns that Huawei poses a national security threat and has pressured other nations to ban the Chinese firm from accessing their 5G infrastructure. Huawei has repeatedly denied that it poses a threat to national security.