Chinese smartphone giants Huawei and Xiaomi reach global patent cross-licensing deal, fuelling both firms’ push into premium handset segment

Huawei Technologies and Xiaomi Corp, two of China’s largest smartphone vendors, have set aside their intellectual property (IP) dispute to forge a global patent cross-licensing deal that covers multiple communications technologies including 5G, which could help bolster the expansion initiatives of both companies.

“This licensing agreement once again reflects the industry’s recognition of Huawei’s contributions to communications standards and will help us enhance our investment in researching future mobile communications technologies,” said Alan Fan, head of Huawei’s intellectual property department, in a joint statement released on Wednesday.

Before that deal was reached, Shenzhen-based Huawei – holder of the most 5G patents worldwide as of April 2022, according to data from German intelligence firm IPlytics – had been locked in a patent-infringement lawsuit against Xiaomi covering the long-term evolution 4G standard, smartphone photography and a screen-lock method.

Xiaomi, headquartered in Beijing, made an attempt to nullify the screen-lock patent in April, but that action was rejected by the China National Intellectual Property Administration in early September.

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The new patent cross-licensing agreement between Huawei and Xiaomi “shows that both parties recognise and respect each other’s intellectual property”, Xu Ran, general manager of corporate business development and IP strategy at Xiaomi, said in the joint statement.

Xiaomi reasserts goal to challenge Apple’s iPhone at launch of new products

“Aiming for the high-end [of the smartphone market] forces us to seek breakthroughs in technology, while ensuring our future development and survival,” Lei said at Xiaomi’s product launch event last month.

He also pledged to invest in a range of areas, including hardware, software, tech infrastructure and artificial intelligence as part of Xiaomi’s “strategic technology upgrade” programme, which involves 100 billion yuan (US$13.7 billion) on research and innovation projects in the next five years.

Xiaomi’s recruitment website showed that the firm is currently hiring a range of system-on-a-chip (SoC) engineering jobs. One post described this role as being “in charge of validating Arm central processing unit modular function and performance”, referring to technologies from British semiconductor design firm Arm.

That recruitment effort has sparked speculation that Xiaomi was pushing the development of its own smartphone SoC. Xiaomi did not immediately reply to a request for comment on Thursday.

Huawei teases new products but still tight-lipped over mystery chip

US-blacklisted Huawei, meanwhile, has poured more than 977.3 billion yuan in various tech research and development programmes over the past 10 years, with more than 55 per cent of its employees involved research roles.

The company held more than 120,000 valid licensed patents as of 2022, more than 90 per cent of which are for inventions, making it the largest patent holder in China, according to information on its website. It generated US$560 million in royalty revenue last year from its various patents.

Such deals that help push forward innovation in the industry would ultimately benefit consumers. Chinese consumers, for example, increasingly prefer state-of-the-art smartphone models, according to Amber Liu, an analyst at market research firm Canalys. Liu said “vendors benefiting from consumer product upgrades are motivated to invest in more product innovations to stay ahead of the technology curve”.

South China Morning Post