Huawei and Qualcomm say they have agreed to a multi-year patent licensing deal spanning 5G, computing, artificial intelligence and networking. Alongside reciprocal access to their patent portfolios, the arrangement includes a planned Qualcomm purchase of selected Huawei US patents.
The companies say completion depends on regulatory approvals. Their announcement gives no firm closing date, leaving the patent purchase pending completion of the transaction.
A patent agreement spanning wireless and AI
The arrangement combines cross-licensing, giving each company permission to use covered patents held by the other, with the acquisition of selected US patents. Qualcomm’s planned purchase covers computing, AI, networking and other technologies, giving the transaction a scope that extends beyond cellular communications.
Huawei says completion would bring the total value of its patent licensing agreements to more than $6.9 billion. That figure describes Huawei’s wider licensing agreements; it does not establish a price for this particular transaction.
The companies have described the agreement as multi-year without specifying its exact duration. Their announcement also leaves the number of patents involved and the purchase price undisclosed.
Alan Fan, Huawei’s chief intellectual property officer, described the agreement as recognition of both companies’ research. He pointed to Huawei’s investment in fundamental R&D and contributions to 4G and 5G standards, including signal transmission technology using polar codes.
John Han, executive vice-president and general manager of Qualcomm Technology Licensing, similarly emphasized Qualcomm’s work on successive generations of wireless technology. He said the agreement also recognized Huawei’s innovation and intellectual property in 5G and other fields.
A licensing relationship dating to 2001
The companies’ patent licensing relationship stretches back to 2001, when Qualcomm announced a license allowing Huawei to develop and sell equipment using its CDMA technology.
Their history also includes a licensing dispute resolved in July 2020. Qualcomm said the settlement accompanied a long-term global patent licensing agreement that included rights to certain Huawei patents and applied to sales of certain Huawei wireless products from January 2020.
Qualcomm recorded $1.8 billion in revenue in the fourth quarter of fiscal 2020 from amounts due under that settlement and royalties for the March and June 2020 quarters. The total therefore combined settlement obligations with licensing royalties.
Qualcomm said settlement payments were scheduled in installments through June 2021. Huawei paid the first installment and the royalties due for those two quarters in Qualcomm’s fourth fiscal quarter of 2020.