InterDigital Wireless Inc disclosed that it is free to license its 5G network technology to Huawei Technologies Co Ltd despite the threat of a U.S. ban on selling chips and software to the form of the Chinese communications.
InterDigital and Qualcomm (QCOM) are the two leading American holders of patents for wireless networking technology, including the 5G networks rolling out this year in China. However, last week President Trump issued a sanction on U.S. firms to sell technology to Chinese counterparts though officials say that some of these restrictions are valid for only 90 days.
InterDigital generates revenue by developing wireless technologies and then licenses out its patents. It believes it can still strike the 5G deal with Huawei as export control laws are not applicable to patents, which are public records and therefore not confidential technology.
The same is the situation with Qualcomm who too generates revenue by licensing out patents which only means that the company cannot sue the buyers.
Following Trump’s sanctions, both the companies are now in the middle of a license dispute with Huawei over 5G technology. It is reported that Huawei sued InterDigital in China as the latter was charging too high for patents. On the other hand, Qualcomm has had a patent deal with Huawei since 2014, but Huawei stopped paying in 2017.
Huawei, the world’s third-largest smartphone provider and also a major provider of telecommunications gear, is a big customer for both InterDigital and Qualcomm. The Chinese tech firm accounted for 14% of InterDigital’s $533 million in revenue in 2017.