Huawei Presses Verizon to Pay for Patents -- Update
June 12 2019 - 12:36PM
Dow Jones News
By Sarah Krouse
Huawei Technologies Co. has told Verizon Communications Inc.
that the carrier should pay licensing fees for more than 200 of its
patents, according to people familiar with the matter, further
escalating tensions between the Chinese company and the U.S.
A Huawei intellectual property licensing executive wrote to the
U.S. wireless carrier in February, telling Verizon it should pay to
"solve the patent licensing issue," according to the people.
Verizon isn't a Huawei customer.
"We trust that you will see the benefit of taking a license to
our patent portfolio," the letter said, according to the people.
The patents at issue span core network equipment, wireline
infrastructure and internet-of-things technology, one of the people
said, and the matter could impact several of Verizon's vendors.
Huawei's letter came amid extensive efforts by American policy
makers and the Trump administration to limit the company's global
reach.
Representatives for Huawei and Verizon met last week in New York
to discuss some of the patents at issue, one of the people
said.
"We have no comment regarding this specific issue because it's a
potential legal matter. However, these issues are larger than just
Verizon," a Verizon spokesman said. "Given the broader geopolitical
context, any issue involving Huawei has implications for our entire
industry and also raise national and international concerns."
A Huawei spokesman had no immediate comment.
The U.S. has said Huawei's growing clout poses a national
security threat that could disrupt communications or facilitate
spying. The telecommunications equipment-maker has vehemently
denied it would ever do so.
Verizon and other large U.S. carriers have for years been barred
from using Huawei products in their domestic wireless networks and,
more recently, U.S. officials encouraged allies to eschew the
company's gear.
U.S. national security officials have told senior executives at
wireless carriers they are concerned the continued strengthening of
the world's biggest telecom gear maker could weaken smaller rivals
such as Nokia Corp. and Ericsson AB. That, in turn, could limit
choices for large carriers buying radio-access-network gear such as
base stations and antennas.
Those parts are critical to the development of next-generation
5G networks.
Carriers around the world are rushing to roll out those faster
wireless networks. Governments have sought ways to give their
countries an advantage in that infrastructure race.
Huawei's rival gear makers have long alleged that it has
benefited from copying and stealing intellectual property. The Wall
Street Journal has reported that the company's culture has blurred
the boundary between competitive achievement and ethically
questionable methods of gaining ground.
Huawei has said it is committed to complying with laws around
the world and has a track record of innovation.
There are signs the U.S. campaign is beginning to weigh on
Huawei, which sells core network components as well as consumer
technology like phones and laptops.
It scrapped the launch of a new laptop and paused production at
its personal-computer business because of restrictions on buying
U.S. components, the Journal reported Wednesday.
Last month, President Trump signed an executive order allowing
the U.S. to ban telecommunications network gear and services from
"foreign adversaries," without naming Huawei. The Commerce
Department banned American companies from selling components to
Huawei, but granted suppliers 90-day temporary exemptions.
--Stu Woo in Beijing and Kate O'Keeffe in Washington contributed
to this article.
Write to Sarah Krouse at sarah.krouse@wsj.com
(END) Dow Jones Newswires
June 12, 2019 12:21 ET (16:21 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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