A couple of months ago, our managing partner Anton Hopen wrote an insightful analysis about the threat that Huawei’s massive U.S. patent portfolio poses to domestic telecommunications companies. In January 2020, Huawei sued Verizon for $1 billion over Verizon’s alleged infringement of Huawei’s 230 U.S. patents. Because the U.S. government barred Huawei from selling its smartphones in the U.S., Huawei can freely assert its patents without any concern of a patent infringement counter-suit. This asymmetry creates a strong financial incentive for Huawei to be very litigious and operate essentially as a patent troll. To date, Huawei has made an estimated $5 billion by suing U.S. companies.
In a surprising strategy shift, last week, Huawei joined the Open Invention Network (OIN). This move opens up Huawei’s patents for royalty-free licencing for Linux developers. OIN is a consortium of companies who agree to cross-license their patents. Members of OIN include some of the biggest tech companies—Google, Microsoft, IBM, Sony, and Philips. OIN community contributes over 56,000 U.S. patents and has licensed these patents to over 3,200 companies, free of charge. Essentially, members of OIN agree to play nice with one another by making their Linux-based patents available to each other.
With Huawei joining this consortium, software developers who rely on open-source Linux-based software now can breathe a sigh of relief. What’s the motivation behind Huawei’s unexpected move? Time will tell. Perhaps, Huawei is extending an olive branch with a hope that the U.S. government would lift the ban and open up the lucrative U.S. market.