Chinese technology giant Huawei is to start charging royalties to use its patents in IoT products as well as mobile handsets and Wifi 6 devices.

“Huawei is willing to share cutting-edge innovations in the form of patents with the world,” said the company’s chief legal officer, Song Liuping. “These will support the common, sustainable development of industries globally.”

Over the past 20 years, Huawei has been a major contributor to mainstream ICT standards, such as cellular, wifi and multimedia codecs.

His remarks were made at Huawei’s annual flagship event last week on innovation and intellectual property protection in Shenzhen. The event featured sharing sessions by experts from diverse areas, covering technologies applicable at home, on the go and at work. These include leading research on 5.5G, audio and video technologies, ten-size adjustable aperture in mobile phones, a general obstacle detection network that helps cars identify abnormal objects outside the white list of general obstacles, and algorithms that can enable intelligent production scheduling and optimisation.

Huawei says it is committed to licensing its standard essential patents (SEPs) on fair, reasonable and non-discriminatory (frand) principles. The event saw Huawei announcing royalty rates for 4G and 5G handsets, Wifi 6 devices and IoT products, all areas where Huawei is a SEP owner.

The rate caps for 4G and 5G handsets are $1.5 per unit and $2.5 per unit, respectively. Royalty rate for Wifi 6 consumer devices is $0.5 per unit. For IoT, the rate for IoT-centric devices is one per cent of the net selling price, capped at $0.75, while the rate for IoT-enhanced devices ranges from $0.3 to $1 per unit.

Alan Fan, head of Huawei’s intellectual property rights department, said a positive cycle where innovators are protected, rewarded and encouraged is key to sustainable innovation.

“Huawei takes a balanced approach to patent licensing,” he said. “We believe reasonable royalty rates will incentivise both the creation and adoption of innovations.”

To date, Huawei has entered into almost 200 bilateral patent licences, according to Fan. In addition, over 350 companies have obtained licences to Huawei’s patents through patent pools. Under these licences, Huawei’s total past royalty payment is about three times its total royalty collection, and its 2022 licensing revenue amounted to $560m.

While addressing the event remotely, Tomas Lamanauskas, deputy secretary-general of the International Telecommunication Union (ITU), said Huawei had been a key player in the collaborative process of supporting cost-effective, inclusive innovation of scale.

“As we continue to tackle global challenges and work towards rescuing the sustainable development goals (SDGs), conducive policies and frameworks are essential to help innovation ecosystems flourish,” Lamanauskas said.

The company’s cumulative R&D investment over the past ten years totalled CNY977.3bn. In 2022, its R&D expenditure stood at Y161.5bn, or 25.1% of its revenue. The 2022 EU Industrial R&D Investment Scoreboard put Huawei fourth worldwide.

Huawei has entered patent licences with leading tech industry players such as Samsung and Oppo, and top automakers including Mercedes-Benz, Audi, BMW, Porsche, Subaru, Renault, Lamborghini and Bentley. It is also an active advocate and supporter of major global open-source industry organisations, according to Fan.

Huawei’s official licensing web site was also launched at the event. This web site provides details about the company’s bilateral licensing programmes ranging from mobile handsets to wifi and cellular IoT.

“Intellectual property is the great engine of cooperation in technology,” said Randall Rader, former chief judge of the US Court of Appeals for the Federal Circuit. “It advances technology for everyone to enjoy.”