InterDigital, which develops digital mobile and video technology, has announced that the company has settled all litigation against Huawei and both of them have entered into a worldwide patent licensing agreement.
This new non-exclusive licensing agreement is a multi-year one and is set to run through 2023. It covers royalties from the sale of some of Huawei’s 3G, 4G and 5G wireless telecommunications products.
While the issue between both the companies seem to have been resolved, terms for the same have not been disclosed yet. In a statement, William J. Merritt, InterDigital‘s president and CEO, said: “This agreement, reached amid challenging circumstances given the current economic downturn, highlights the strength of our business and the value of InterDigital’s contributions to multiple generations of wireless and video standards.”
For the uninitiated, Huawei had sued InterDigital in January 2019 in China, claiming unfair terms for the licensing its patents. Then in December last year, InterDigital sued Huawei accusing the company of infringing five patents related to industry standards for 3G, 4G and 5G telecommunications.
Patent infringement suits are very common in the technology industry. Early this year, filing lawsuit against Verizon, Huawei said in a statement that it has paid out more than $6 billion for use of patented technologies, with 80 percent of those license fees going to US-based companies. It also added that since 2015, Huawei received more than $1.4 billion in license fees for its own patents.
Huawei, which is the world’s leader which it comes to telecom equipment, has been caught in the middle of the US-China trade war and has been put on trade blacklist by the US government since last year. This is severely impacted the Chinese giant’s ability to buy hardware, software and services from American companies.
In a regulatory filing, InterDigital said the licensing agreement runs through 2023, and covers royalties from the sale of some of Huawei’s 3G, 4G and 5G wireless telecommunications products.
InterDigital said the companies have also ended more than 15 months of litigation in China and the United Kingdom.
Huawei had sued InterDigital in January 2019 in the Shenzhen Intermediate People’s Court in China, claiming that the Wilmington, Delaware-based company was licensing its patents on unfair terms, according to a separate regulatory filing.
InterDigital countered in December 2019 with its own action before the High Court of Justice of England and Wales, accusing Huawei of infringing five patents related to industry standards for 3G, 4G and 5G telecommunications.
Talks to renew an earlier Huawei license had broken down, and the UK court would serve as a “neutral venue” to address the dispute, InterDigital said at the time.
Patent royalties accounted for about 96% of InterDigital’s revenue in 2019. InterDigital said a typical royalty might be $1.15 on a 3G or 4G smartphone that costs $500.
Terms to resolve the disputes were not disclosed. Huawei had no immediate comment.
In afternoon trading, InterDigital shares were up $7.85, or 15.7%, at $58.00, after earlier rising to $59.79.