Despite ban by Trump, Huawei still gets pay for 5G patents

Huawei Technologies Co. owns the most patents on next-generation 5G technology, ensuring the Chinese company will get paid despite Trump administration efforts to erase it from the supply chain, according to a new study.

The study by two research firms identified the inventions most closely connected to the 5G standards and found that six companies owned more than 80 percent — Huawei, Samsung Electronics Co., LG Electronics Inc., Nokia Oyj, Ericsson AB and Qualcomm Inc., the only U.S.-based company in the group.

That may be awkward for President Donald Trump, whose administration has launched a global effort to shut out Huawei, accusing the Chinese company of being a security threat.

“Even if they hire some other company to build the 5G infrastructure, they still have to pay the Chinese company because of the intellectual contribution to develop the technology,” said Deepak Syal, director of GreyB Services Pte., a technology research firm that conducted the study with database firm Amplified.

Identifying how many patents a company holds — and how key they are to the industry standards — will help determine who profits most from the next generation of technology that promises to revolutionize developments such as autonomous cars, robotic surgery and connected homes.

Industry standards are critical to ensure devices work together and communicate with each other. Tech companies get together to establish those standards and pledge that any relevant patents will be licensed on “fair, reasonable and non-discriminatory” terms.

There have been global patent wars for years over how to define those fair terms and who’s entitled to how much money in royalties. They were at the heart of since-settled fights, including Apple Inc.’s scorched-earth battle with Qualcomm, and Huawei’s dispute with Samsung. Huawei has also stopped paying Qualcomm what may amount to billions in royalties amid a dispute.

Courts will ultimately have to decide, though, if the patents really are essential to the standard, and whether they’re valid or not.

As part of the Trump administration’s efforts, Secretary of State Michael Pompeo last week said European countries “need to get it out of their system. They need to use Western technologies.”

Huawei is popular for its global footprint and advanced technology.