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Huawei’s vice president, Deng Tao, has called for increased cooperation on IP matters between international technology companies. “In order to build a healthy global intellectual property rights ecosystem that drives technological and social progress, it is vital that we adopt cooperative and collaborative approaches that respect and protect IPR," he said, continuing: "We appeal to global organizations, be they governmental bodies, industry associations, or enterprises, to expand their capabilities for IPR collaboration and create viable mechanisms that enable greater IPR access, protection, and paid use. Adopting such approaches will mitigate and help to resolve disputes, while also encouraging innovation and technological progress."
Deng’s comments were made at a recent ambassador roundtable in Beijing hosted by USITO, a trade association that represents the American information communication technologies industry in China, at which he was giving the keynote address.
Those in the west who take a blanket view of Chinese companies as IP infringers might be surprised to hear such a call for transparency and collaboration, particularly to an audience of Americans. But Huawei and other Chinese technology companies have got increasingly good reason to consider themselves as major players in the sector, and it is in their interest to make sure that the market place knows that they are willing to play by the rules.
Huawei is at pains to show that it is doing everything it can to use IP in a manner that is beneficial to the whole industry. The company spends around $300 million every year in legitimately using others’ patents, and is also involved in dozens of cross-licensing agreements. Deng’s comments echo those of Haibo Wang from ZTE. In an interview in the current issue of IAM, he called for more licensing programmes as an alternative to the “frequent and frivolous patent litigation” that damages the industry – however he also remarked on the high cost of licensing, arguing that it should be a more reasonable percentage of the overall cost of the product.
Huawei and ZTE’s attitude is understandable. As relative newcomers to the international marketplace, Chinese companies are not as deeply embroiled in the smartphone wars as their more established US and European counterparts, and they will no doubt want to keep it that way. But as Chinese mobile manufacturers become more and more successful outside the domestic market, it is perhaps inevitable that they will become vulnerable to patent attack from their global competitors. In fact, this is something that a recent report put together by the China Academy of Telecommunication Research, a branch under the Ministry of Industry and Information Technology, has explicitly warned of.
Huawei has also got further reasons to want an open and transparent IP marketplace. The company has encountered a number of problems as it expands globally. These include losing out on a major Australian deal, and being forced by the US government to return patents purchased from 3Leaf - issues that have been based on security concerns by the countries concerned.
So it does seem that Huawei has got more battles to fight than the average Western company in establishing itself as a global player in the field. In addition to the expressed security worries, some of these obstacles may also be due to general suspicions about Chinese companies’ attitudes to intellectual property. A fully transparent IP market then would allow them to demonstrate that they have nothing to hide.
In such a fast-moving sector, it is difficult to predict what the smartphone marketplace will look like, even in the near future. But if Huawei and ZTE continue to grow - and assuming they stick to their pledge to seek collaboration and cross-licensing rather than court confrontation - it could become a much less litigious place. And that may well be a good thing for all smartphone companies, not just the Chinese players.