(Source- datacenterdynamics)
Huawei Technologies has launched a lawsuit against MediaTek, Taiwan’s leading mobile chip developer, accusing the company of infringing on its intellectual property patents. This legal action represents Huawei’s ongoing efforts to bolster its collection of licensing fees and royalties. The lawsuit was filed in a Chinese district court, as reported by MediaTek in a filing to the Taiwan Stock Exchange. While MediaTek acknowledged the case, it stated that the lawsuit would not significantly impact its operations and declined to provide further comments on the matter. Details regarding the specific patents involved or the damages sought by Huawei have not been disclosed.
MediaTek’s Market Position and Relationship with Huawei
Huawei Sues MediaTek: MediaTek is a significant player in the global smartphone and tablet market, with top manufacturers such as Samsung, Amazon, Oppo, Sony, Vivo, and Xiaomi among its clients. Prior to the U.S. tightening its export controls on Huawei in 2020, MediaTek was also a key supplier for Huawei’s smartphone business. According to Counterpoint Research, MediaTek held a commanding 40% share of the global market for smartphone processors in the first quarter of 2024, leading the market ahead of Qualcomm and Apple.
Huawei Sues MediaTek in what some insiders see as a strategic move to secure royalty fees, enabling Huawei to continue investing in research and development. It is also seen as a demonstration of Huawei’s technological prowess. Huawei’s shift towards increasing its sources of revenue through patent lawsuits comes after its smartphone business suffered significant setbacks due to U.S. export restrictions.
Huawei’s Patent Portfolio and Royalty Collection Efforts
Huawei holds a substantial portion of standard-essential patents (SEP), critical for wireless communication standards, including approximately 20% of the world’s 5G-related patents. The lawsuit against MediaTek was first reported by Enterprise Patent Observation, a Chinese media outlet. Since 2021, following heightened restrictions from Washington, Huawei has intensified its efforts to collect royalties. The company’s licensing and cross-licensing agreements extend to major European automakers such as Volkswagen, Mercedes Benz, Audi, BMW, and Porsche. In 2022, Huawei signed cross-licensing deals for 5G technologies with Oppo and Samsung.
Last year, Huawei sought licensing fees from around 30 small and midsize Japanese companies, claiming they were utilizing its patented technologies. According to Huawei’s latest financial disclosures, the company generated $560 million in revenue from patent royalties in 2022, with approximately 200 companies currently paying royalties to Huawei. This aggressive stance in patent litigation highlights Huawei’s strategy to diversify its revenue streams and reinforce its position as a leader in technological innovation amidst global trade challenges.
