Huawei asks Verizon to pay over USD 1 billion for over 230 patents

Huawei Technologies Co Ltd has told Verizon Communications Inc that the US carrier should pay licensing fees for more than 230 of the Chinese telecoms equipment maker’s patents and in aggregate is seeking more than USD 1 billion, a person briefed on the matter said on Wednesday.

Verizon should pay to “solve the patent licensing issue,” a Huawei intellectual property licensing executive wrote in February, the Wall Street Journal reported earlier. The patents cover network equipment for more than 20 of the company’s vendors including major US tech firms but those vendors would indemnify Verizon, the person said. Some of those firms have been approached directly by Huawei, the person said.

The patents in question range from core network equipment, wireline infrastructure to internet-of-things technology, the Journal reported. The licensing fees for the more than 230 patents sought are more than USD 1 billion, the person said.

Huawei has been battling the US government for more than a year. National security experts worry that “back doors” in routers, switches and other Huawei equipment could allow China to spy on US communications. Huawei has denied that it would help China spy.

Companies involved, including Verizon, have notified the US government and the dispute comes amid a growing feud between China and the United States. The licensing fee demand may be more about the geopolitical battle between China and the United States rather than a demand for patent fees.

Huawei and Verizon representatives met in New York last week to discuss some of the patents at issue and whether Verizon is using equipment from other companies that could infringe on Huawei patents.

Verizon spokesman Rich Young declined to comment “regarding this specific issue because it’s a potential legal matter.”

However, Young said, “These issues are larger than just Verizon. Given the broader geopolitical context, any issue involving Huawei has implications for our entire industry and also raise national and international concerns.”

Huawei and US wireless carriers T-Mobile US Inc and AT&T Inc did not respond to Reuters’ requests for comment. Sprint Corp declined to comment.

The United States last month put Huawei on a blacklist that barred it from doing business with US companies on security grounds without government approval, prompting some global tech firms to cut ties with the world’s largest telecoms equipment maker.

Washington is also seeking the extradition of Huawei Chief Financial Executive Meng Wanzhou from Canada after her arrest in Vancouver last December on a US warrant.

China has since upped the pressure on Canada, halting Canadian canola imports and in May suspended the permits of two major pork producers.