back to article Huawei faces UK sales ban if it doesn't cough up 4G patent tithes

Huawei may be barred from flogging its smartphones in the UK after Unwired Planet International chalked up a convincing win in a long-running patent infringement lawsuit. The High Court of England and Wales today ruled that Huawei must pay Unwired licensing fees for using Unwired's patented intellectual property in 4G handsets …

Somthing wrong with those numbers

"Huawei originally offered to stump up 0.34 per cent of revenues on 4G equipment [...] the court decided to award Unwired 0.051 per cent on 4G equipment and 0.052 per cent on handsets"

Surely the award is not six times smaller than what Huawei offered?

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Re: Somthing wrong with those numbers

Looked at PDF and that's the numbers! Huawei not terribly unhappy I think. Grasping IP company very unhappy I hope.

Please reassign this judge to family court. Mommy and Daddy want to argue over monetary sillys? Pittance for you and pittance for you and court ordered trust fund for kids education contributed to (heavily) by both combatants. No "scoring points" with this judge!

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Re: Somthing wrong with those numbers

The article has misplaced the decimal point for Huawei's original offer - according to the PDF, it was 0.034%.

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Won't affect global business operations because they sell bugger all in the UK compared to the rest of the world. Probably will blame Brexit for it as well !!!!

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I wonder if this is one of those case where a a judgement in any EU country applies across the whole of the EU? That could affect things a tad more.

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WTF?

Something fishy

I wonder what they were paying before Ericsson sold the patents. Seems wrong to have possibly massively raised the license fee after someone built stuff with the properly licensed patents.

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What were the terms of the original deal?

Sounds like Huawei signed up for a adjustable-rate loan with a 30-year amortization and a 5-year term.

They should have consulted someone that could have told them it's a good idea to secure the future cost of something you need to keep paying off, instead of letting the terms be re-negotiated at the whim of whatever troll owns the patent now.

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Re: What were the terms of the original deal?

According to Ericsson's press blurb regarding the deal in early 2016, the FRAND royalties payable by Huawei were sekrit.

However, this claim by Samsung regarding the deal between Unwired and Ericsson may explain Unwired's attempt at a stick-up:

From http://www.lexology.com/library/detail.aspx?g=82177652-ab43-4be7-94f9-fbad9f87d51c

"The clause sets a minimum percentage of the net sales revenue of the third party, which must be paid by Unwired Planet to Ericsson. This minimum percentage is payable regardless of whatever royalty rate has been agreed between Unwired Planet and the third party (e.g. if the minimum percentage was 50% and Unwired Planet had agreed a licence based on a royalty of 25% of net sales revenue, then for every £1 sold by the licensee, Unwired Planet would be paid 25p but would still have to pay Ericsson 50p)."

I.e. the bigger the fish Unwired goes after, the higher they have to set the rates, or they'll lose their own shirt to Ericsson. Of course, how you get the third party to cough up their net revenue on a particular product is another matter...

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Interesting

I'd be surprised if Huawei refuses. It sounds like they accept it and it's much closer to what they offered than the obviously inflated demand off "unwired".

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Anonymous Coward

If Huawei agreed an payment plan with Ericson

then the IP troll bought something like a sitting tenant, existing agreements should have been part of the purchase details and the troll knew this before purchase.

Unless they can show that Huaweu reneged on the original agreement then how did they get to go to court?

I don't like Huawei but this seems a bit unfair to attempt to charge them for not paying for use of the patents when clearly they did

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Re: If Huawei agreed an payment plan with Ericson

You have no idea what an IP troll is. Purchasing a patent does not make you an IP troll.

IP trolling is when you attempt to register a patent, or extend the range of an existing patent, into areas that clearly do not belong to you and you have no credible claim to.

Purchasing a patent that is already in force and being paid for is simply a matter of buying an asset. The company selling it get a return on the work they did in developing the technology, the company buying it invest in something that will give them a return on what they paid for it.

If you forbid the buying of patents you significantly devalue the companies that develop the technology. Those patents are their prime asset. If you devalue the companies, you significantly limit their ability to invest in further development. Everyone loses.

Whether the new owner of the patent is playing fair in establishing a new licensing deal (after the previous one obviously expired) is a different matter and the point of FRAND.

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Unhappy

Re: If Huawei agreed an payment plan with Ericson

"Purchasing a patent that is already in force and being paid for is simply a matter of buying an asset. "

Humbug. Patents were originally intended to benefit and encourage inventors, but today that intention has been distorted into a welfare scheme for large companies. I bet the original inventors of these patents got a one-time bonus of €1000 or so. Now some company that had nothing to do with the invention at all will get free money from (indirectly) Huawei's customers. One of the real downsides of modern capitalism.

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Re: If Huawei agreed an payment plan with Ericson

> I bet the original inventors of these patents got a one-time bonus of €1000 or so

As a recipient of several of these, I can agree that the original inventors will get such sums. But at the same time they are drawing a salary and are tasked with investigating such things on behalf of a company, with the use of expensive company resources to do these investigations. In a lot of these patents, not necessarily all, it would be difficult for someone to actually come up with the idea, prove it worked, and then spend the time and effort needed to get it into a standard, as well as forking out the large sums of money required to pursue the patent in the first place.

Yes, some patentable things can be bashed together in a garden shed, but increasingly in many areas, it takes a large investment to some up with small incremental ideas that together form part of a larger whole. I'm not bitter in the slightest about my patent awards.

Sure, there are problems in the whole area of patent law, but I'm not sure being able to trade ownership rights is one of them.

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Re: If Huawei agreed an payment plan with Ericson

"I bet the original inventors of these patents got a one-time bonus of €1000 or so"

You seem a bit confused about how things work in the real world.

The original inventors got a full time job that paid a salary for the duration of the time it took to invent. The company that employed them took the risk of paying them all that time when it could have amounted to nothing. The company therefore rightfully owned the patent and got the profit from it, otherwise why would they employ them?

"Now some company that had nothing to do with the invention at all will get free money"

The company that had nothing to do with the invention paid for that patent. They got nothing for free. They thought they could make money from it. Otherwise, why would they buy it?

They paid the company who owned the patent, who obviously needed/wanted money upfront and therefore sold the patent. Otherwise, why would they sell it?

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Is Extortion still a thing?

Given that the Judge's award is so much nearer to Huawei's offer than UP's demand (some 34 to 45 times that awarded), shouldn't the latter be investigated for Extortion?

UP being subsequently banned from "trading" in the UK, ie they have to give away the IP, would be a fair and reasonable outcome.

That's the trouble with UK courts, UP gambled on greed and lost, yet they didn't lose.

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Re: Is Extortion still a thing?

They did lose. The amount was set in stone. They cant go gouging elsewhere and will end up paying costs.

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Jurisdiction

from the article:

The judgment also set FRAND licensing rates between Huawei and Unwired for the rest of the world.

What authority does a UK-based judge have to either:

1) rule on the rates applicable outside the jurisdiction of UK courts;

2) apply rates of a UK patent outside its area of effect - the UK;

3) set rates for patents not issued by the UK's patent issuing authority?

Unless the parties jointly agreed to allow the judge to rule on those matters?

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