Huawei and InterDigital settle on a new license deal

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After a year-long battle over patents and infringement, Huawei and InterDigital have signed a trade agreement. This agreement will allow Huawei to use InterDigital’s technology in its smartphones up to 2023. Although the terms of the agreements have not been disclosed, Huawei seeks to gain many benefits from it. As the company is one the verge of releasing 5G technology throughout the world. Therefore, missing out on some US tech would have proven to be a big loss for them. Now with this trade agreement in place, Huawei is one step closer to its 5G dominance.

A Rought Patch

InterDigital and Huawei have had a rough year battling each other over patent disputes. In 2019 Huawei sued InterDigital overs its unfair patent fees, allowing the company to make a hefty profit. This fact held some influence as InterDigitla makes 96% of its revenue in patent royalties. So the dispute could see it losing a sizable proportion of its revenue stream. But then in a twist of fate, InterDigital sued Huawei instead of infringing its patent in the new 3G, 4G, and 5G devices.

The feud took many twists and turn until the COVID-19 struck the world. Mobile markets went crashing down and companies like Huawei and Interdigital would lose a huge part of their revenues. Some estimates suggest it would take 2 years for the Market to recover from this loss. Others suggest it would take 10 years, as the virus does not appear to be slowing down. So, amidst this chaos, the two companies agreed to settle their disputes and come to a new trade agreement.  

In order to minimize their losses which are estimated to be in $Billions. The two companies will work together until 2023, again in a mutual relationship. Huawei will use InterDigital’s technology to enhance its devices and make its impact once again in the US market. Whereas. InterDigital will continue to receive a hefty patent fee for allowing Huawei to use its technology amidst the US-China Trade war.  

Source: CaiXinGlobal, GizmoChina, Reuters

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