Huawei Has a Massive Patent Portfolio, But Appears to Lack True Innovation

Today’s news of the arrest of Huawei Technologies Co.’s CFO, Meng Wanzhou, reignites the accusations of Chinese companies blatantly stealing intellectual property of US-based entities.  In 2012, Envision IP analyzed Huawei’s US patent portfolio, and concluded that the company’s patent portfolio, at that time, seemed to lack innovation compared to similarly patented technology owned by Apple, Qualcomm, and Motorola Mobility. The conclusion was based on analyzing forward citations of these companies, which indicated that Huawei’s patents had relatively no forward citations when compared to the patent portfolios of its US-based peers.

Back in 2012, Huawei owned approximately 1,500 US patents. The company has made strides in growing its patent portfolio over the last six years, with its US patent portfolio currently containing over 11,000 patents. The vast majority of its patents, nearly 10,700, were organically obtained by Huawei (either directly or through various subsidiary companies such as, for example, Futurewei Technologies). The remaining ~300 patents were acquired from third-parties. The chart below shows the year-by-year US patent issuance trend for Huawei, which has consistently increased every single year since 2005. Huawei has certainly become a tremendous patent owner, making IFI Claims’ annual list of largest US patent recipients in 2017.

Huawei’s US patent application filing rate has also increased steadily over the same time period, as can be expected. From 2005 to 2016, the company averaged a staggering 45% compound annual growth rate in new US patent application filings. For 2017, Huawei is named an assignee on over 2300 published US patent applications, and 926 to-date in 2018. We expect these numbers to rise as US patent applications typically publish 18 months after their earliest effective filing date.

Huawei has acquired a number of patents from various US and non-Chinese companies. Below is a list of the major third-party patent acquisitions by size for Huawei. It is important to note that acquired patents comprise roughly 3% of Huawei’s US patent portfolio.  Regarding specifically US companies, IBM, Sharp, and top the list of patent sellers to Huawei.

In our 2012 study, we concluded that Huawei’s 1,500 US patents at that time had any average of 1.2 forward citations per patent. We re-analyzed the forward citations, and Huawei’s roughly 11,000 US patents still have a relatively low forward citation count of 2.5 forward citations per patent on average. Compared to companies such as Apple, and Qualcomm which have well over 10 forward citations per patent, the citation data indicates that Huawei’s large US patent portfolio may still comprise primarily incremental improvements over third-party technology, rather than innovative and novel products, services, and hardware.

Given the sheer size of Huawei’s organically grown patent portfolio, the company may not need to rely on acquiring US patents in order to have a freedom-to-operate in the US market. The lack of US patents is one barrier to entry into US technology markets for many overseas companies, however Huawei’s barriers at this time appear related to US governmental policies related to national security and technology protection.

In addition, 32 of Huawei’s patents have been involved in US patent litigation, including against T-Mobile USA, Ericsson, and Samsung Electronics Co. Ltd.

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