With two 5G patents, a company ruthlessly "extorted" Samsung's sky-high patent fees of 142 million US dollars (about 1.03 billion yuan)! It is our Chinese ZTE company that is playing such a slippery game, which was unthinkable in the past!
It all started in January, when a small company called G+Communication sued Samsung for infringing five of its 5G patents. The court of first instance ruled that Samsung had infringed only two of the cases and was required to pay a one-time license fee of $67.5 million. However, G+Communication is not so simple, and it appealed for Samsung to pay a continuing royalty because Samsung is suspected of "long-term misuse" of the two patents.
After several twists and turns, the dust finally settled on this lawsuit a few days ago, and in the ruling, G+Communication had to take away $142 million in sky-high patent fees from Samsung! Splitting it up, one of the "No. 776" patent fees was as high as $61 million, and the other "No. 130" patent fees were as high as $81 million. You read that right, it is a patent that has a price of more than 500 million yuan!
For the average person, this is a staggering number. But for people in the communications industry, it's not a big deal. You must know that the world's major communication giants, such as Qualcomm, Ericsson, and Nokia, have billions of dollars in revenue every year by collecting patent fees, and Qualcomm's patent fee revenue is as high as more than 6 billion US dollars.
Of course, the patent fees they collect are all "reasonable and legitimate", not "extortion" like this one. But this incident reveals two core problems in the industry:
First, in today's 5G era, patents are hard-core assets, and even priceless! Second, telecommunications giants should strengthen their awareness of protecting their own patents to prevent their "coffers" from falling into the hands of others.
When it comes to the first point, it is actually not difficult to understand. 5G has become a global strategic emerging industry, with huge technological and economic benefits behind it. Whoever masters the core patents related to 5G will have the initiative and even affect the entire industrial pattern.
Qualcomm, Ericsson, and Nokia have grabbed countless patent fees along the way with their own 2G/3G/4G patents. In the 5G era, it is the turn of domestic communication giants such as Huawei and ZTE to give it a go and fight for profits on a global scale.
It is not difficult to explain why ZTE's two patents can "extort" Samsung 1 billion yuan. However, as an industry insider, it is not surprising. After all, the FRAND licensing model, which has been implemented for more than 30 years, believes that "reasonable paid use" is the right way, and if it is infringed, it will pay a high price.
But you would never expect that ZTE did not sue Samsung directly, but licensed two patents to a small American company, G+Communication.
Why? First, it can avoid the accusation of "bias against foreign companies", and second, as a U.S. company, it is naturally easier for G+Communication to stand in the shoes of fellow travelers.
ZTE's "airborne lore" can almost be said to be the most clever chess move in the industry. Of course, it also proves ZTE's strength in 5G patent reserves.
But then again, although this trick is clever, it has caused a general doubt in the outside world: is ZTE's move to knock on the door and frantically demand 5G patent fees on a large scale around the world?
If so, manufacturers will be in trouble in the future. However, we still hope that ZTE will not play this kind of "get rich without raising your hands" cleverness, but seriously focus on the development of 5G technology and industry, which is a long-term solution for the industry.
So the second core question is, how will this "monstrous case" trigger the thinking and introspection of the communications industry?
Judging by the results, Samsung is undoubtedly the biggest victim and loser. Not to mention that losing the lawsuit requires an additional sky-high bill of up to 1 billion yuan, what is even more terrifying is that it once again exposes its own weak awareness of patent protection.
As the world's No. 1 mobile phone giant, Samsung has hundreds of billions of yuan in sales revenue every year, but it is almost completely "hollowed out" from the technical level. It can be seen that strong revenue does not mean everything, if the awareness of patent protection is missing, as long as someone is targeting a loophole, there is a danger of breaking the fee at any time.
Not only that, but the field of mobile phones is only "fat". Apple was heavily knocked out of more than $6 billion in patent fees by Qualcomm four years ago because of loopholes in the baseband chip patent.
In today's era, the awareness of patent protection is no longer a self-reserved place, but a necessary awareness of every technology-based enterprise!
Samsung, for example, should clean up its own patent layout in a timely manner, use big data to find out where there may be loopholes, and apply for new patents in time to make up for it. In addition, there should be greater awareness of patent cross-licensing, as well as greater cooperation among industry peers.
In a word, patents are the new highlands of the current manufacturing disputes, and without enough self-protection awareness, it is easy to make yourself the next "Samsung".