"66%", this is the proportion of revenue that Huawei brought to the latter after the alliance with its enemies.
InterDigital's third-quarter 2016 financial results show that the company's third-quarter revenue has more than doubled, from $100.4 million in 2015 to $208.3 million. The key to the success of InterDigital's performance is that it signed a patent licensing agreement with Huawei in early September, and the two parties entered the cooperation phase from the engagement state. Obviously, with Huawei's strong sales in the global smart phone market, its alliance with InterDigital has brought the “affordable†benefits to the latter.
Then, this pair of disputes for several years, a countless pair of enemies in a lawsuit, why choose words and "aligned"? What are the impacts of the handshakes between the two sides on the mainland domestic mobile phone market and manufacturers?
The enemy fights: You enter a foot, I go in and I don’t want to let each other
The reason why InterDigital is Huawei's "enemy enemy" is because the patent disputes and commercial disputes between the two parties can be traced back to 2011.
Due to unresolved consensus after many negotiations and negotiations, on July 26, 2011, InterDigital was in the US courts in Delaware, Huawei, Huawei, ZTE, ZTE, and ZTE. Initiating a patent infringement lawsuit and requesting the Delaware State Court to initially and permanently prohibit Huawei from continuing to implement its patents and make compensation.
On the same day, InterDigital also sued the US International Trade Commission (ITC) for infringement of its patent rights, and requested ITC to initiate 337 investigations on Huawei and other related products, and issued a comprehensive ban on import orders, suspension and suspension of sales orders. However, in the face of InterDigital's aggressive offensive, Huawei did not show weakness at all.
In December 2011, Huawei filed two lawsuits against InterDigital in Shenzhen, involving standard-essential patent royalty disputes and abuse of market dominance disputes.
Subsequently, the two cases were closed in 2013 after the final review of the two trials. Among them, the standard necessary patent royalty dispute, the Guangdong Higher People's Court ruled that Huawei paid the standard necessary patent license fee to Interdigital at the authorized rate of 0.019%; In the case of Interdigital's abuse of market dominance, Interdigital was sentenced to constitute a monopoly of civil torts, and compensation for Huawei's economic losses was 20 million yuan. At the same time, in May 2014, in view of the settlement between Interdigital and Huawei, the National Development and Reform Commission announced that it had decided to suspend the investigation of Interdigital’s alleged price monopoly.
It is worth mentioning that although the standard necessary patent royalty dispute was initiated by Huawei, it benefited all mainland Chinese mobile phone manufacturers. The settlement of the dispute caused InterDigital's standard-licensed patent licensing rate in mainland China to be reduced. 0.019%. Because the 0.019% rate level is equivalent to InterDigital and Apple's patent licensing cooperation rate, when InterDigitall first throws an olive branch to Huawei, the required licensing rate is 0.01 times N times, which should far exceed 2%.
Of course, the proper settlement of the dispute between the two parties also brought practical benefits to InterDigital. The company was able to get out of the domestic anti-monopoly investigation and avoid the shackles of Qualcomm who had been fined more than 6 billion yuan.
Handshake and talk: jointly seek patent authorization commercialization cooperation path
It can be said that in the past many years, Huawei's relationship with InterDigital can be described as "not tolerant" or "to live and die."
However, this relationship between "swords and arrogance" suddenly eased, and the two companies not only shook hands and said, but also reached an "alliance" relationship.
On September 6, 2016, InterDigital announced: (1) The two companies signed a global, multi-year, non-exclusive patent licensing agreement. (2) Both parties also reached a comprehensive settlement on all arbitration proceedings initiated in December 2013, and Huawei will pay InterDigital a patent license fee. (3) The two companies also “established a preliminary framework agreement on the negotiation of future joint R&D cooperationâ€. (4) Huawei will transfer a batch of patents to InterDigital.
This "one basket" agreement has turned Huawei and InterDigital from "old enemies" into "allies."
As we all know, InterDigital is the pioneer of wireless telephone communication, the world's first wireless network is built by the company. As of December 31, 2011, the company has a patent portfolio of more than 19,500 patents and patent applications related to basic wireless technology through its wholly-owned subsidiaries, covering CDMA, TDD, GSM, FDD, WCDMA, etc. 2/ 3/4 generation wireless communication technology patent.
If Qualcomm is a giant in the field of wireless communication technology, then InterDigital is a giant among the giants, because Qualcomm holds a large number of CDMA patents, which actually originated from InterDigital. At the beginning, InterDigital sold its core standard IS-95 and key patents for CDMA 2nd generation mobile phones to Qualcomm, which was still unknown at the time, because of operational problems.
From the perspective of the cooperation with InterDigital, almost all mobile phone manufacturers including Apple, Samsung, Nokia, RIM and HTC have signed a patent licensing cooperation agreement with InterDigital. It can be said that it is an insurmountable mobile phone manufacturer in the mobile phone market. "A threshold."
So, what is the key or reason that prompted Huawei and InterDigital to become an "alliance" from "the enemy"?
As of December 31, 2010, Huawei has applied for a total of 31,869 Chinese patents, 8,892 PCT international patent applications, and 8,279 overseas patents, and 17,765 patents have been granted, including 3,060 overseas licenses. At the same time, as of the end of 2010, Huawei has joined 123 industry standards organizations around the world, such as 3GPP, IETF, ITU, OMA, NGMN, ETSI, IEEE and 3GPP2, etc., and submitted more than 23,000 proposals to these standards organizations.
Obviously, the two sides have the same strength in patent scale and technology accumulation, which is the key to the final move from "competition" to "coexistence".
Joint R&D: What should the mainland domestic mobile phone manufacturers that have not entered the “friend circle†of the two sides do?
Now, with Huawei reaching a comprehensive settlement with InterDigital, it has ended the disputes between the two parties over the past years, and reached an imaginative space cooperation on "a preliminary framework agreement for the negotiation of future joint R&D cooperation" and "Huawei will transfer a batch of patents to InterDigital". .
The US Patent and Trademark Office (USPTO) transfer data shows that in a transaction that occurred on September 15, 2016 and recorded on October 19, Huawei transferred four granted patents to InterDigital's subsidiary Vid Scale, Inc. These patents are all related to online video processing technology. Obviously, the two sides have reached a comprehensive cooperation. On the one hand, this shows that a major obstacle to Huawei’s entry into the US market has been eliminated. On the other hand, Huawei has transferred the patent to InterDigital, and through InterDigital’s most extensive patent licensing cooperation network or channel, Its own patented technology achieves the goal of commercial realization.
Obviously, the capital market reacted strongly to the cooperation reached between the two sides.
After the announcement of the cooperation between the two parties, InterDigital's share price continued to rise. On September 8, InterDigital's share price reached US$73.88 per share, the highest since 2011.
At the same time, InterDigital's third quarter 2016 financial results also reflected the "outcomes" of the cooperation between the two parties.
On the one hand, the company's third-quarter revenue has more than doubled in the third quarter, from $100.4 million in 2015 to $208.3 million today. On the other hand, the company’s past royalties collected in the third quarter rose sharply, from $102.2 million last year to $124 million this year.
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