Huawei moves to protect its patent

* Huawei is a key partner and supplier in South Africa to MTN, Vodacom, Neotel, Telkom and Cell C. * Huawei is the only major China-based equipment vendor to have signed patent cross-licence agreements with its industry peers. This is the key difference between Huawei and ZTE, which only signed licence agreements with Qualcomm. * The reason why ZTE has signed cross-licence agreements with Qualcomm is because it cannot buy chips from Qualcomm without a patent agreement. * The price competitiveness of ZTE comes from its patents infringements. Such infringements impact the long-term viability of the entire industry, eg, the data card market in Europe. * Network operators may face unexpected lawsuits if they buy or sell products from companies like ZTE that infringes IPR. * ZTE has its challenges with IPR payments. Ericsson has been negotiating with ZTE for four years and ZTE is on the whole reluctant to sign an agreement. Recently, Ericsson initiated a similar lawsuit against ZTE. As such, there are considerable intellectual property risks for companies that use ZTE's products.

Huawei's Chief Legal Officer, Dr Song Liuping, said: "Huawei was compelled to initiate this action in order to protect our innovations and registered intellectual property in Europe. Our objective is to stop the illegal use of Huawei's intellectual property and resolve this dispute through negotiation so that our research is used in a lawful manner."

In 2010, Huawei paid US$222 million in patent licensing fees to obtain the legal right to use patents and technologies of other leading companies in the industry. Huawei as well invests a considerable portion of its annual revenue in technology and development. Its R&D expenditure in 2010 alone was RMB16.556 billion.

Leading global provider of commercial telecom networks

Huawei is a leading global provider of commercial telecom networks and it is currently serving 45 of the world's top 50 telecom operators. Through continuous customer-centric technology, Huawei responds quickly to clients' needs with a comprehensive, customised set of offerings. Huawei's products and solutions are deployed in over 140 countries and are supporting the communication needs of one-third of the world's population. As of December 2010, Huawei employed over 110 000 employees, 51 000 of whom are based outside of China. Huawei's international operations have an average localisation rate of 69%.

Huawei is privately held and is 100% owned by its employees. As a progressive organisation, Huawei undertakes management transformation benchmarked against industry best practices. Since 1997, IBM, Hay Group, PricewaterhouseCoopers, Fraunhofer-Gesellschaft and Accenture have served as Huawei's consultants in such areas as corporate management, human resources management, employee shareholding plans, financial management and quality control. In 2010, Huawei recorded unaudited earnings of USD 28 billion, a year-on-year increase of 24%. Huawei's financial results are audited on an annual basis by international accounting firm KPMG.

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