China's technology giant Huawei has initiated legal action against Netgear, a Wi-Fi equipment vendor based in San Jose, California. The lawsuits, filed in Germany and China, allege that Netgear has infringed on Huawei's patents related to Wi-Fi technology.
This move signals Huawei's intent to leverage its extensive patent portfolio as a means of generating additional revenue, particularly in light of the ongoing trade restrictions imposed on the company by the United States.
Netgear acknowledged the lawsuits in a recent filing with the Securities and Exchange Commission (SEC) but stated that it was unable to estimate the potential financial impact at this time. The company also expressed confidence that it had not incurred any significant losses and therefore did not establish any loss provisions.
While patent-infringement lawsuits are commonplace in the technology and communications sectors, this dispute between Huawei and Netgear stands out due to Huawei's historically limited focus on patent licensing as a business strategy, in contrast to companies like Nokia and Ericsson.
Huawei, known for its strong patent portfolio, highlighted its leadership in various technology standards fields and the licensing agreements it has entered into with multiple companies globally. With its smartphone and networking businesses facing challenges, Huawei is likely aiming to replicate the revenue streams generated by competitors like Nokia and Ericsson through their patent-licensing businesses. For instance, Ericsson's most recent financial report disclosed $228 million in intellectual property licensing revenues.
As Huawei expands its patent-licensing business, it is increasingly resorting to legal action. The company has filed patent-infringement lawsuits against several international companies, including Stellantis, Xiaomi, Amazon, and Verizon.
The development underscores Huawei's strategic shift and highlights the significance of patent licensing in the technology industry, particularly as the company seeks to navigate the complexities of the global geopolitical landscape.