Respecting and Protecting Intellectual Property:
The Foundation of Innovation
Huawei White Paper on Innovation and Intellectual Property

June 27, 2019

Contents
Executive Summary ................................................................................................................. 01

01 Sustained Innovation Is the Foundation of Huawei's
Ongoing Success .............................................................................................................. 04
1.1 R&D Investment Is a Marathon, Not a Sprint ..................................................... 04
1.2 Sustained Innovation that Serves Customer Needs .......................................... 06
1.2.1 Distributed Base Station: A Benchmark for Mobile Base Station
Architecture Born in the 3G Era .................................................................................................. 06
1.2.2 SingleRAN Marks a New Era in Mobile Network Architecture ....................................... 07
1.2.3 USD2 Billion Investment in 5G over 10 Years Makes Huawei a Global Leader ...... 08

1.3 Valuing Investment in Basic Research .................................................................... 10
1.4 Commitment to Open Innovation ........................................................................... 15

02 Years of Investment Translates into an Innovative Brand
and a Wealth of Patents .......................................................................................... 17
2.1 Winning Multiple Innovation Awards from Authoritative Third Parties .... 17

2.2 Sustained Investment and Innovation Makes Huawei One of
the World's Largest Patent Holders ........................................................................ 18

03 Huawei's Innovation Brings Huge Social Value ......................................... 20
3.1 Creating Value for Customers and Consumers and Promoting
Sustainable Social Development .............................................................................. 20
3.2 Contributing to Standards Organizations and Open Source
Communities to Drive the Industry Forward ....................................................... 22
3.3 Huawei's R&D Strengths Bring Value to Industry Partners and Investors...... 24

04 Huawei Respects Third Parties' IP and Protects Its Own ............... 25
4.1 Ensuring and Managing IP Compliance Through Organizations,
Policies, and Processes.................................................................................................. 25
4.2 Implementing Others' IP and Sharing Our Own ThroughLicensing or Cross-licensing ........................................................................................ 27
4.3 Contributing to the Ongoing Reﬁnement of IP Laws and Industry
Policies with Our Own Practice ................................................................................. 29

Conclusion ...................................................................................................................31

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Respecting and Protecting Intellectual Property: The Foundation of Innovation
Huawei White Paper on Innovation and Intellectual Property

Executive Summary
Over the past 30 years, Huawei has focused on information andcommunications technologies and brought advanced and convenient
network connections to more than 3 billion people around the world.
We do everything we can to support secure and stable network
operations in every place where we operate, including some of theworld's harshest environments like the Arctic Circle, Mount Everest,
the Sahara, the rainforests of South America, and in areas struck by
disasters like earthquakes, tsunamis, plagues, and wars. Our vision
is to bring digital to every person, home and organization for a fully
connected, intelligent world.
To realize this vision, Huawei highly values innovation and research
into technology. Every year, we invest at least 10% of our revenue in
R&D. In 2018 alone, Huawei invested more than CNY100 billion in
R&D, nearly 15% of our annual revenue. That put us fifth in the worldin terms of R&D expenditure, according to the EU's 2018 Industrial
R&D Investment Scoreboard. Our sustained investment has resulted
in innovative products and efficient services for our customers.
Over the last 20 years, Huawei has invested heavily in R&D. As aresult, we became one of the major 4G patent holders in the ICT
sector, and we have cemented our leading position in 5G. We believethat respecting and protecting intellectual property ("IP") is thefoundation of innovation. We share our own IP with other companies
through licensing and cross-licensing to promote the industrializationof innovations. We also publish papers on the achievements ofour research. Every year, we submit a large number of technicalcontributions to international standards organizations and open
source code to open source communities, driving the industry forward.

Respecting and Protecting Intellectual Property: The Foundation of Innovation
Huawei White Paper on Innovation and Intellectual Property

This White Paper describes Huawei's practices in and contributions
to innovation and the protection of IP. Key information is summarized
as follows:＞

Huawei makes sustained investment in R&D and open innovation
based on the needs of our customers. Valuing and investing inbasic research is the key to Huawei's ongoing success.

＞Sustained investment has made Huawei one of the biggest
patent holders in the world. As of the end of 2018, Huawei has
been granted 87,805 patents, of which 11,152 are US patents.

＞

At present, Huawei publishes 100 to 200 academic papers
every year. We have submitted more than 60,000 technicalcontributions to international standards organizations. We arealso a major contributor to open source communities.

＞

Huawei's innovation brings enormous benefits to our customers,
consumers, industry partners, and investors.

＞

Huawei respects third parties' IP and trade secrets. We havedeveloped comprehensive systems of IP management andcompliance, and make every effort to ensure that all employees
abide by them.

＞

Huawei has entered into more than 100 patent license
agreements (including unilateral license and cross license)
through a process of amicable negotiations with many ofthe major global ICT companies, including Nokia, Ericsson,
Qualcomm, Nortel, Siemens, Alcatel, BT, NTT DOCOMO, AT&T,
Apple, and Samsung.

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Huawei White Paper on Innovation and Intellectual Property＞

Huawei has executed more than 10 outbound license
agreements through amicable negotiations, pursuant to which
we have received over USD1.4 billion licensing revenue froma wide range of companies in the US, Europe, and Asia since
2015.

＞

Huawei respects international rules of legally implementing
third parties' IP through cross licensing or by paying licensing
fees and royalties to third party IP holders. Over the past two
decades, we have accumulatively paid more than USD6 billion
for implementing third parties' IP.

＞

Huawei promotes legislative reform by providing its suggestions
on and inputs to IP protection legislation and its amendment,
as well as policy-making in major jurisdictions worldwide
based upon its global view and successful legal experience. We
are committed to contributing to a better environment for IP
protection.

Respecting and Protecting Intellectual Property: The Foundation of Innovation
Huawei White Paper on Innovation and Intellectual Property

01

Sustained Innovation Is the Foundationof Huawei's Ongoing SuccessCustomer-centric and sustained R&D and innovation is thefoundation of Huawei's survival and growth. Huawei has grownsteadily for more than 30 years. In that time, it has become a world
leader in many aspects of technology and in many of its solutions.
This is the result of Huawei's sustained strategic investment for
strategic breakthroughs.

1.1 R&D Investment Is a Marathon, Nota Sprint
In 2018, Huawei was No. 72 on the Fortune Global 500 list. When acompany grows from a small private firm to a place in the Fortune
500 in just 30 years, there are clearly many factors behind its
success. But one of the key factors is an ongoing commitment toinvestment in R&D.
Huawei highly values innovation and research into technology. Every
year, we invest at least 10% of our revenue into R&D, and in recent
years it has been closer to 15%. In 2018, Huawei invested over
CNY100 billion in R&D. That put us fifth in the world in terms of R&D
expenditure, according to the EU's 2018 Industrial R&D Investment
Scoreboard. Over the last 10 years, our R&D investment adds up to
more than CNY480 billion (equivalent to USD73 billion). R&D is nota sprint; it's a marathon. Once you've started, you just have to keep
running. That's why, in the next few years, Huawei will be increasing
our R&D investment progressively to between USD15 billion and
USD20 billion per year. As a result of this investment, the number of45

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patents Huawei applies for and is granted keeps growing every year.
Table 1. Huawei's R&D investment and number of granted patents
16000

20

12000

15

8000

10

4000

5
0

0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

R&D investment ((in billion USD)

Number of newly granted patents

Sustained investment has brought rich rewards. It has resulted ininnovative products and efficient services for our customers. Today
our services reach over 3 billion people in more than 170 countries
and regions.

Respecting and Protecting Intellectual Property: The Foundation of Innovation
Huawei White Paper on Innovation and Intellectual Property

1.2 Sustained Innovation that Serves
Customer Needs
Huawei is committed to customer-centric innovation that serves
customer needs. We deliver innovative products and solutions that
help our customers to be more profitable, and create value for ourcustomers on an ongoing basis.

1.2.1 Distributed Base Station: A Benchmark for Mobile
Base Station Architecture Born in the 3G Era
Huawei's distributed base station was developed to meet the needsof our customers. Our innovation solved a problem faced by telecom
operators around the world, and significantly reduced both theircapital expenditure (CAPEX) and operational expenditure (OPEX).
In 2002 when 3G rollout started, Huawei began to develop themobile network market in Europe. European mobile operators at thetime were facing significant challenges from the high price of siteacquisition. In a standard base station, the radio frequency unit andthe baseband processing unit were in the same cabinet. The basestation was a bulky piece of equipment and a major electricity user,
and it was heavy and difficult to install. European nations were keen
to maintain their living environments, and permission had to beobtained for every new base station and high prices had to be paid forthe space. In an analysis of the total cost of ownership (TCO) of one of
our customers at the time, the equipment represented only 15% of
total costs while site acquisition represented 43%.
For example, simply the rent for a place for an outdoor base station
could cost up to EUR7,000 per year. This meant a TCO of EUR70,000
over 10 years. For an average network of perhaps 3,000 sites, leasingsites at that rate would require EUR210 million over 10 years.

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After months of site survey and research, Huawei proposed a new,
distributed architecture. The BBU would remain in the existing
equipment cabinets owned by the operators, but the RRU could bemade out of waterproof material, and positioned on poles. This meantthat the base station could be slimmed down into two separate small
units, the baseband unit (BBU) and the remote radio unit (RRU).
Customers would no longer need the space for large equipment racks,
their power costs would fall, and the equipment would be mucheasier to transport to the site and install. It was a massive saving in
network construction costs.
In 2005, our innovative distributed base station with separate BBU
and RRU was deployed for the very first time by Telfort, a telecom
operator in the Netherlands. When Huawei had completed theinstallation, Telfort calculated the actual reduction in their OPEX, andfound that the savings were even greater than Huawei had originallyprojected. The Huawei distributed base station solved the problemsof high CAPEX and OPEX for European operators, and it changed
the way our customers perceived us. Since then, the distributed
base station has become the mainstream architecture of the next
generation of mobile base stations.

1.2.2 SingleRAN Marks a New Era in Mobile Network
Architecture
By 2007, 3G technology was in widespread use, and 4G wasapproaching readiness. But maintaining multiple networks for 2G,
3G, and 4G inevitably drove up operators' costs, both CAPEX and
OPEX. Operators needed a new way to manage network evolution andreduce the construction and operating costs of their networks.
To rescue this situation, Huawei introduced SingleRAN. This solution
was described by a technical expert at Vodafone as "a very sexytechnology." It enabled three different radio access technologies

Respecting and Protecting Intellectual Property: The Foundation of Innovation
Huawei White Paper on Innovation and Intellectual Property(RATs) – 2G, 3G, and 4G – to be processed within the same equipment
rack, so that operators could finally combine and evolve their
networks without increasing the bulk of their equipment. At a stroke,
it cut operator costs by up to 50%. It was a massive hit in the industry,and our competitors were unable to replicate its success for a longtime. The reason was that this product relied on extremely complex
algorithms.
The key in the SingleRAN solution was the GSM multi-carrier
technology. This was widely recognized in the industry as being a
key technical bottleneck, and for many years, no one had been able
to solve it. "The chances of success are just 1%!" was the generalconsensus based on the information available. This means thatturning this technology into commercially viable products was
virtually impossible.
But we saw that 1% as a challenge, not a barrier. The Huawei wirelesstechnology team and the algorithm research team headed into
unknown waters, and achieved a major breakthrough. In July 2007,
the teams finally cracked the GSM multi-carrier technology, making
SingleRAN – a technology believed to be a disruptive innovation – areality.
In 2008, Huawei installed the first SingleRAN network in the world for
O2 – a subsidiary of Telefónica – in Germany, enabling them to handle
both GSM and UMTS on a single network. SingleRAN was quickly
embraced by customers worldwide and widely applied in the 4G era.
It soon became the new de facto standard for global mobile networkarchitecture.

1.2.3 USD2 Billion Investment in 5G over 10 Years Makes
Huawei a Global Leader
3G and 4G gave birth to the mobile Internet, which has profoundly89

Respecting and Protecting Intellectual Property: The Foundation of Innovation
Huawei White Paper on Innovation and Intellectual Propertychanged the way we live. With 5G, the focus would not only be onconnections between people; it would also extend the network toconnected things. 5G would provide fiber-like connection speeds. It
would offer almost zero latency, massive connectivity, and super-large
capacity. 5G will provide the foundation for new applications in every
industry, and will bring us into a digital and fully connected world.
In 2009, Huawei invested USD600 million to begin the research into
5G technology. In 2016, we invested an additional USD1.4 billion in
speeding up the end-to-end development process of 5G products
for commercial use. By this time, Huawei had spent USD2 billion on
researching and developing 5G. This is more than the total spendingon 5G by major equipment vendors in the US and Europe put together.
5G requires the use of much higher-frequency bands than 3G and 4G,
but high-frequency signals have a shorter range. That means more basestations are needed for 5G networks. Our customers were struggling toincrease coverage and cut network construction costs. Huawei worked
with industry partners to develop a solution that decoupled the 5G
uplink and downlink. Uplink and downlink signals have always traveledon the same band, but this limitation was now making networks harder
to build. If the downlink can exploit the high-capacity high bands, whileleaving the uplink to existing lower-frequency wavebands, this enables
much better coverage and boosts speeds at the edge of a cell. For
our customers, this means initial deployment of 5G networks will not
involve many additional base stations, greatly shortening their network
construction cycles. At the MWC Barcelona 2019, this solution wasawarded the "Best Mobile Technology Breakthrough" by GSMA, one of
the industry's highest honors.
Huawei offers the best-performance 5G solutions and simplified site
solution. We also leverage our leading technologies in multiple fields
to provide many unique value points that no other vendor can match.

Respecting and Protecting Intellectual Property: The Foundation of Innovation
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For example, Huawei's proprietary technologies have enabled us toincrease the capacity of microwave transmission from 1 Gbit/s to
20 Gbit/s. This means 5G base stations no longer necessarily haveto have a fiber connection. The ultra-broadband backhaul they needcan be supplied by microwave, which means that 5G can be deployed
more easily.
Huawei continues to lead the industry in developing 5G. As of midJune of 2019, Huawei signed 50 commercial contracts for 5G withleading operators around the world, and shipped over 140,000 5G
base stations.

1.3 Valuing Investment in Basic Research
When society progresses, it walks on roads paved by science.
Every industrial revolution is the result of major inventions andtechnological breakthroughs in basic research. Basic research andeducation is the foundation for creating and revitalizing industry.
In the ICT industry, we are closing in on the Shannon limit and pushingagainst the confines of Moore's law. There are no theories that
describe how to handle the huge data flows and achieve close-tozero network latency. We have entered uncharted territory, and havebeen increasing investment in exploring cutting-edge technologies
and basic research for the future.
In 2011, Huawei consolidated its global R&D resources andestablished the 2012 Laboratories, the department which will leadour innovation, research, and platform development efforts. Its job
is to build our technical and R&D competence for the future. 2012
Labs is where Huawei converts sustained investment in cutting-edge
research into our competitive advantages. 2012 Labs carries out midto long-term research into network architecture, standards, materials

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science, and cutting-edge technologies in ICT. It is not governed byshort-term profit targets. It works on a 5- to 10-year timespan.
Many research institutes have been established within the 2012
Labs, including the Wireless Technology Lab, the B&P Lab, the Noah's
Ark Lab, and the Network Technology Lab, each dedicated to the basic
research in a particular domain.
The Wireless Technology Lab explores new technologies for wirelesscommunications. It is responsible for Huawei's future wirelesstechnologies, and for building our competitiveness in wireless accesstechnologies in a fully connected world. This includes making more
efficient use of the wireless spectrum, exploring new advances inphysical-layer technologies, finding and proving new degrees of
freedom, and pushing the communications capacity of the channelever closer to the Shannon limit. The Lab explores the evolution of
wireless technologies, measured by access speed, energy efficiency,
spectrum efficiency, end-to-end latency, accurate positioning, highspeed mobility, and ground/air coverage. This Lab produced the
Huawei 5G and Wi-Fi technologies that are now recognized as theindustry's leading solutions.
The B&P Lab researches optical communications technologies. It iscommitted to creating easy-to-maintain information infrastructurewith high bandwidth, low latency, and low energy consumptionthat will support the vast flows of data that a fully connected andintelligent world will generate. Over the last decade, this Lab has
doubled the volume of data that a single fiber can transmit every
three years. It has sparked a technological revolution in the coreswitching nodes of optical networks. And Huawei continues tolead the world in the evolution of optical network technologies: In
2018, Huawei introduced the industry's first ultra-large-capacity

Respecting and Protecting Intellectual Property: The Foundation of Innovation
Huawei White Paper on Innovation and Intellectual Property

all-optical cross-connect architecture, which enables networks tocarry 10 times as much data as with the traditional electric crossconnect architecture. The all-optical cross-connect architecture
also uses 10 times less energy, meaning a 100-fold improvement inoverall energy efficiency. The B&P Lab has been researching opticalcommunications since its inception in 2012, and is able to deliver allof the core technologies required for fiber networks: long-distance,
ultra-broadband optical links; the ultra-large-capacity optical crossconnect; and highly integrated and energy-efficient silicon photonics.
The Noah's Ark Lab is the artificial intelligence research center
within the 2012 Labs. It is organized as six labs focusing on different
aspects of AI: computer vision, natural language processing, searchand recommendations, decision-making and inference, humancomputer interaction, and AI theory. Artificial intelligence is the "ark"in which Huawei will escape being submerged in the flood of datathat a connected society will generate. AI will be a general-purpose
technology, which will change every industry and completely redefine
the information industry. The Noah's Ark Lab will play a vital role inrealizing Huawei's vision of a fully connected and intelligent world. It is
one of Huawei's most important research units, and is helping Huawei
itself adapt to the AI era.
The Network Technology Lab focuses on data communications. It
explores areas such as ultra-broadband, low latency, lossless networks,
and new IP. The all-optical connected router that the Lab developed
replaces the electric connected router and can easily scale out. The
ultra-low-latency X-Ethernet technology enables forwarding latency tobe held consistently in the hundreds of nanoseconds range, and is oneof the key breakthroughs on which 5G core bearer networks will rely.
Lossless cloud networks enable zero packet loss, zero throughput loss,
and zero latency loss. They combine the computing networks, storage

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networks, and application networks within a data center into one, andoffer unlimited scalability. Deterministic IP enables an IP network tokeep network latency within a range of 10 μs no matter how large the
network is or how widely separated the nodes are. And in holographic
networks, an immersive hologram will require 50,000 times the data
rate of a 4K high-definition video. New IP is the technology that will
enable lossless, real-time transmission of holograms around theworld.
Over the last few years, Huawei has made huge strides insmartphones. This impressive progress is the result of our emphasison basic research and intensive investment in R&D. Huawei has
been researching telecommunications technology for 30 years, andwe have research centers in many parts of the world: an aesthetics
research center in France, a materials research center in Japan,
an algorithm research center in Russia, an engineering research
center in Sweden, a process research center in the US, and a heatdissipation research center in Ukraine.
Huawei began to operate in the mobile phone market in 2003. Overthe past decade and a half, we have developed world-beating teams
and processes in every aspect of phone development, from chips,
software, and materials to design, processes, and heat dissipation.
Today, our phones lead the market in terms of communications
performance, photography, battery life, EMUI operating system,and phone design. They offer global users a premium smartphone
experience.
Every year, Huawei invests huge sums in research. We have over 700
mathematicians, 800 physicists, 120 chemists, and a total of 15,000
researchers engaged in basic research. Their role is to turn money
into new knowledge. We invest between USD3 billion to USD5 billion
in this process every year. Based upon their discoveries, Huawei has

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a team of over 60,000 product development engineers. They turnknowledge into commercial products, and back into money.
Basic research is like building Rome: It can't be done in a day. It takes
decades or even 100 years to turn a basic theory into a large industry.
But if we remain fixated on quick profits and short-term returnon investment, then the basic research will simply never happen.
A company needs strategic patience if it is to succeed in basic
research. Some ideas must be incubated for a decade or more before
they bear fruit.

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1.4 Commitment to Open Innovation
Huawei pursues open innovation. We do not innovate on our own.
Instead, we make full use of innovative resources from aroundthe world to conduct joint research. We help scientists become
lighthouses that guide Huawei and also the world forward.
Huawei works with more than 300 universities and 900 research
institutes around the world on 7,840 projects. We have invested
USD1.8 billion in these projects, signing more than 1,000 R&D
cooperation contracts in which we pay third parties. In the future, wewill invest USD300 million in these partnerships every year. With thisinvestment, we will pay universities and research institutes for theirresearch – purchasing the results of their research or paying for theuse of these results.
Our collaborations take the following forms:＞

Providing funding to universities and scientists that are strong incertain technical domains to make breakthroughs in basic theories.

＞

Establishing joint labs with business partners and research
institutes to conduct joint research on cutting-edge technologies
and share the results of that research.

5G polar codes are a case in point of this open innovation. In 2008,
Professor Erdal Arikan published a paper on polar codes, offeringa new option for channel coding. It is also the world's first channel
coding technology that has been proved to reach the Shannon
limit. Huawei realized the potential of polar codes in increasing theperformance of channel coding. We then conducted further researchbuilding on Professor Arikan's work. After years of effort, we mademany technological breakthroughs and removed key technicalbarriers in engineering. We managed to bring polar codes out of theRespecting and Protecting Intellectual Property: The Foundation of Innovation
Huawei White Paper on Innovation and Intellectual Property

lab and turn them into industrial applications.
Huawei's Wireless X Labs focus on five major areas of research:connected drones, connected vehicles, cloud virtual reality andaugmented reality, wireless eHealth, and wireless robotics. The aimof the Labs is to build an ecosystem for 5G applications. We workwith regulators, application solution providers, telecom operators,
and application users to explore future use cases and take concrete
actions to drive growth. More than 270 industry partners have joined
us to work together on more than 50 global innovation projects.
Huawei has established 36 joint innovation centers with more than
20 customers and partners around the world. We work with thesepartners to incubate new products and solutions and explore new
business models. Our goal is to lead the industry forward and achieve
shared success.
Huawei has invested over USD1 billion in the Developer Enablement
Program, where we aim to help developers grow their ecosystembuilding capabilities on the Huawei Cloud platform. We launched the
Huawei Cloud Academy to offer training, certification, development,
and support services to developers. We also accelerate talentdevelopment and product launches, and give developers accessto Huawei's global market, by providing commercial support suchas physical goods, funds, cloud service resources, and enterpriseconnections.
In 2018, the number of registered developers worldwide reachednearly 300,000, 150% more than the previous year. We also had
around 600 new certified joint solutions, and over 1,700 new
developers in 2018.

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02

Years of Investment Translates into an
Innovative Brand and a Wealth of Patents
2.1 Winning Multiple Innovation Awards
from Authoritative Third Parties
Over the past few years, Huawei has won multiple innovation
awards. This shows that Huawei's innovation capacity is widely andcontinuously recognized by international media and the industry's
authoritative bodies.
＞

In 2009, Huawei was selected as one of the top five mostinnovative companies by the US's Fast Company magazine.

＞

In 2010, Huawei was awarded the 2010 Corporate Use of
Innovation Award by The Economist.

＞

In 2014 and 2016, Huawei was selected as one of the Top 100
Global Innovators by Clarivate Analytics and Thomson Reuters,
respectively.

＞

In 2018, GSMA presented Huawei with the Award for Outstanding
Contribution to the Mobile Industry, in recognition of Huawei'scontributions to the mobile industry.

＞

In 2019, Huawei's innovative uplink/downlink decoupling solution
for 5G RAN deployment won GSMA's Best Mobile Technology
Breakthrough award. This award is a weighty award establishedby the GSMA to recognize technological innovation that hasbrought about a significant improvement in user experience, andis recognized as one of the highest honors in the communicationsindustry.

Respecting and Protecting Intellectual Property: The Foundation of Innovation
Huawei White Paper on Innovation and Intellectual Property

2.2 Sustained Investment and Innovation
Makes Huawei One of the World's
Largest Patent Holders
As of the end of 2018, Huawei held 87,805 patents, of which 11,152
were granted in the US and over 6,600 patent families were granted inEurope. The patent prosecution process is also a process of disclosing
technical details, through which we contribute our R&D achievements
to industry and society. Huawei's patents are of profound value to theglobal information society.
Huawei ranks among the top in major countries and regions including
China, the US, and Europe by the numbers of patent applications
filed and numbers of patents granted. In 2018, Huawei ranked 16th
by the numbers of granted patents in the US, and ranked 2nd by the
numbers of patents granted by the European Patent Office. Huawei
is also the world's largest patent holder in China. Below are thenumbers of Huawei's granted patents in China, the US, and Europe
between 2010 and 2018.
Table 2. Patents granted to Huawei in China, the US, andEurope between 2010 and 2018
4000

3000

2000

1000

0
2010

2011

2012
China

2013

2014
US

2015

2016
Europe

2017

2018

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Huawei is one of the largest PCT patent applicants in the world.
In 2018, Huawei submitted 5,405 PCT patent filings to the United
Nations' World Intellectual Property Organization (WIPO). Francis
Gurry, WIPO's Director General, said, "It's an all-time record byanyone."According to a well-known institution's statistics on patents for LTE
standards, Huawei holds more than 10% of 4G standard-essential
patents. According to ETSI's latest statistics about 5G standardessential patents, Huawei holds 20% of the world's total. These
patents are essential to mobile phones and network operators
worldwide.

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03

Huawei's Innovation Brings Huge
Social Value
Huawei's innovation capacity and innovative products are widely
recognized across the industry. Huawei also actively contributes its
innovation to industry and society.

3.1 Creating Value for Customers andConsumers and Promoting
Sustainable Social Development
Huawei is committed to bringing digital to every person, home andorganization for a fully connected, intelligent world. From the remote
Siberian wilderness to Africa's Kilimanjaro; from Mount Everest to
the minus 40° C conditions of the North Pole; and from remote andepidemic-stricken African regions to world business centers like
Paris, London, and Tokyo – Huawei connects them all, allowing people
to enjoy communications services like web surfing, social networking,and video calls on their phones anytime, anywhere.
We help customers become more proﬁtable and create value for them.
Together with our partners, we provide innovative and secure network
equipment to telecom operators. We provide our industry customers
with open, flexible, and secure ICT infrastructure products. In
addition, we provide customers with stable, secure, and trustworthy
cloud services that evolve with their needs. As of the end of 2018,
more than 500 operators worldwide and 211 of the Fortune Global
500 companies – including 48 of the top 100 – have selected Huawei
as their partner in digital transformation.

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We advance technology for every person, home, and organization
to bridge the digital divide.
According to the ITU and GSMA, 66.3% of the world's households
remain unconnected, and half of the world's population has no
Internet access. On top of this, more than two billion people aroundthe world lack reliable mobile broadband services, and a significant
number of them live in urban areas.
Huawei is committed to bridging the digital divide across the globe.
Through continuous innovation, we are making technology simpler,
more convenient, and more affordable, giving more people access tothe benefits of digital and intelligent technology and creating newworlds of opportunity.
Our RuralStar solution has been deployed with over 40 operators
in more than 20 countries and regions, including Thailand, Ghana,Indonesia, Nigeria, South Africa, and China. With RuralStar, millions
of previously unconnected people are now able to access mobile
networks for the first time.
In 2018, the RuralStar solution and two other Huawei's solutions– WTTx and PoleStar – respectively won the GSMA's Best Mobile
Innovation for Emerging Markets award, the ITU's Global Corporate
Award for Sustainable Development, and the GSMA's Outstanding
Mobile Contribution to the UN SDGs in Asia award.

Respecting and Protecting Intellectual Property: The Foundation of Innovation
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3.2 Contributing to Standards Organizations
and Open Source Communities to Drive
the Industry Forward
Huawei actively contributes to standards organizations, industry
alliances, and open source communities. Huawei is an active memberof more than 400 standards organizations, industry alliances,and open source communities, where we hold more than 400 key
positions. Huawei is a significant contributor to major standards
organizations and open source communities in the ICT industry. At
present, we publish 100 to 200 academic papers every year. Our open
source code and a large number of our standards contributions areused across the industry. Such sharing of technologies between
industry players drives the industry forward.
Contributions to standards organizations＞

Huawei is an active member of more than 140 standards
organizations, where we hold more than 250 key positions. We area member of the board or executive committee in organizations
like the 3GPP, ITU, CCSA, ETSI, IEEE, WFA, and WWRF.

＞

Huawei has submitted core contributions to 5G by working
together with key stakeholders across the industry to complete
the first version of 3GPP 5G standards, paving the way for thecommercial use of 5G. We submitted approximately 17% of
the total number of approved 4G LTE standards contributions
worldwide, making us the second largest contributor. Our
approved 5G contributions accounted for 21% of the total
number of approved 5G standards contributions, making us thelargest contributor in the world.

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In 2018, Huawei submitted more than 5,000 standards
contributions, bringing the company's total number of standards
contributions to nearly 60,000.

Contributions to open source communities
Since 2012, we have joined open source communities, actively
contributing to mainstream open source foundations and communities.
Huawei is one of the top three contributors to mainstream open source
communities, such as those for cloud services.
＞

We hold more than 10 different seats on the board for majorinternational open source foundations and communities like theLinux Foundation, Apache, CNCF, OpenStack, OCI, ONAP, OPNFV,
Akraino, Acumos AI, Hadoop, and Linaro, and serve in more than
200 Technical Steering Committee, Project Team Lead, and Core
Committer roles.

＞

Huawei has led many projects, including ServiceComb, which
was the first microservice project to graduate from Apache;
Cyborg, which has quickly grown into a de facto standard foracceleration device management; CarbonData, which has
gradually become one of the standard data formats for big data;
and the OpenLab project, which achieves interoperability andpre-integration for cross-community projects, accelerating
commercialization of open source. We introduced new features
to the FD.io ecosystem including the DMM open source protocol
stack framework. As a creative solution, the DMM makes it
possible to use diverse protocol stacks for different applications.
Huawei also built the Cross-domain, Cross-layer VPN (CCVPN)
use case in collaboration with China Mobile and Vodafone in the
ONAP community, which won the GNTC Innovation Award.

Respecting and Protecting Intellectual Property: The Foundation of Innovation
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3.3 Huawei's R&D Strengths Bring Valueto Industry Partners and Investors
Huawei's R&D strengths and the value of its IP have been recognized
by industry players in many previous collaborative projects, joint
venture partnerships, and mergers and acquisitions. Huawei's R&D
team and its associated capacity for innovation are key factors whena company decides to acquire Huawei's business. The following aresome examples:＞

In 2000, Huawei became an original equipment manufacturerof Motorola. Huawei received customer requirements from
Motorola and then went on to develop suitable products andprovide technical support. During the following 10 years,
Motorola purchased cutting-edge core network and wirelessaccess products and technologies worth of USD880 million from
Huawei.

＞

In 2001, Huawei sold Avansys Power – a subsidiary thatspecialized in communications power supplies – including
related technologies and IP, to Emerson for USD750 million.

＞

In 2003, Huawei and 3Com set up a joint venture named H3C, inwhich 3Com made investment in cash while Huawei provided
enterprise network technologies and human resources. In 2006,
3Com acquired Huawei's 49% share in H3C for USD882 million.

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04

Huawei Respects Third Parties' IP andProtects Its Own
Huawei believes that protecting IP is the foundation of innovation, andhas systems and processes in place to ensure that our employees
respect third parties' IP. Huawei legitimately implements third parties'
IP or shares its own IP with other third parties through cross-licensing
or by paying licensing fees to third-party IP holders in accordance withinternational rules and national laws. In doing so, we share value withother industry players for joint success while seeking our own growth.
We also contribute to the improvement of the IP laws and industry
policies in countries where we operate.

4.1 Ensuring and Managing IP
Compliance Through Organizations,
Policies, and Processes
As Huawei is under spotlight, we set higher standards for thecompany as well as our employees when it comes to the protectionof IP and trade secrets, and have systematic management systems inplace. In addition, Huawei has compliance management teams acrossall our business and functional departments. Huawei's Chief Legal
Officer also serves as the Chief Compliance Officer and assumes full
responsibility for the legal and regulatory compliance of Huawei's
business operations.
＞

The legal affairs department works closely with complianceteams in all our business and functional departments, withclearly defined responsibilities. This ensures that the company'sRespecting and Protecting Intellectual Property: The Foundation of Innovation
Huawei White Paper on Innovation and Intellectual Property

business activities, especially R&D activities that involve others'
IP, are conducted in a lawful and contractual manner. Our key
business processes such as Integrated Product Development
and Integrated Supply Chain are regularly checked to update
the key control points. We also make ongoing management
improvements by correcting identified issues and learning
lessons from everyday operations.
＞

Since its inception, Huawei has issued many regulations toprotect third-party IP, including the Regulations on Respecting

Third-party IP and Other Legitimate Rights , Huawei BusinessConduct Guidelines , Regulations on Respecting and Protecting
Third-party Trade Secrets , Regulations on Managing Third-party
Software , Rules on Management of Using Open Source Softwareand Making Software Source Code Available to the Public , andRegulations on Huawei Trademarks . These regulations place
clear and detailed requirements for strictly protecting third
parties' confidential information, commercial software, patents,
trademarks as well as other forms of IP in our business activities.
＞

All recruitment candidates are required to sign an IP and trade
secret protection commitment letter during their interview andon-boarding. The purpose of this is to ensure that the individuals
clearly understand that Huawei respects the confidential
information of other companies and individuals. Huawei's
employment agreement provides that employees shall notdisclose to Huawei or use for work purposes any third party's
technical secrets, trade secrets, or other IP, nor hold any thirdparty's confidential information in Huawei offices, on a work
computer. After on-boarding, employees are required to take IP
compliance courses.

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The company requires its employees to review the Huawei
Business Conduct Guidelines (BCGs) and sign a BCG commitment
letter every year. We organize self-checks and self-corrections
and discipline any individual who violates the BCG to ensure thatall policies are enforced.

4.2 Implementing Others' IP and Sharing
Our Own Through Licensing or
Cross-licensing＞

Huawei actively participates in the discussions and amendmentof IP policies for major industry standards organizations,
including ETSI, ITU, IEEE and CCSA. We advocate the full respectof IP and completely oppose abusive usage of IP. We expect the
IP policies formulated by major standards organizations to be
conducive to the healthy development of the industry as a whole.

＞

It is common business practice in the telecommunicationsindustry for patented technologies to be legitimately shared or
implemented through cross-licensing or the payment of licensing
fees on fair, reasonable and non-discriminatory ("FRAND")terms. Huawei makes every effort to fulfill its FRAND obligations.
Since 2001, Huawei has signed over 100 patent license (or crosslicense) agreements with major industry patent holders andcompanies such as Nokia, Ericsson, Qualcomm, Nortel, Siemens,
Alcatel, BT, NTT DOCOMO, AT&T, Apple, and Samsung.

＞Huawei pays royalties to legally implement third parties'
patented technologies. Since its first patent license agreement
signed in 2001, Huawei has paid over USD6 billion in royalties,
with nearly 80% of that amount paid to US companies.

Respecting and Protecting Intellectual Property: The Foundation of Innovation
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Just as Huawei legally implements third parties' technologies
through licensing or cross-licensing, we also actively share ourown IP with our industry partners. We have executed more than
10 outbound license agreements through amicable negotiations,pursuant to which we have received over USD1.4 billion licensing
revenue from a wide range of companies in the US, Europe, andAsia since 2015.

＞

Huawei intensifies its communications and collaboration withindustry partners by actively participating in patent alliances andpatent pools. In 2013, Huawei bid together with other companies
to successfully purchase a digital imaging patent portfolio
for USD525 million, reducing potential patent litigations anddisputes in the industry.

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4.3 Contributing to the OngoingReﬁnement of IP Laws and Industry
Policies with Our Own Practice
Huawei promotes legislative reform by providing its suggestions on
and inputs to IP protection legislation and its amendment, as wellas policy-making in major jurisdictions worldwide based upon its
global view and successful legal experience. We are committed tocontributing to a better environment for IP protection.
＞

Huawei actively contributes to the legislative processes for IP
protection within China and introduces international judicial
practices into China's judicial procedures, helping align China's
IP protection with international standards. We make suggestions
on the legislation and amendment of China's IP protection laws,
including the Patent Law, Trademark Law, Copyright Law, Criminal
Law and Anti-Monopoly Law, as well as their implementation
rules and legal interpretations. In doing so, we aim to strengthen
IP protection and help create a better environment for innovation
and IP protection in China.

＞

Huawei promotes the ongoing refinement of legal standards for
IP worldwide using its own practices. In 2015, Europe's highest
court – the European Court of Justice – set a framework for
injunctive relief regarding standard-essential patents named
after Huawei. The framework was developed following theruling of a case in which Huawei was the patent holder, and hassince become a basic framework for standard-essential patent
licensing negotiations between standard-essential patent
holders and putative licensees as well as for different courts intheir rulings for remedies.

Respecting and Protecting Intellectual Property: The Foundation of Innovation
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Huawei actively communicates with the National Intellectual
Property Administration of China, the European Patent Office,the United States Patent and Trademark Office, the Japan Patent
Office, as well as the World Intellectual Property Organization.
We provide our inputs and suggestions, from an industry
perspective, on IP application and protection. Huawei also
attends international symposiums on IP between China andthe US, as well as between China and Europe, where we share
our views, experiences, and case studies. Our goal is to promote
cooperation and exchanges around IP practice between majorcountries.

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Conclusion
Sustained innovation has been the foundation of Huawei's survivaland growth over the past 30 years. Huawei believes that protecting
and respecting IP is the foundation of innovation. As an innovative
company, we respect, apply, and contribute to IP rules. Huawei
respects the IP belonging to other parties, and is committed toprotecting its own. We have signed patent cross-license agreementswith many international ICT companies, and we contribute to creating
an environment in which innovation and IP are well protected bothwithin the industry and in every country where we operate.
Like other global companies, Huawei's growth has been accompanied
by IP disputes. We strive to resolve these disputes through amicablenegotiations. We will also resort to judicial procedures or arbitration
for dispute resolution if no agreement can be reached throughnegotiation.
Huawei has the ICT industry's broadest portfolio of products, andour sales are worth USD100 billion. Our innovation achievements
and their associated value, as well as the resolutions of our previous
IP disputes, all demonstrate a well-functioning mechanism forinnovation and IP protection at Huawei.
Sustained innovation and respect for IP are the driving force
behind Huawei's business success of today. They are also the very
foundation upon which we will build a fully connected, intelligent
world for the future.

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HUAWEI TECHNOLOGIES CO.,LTD.
Huawei Industrial Base
Bantian Longgang
Shenzhen 518129,P.R.China
Tel: +86 755 28780808
www.huawei.com

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