Verizon may need to pay Huawei more than USD 1 billion in patent licensing fees

Verizon dropped sales of Huawei phones last January.

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Verizon may need to pay Huawei more than USD 1 billion in patent licensing fees

Huawei is asking US telco Verizon to pay licensing fees for more than 200 of its patents, the Wall Street Journal reports, citing people familiar with the matter.

Huawei contacted Verizon in February, alleging that they had violated 238 patents held by the Chinese telecommunications hardware maker. The company told Verizon that they should “solve the patent licensing issue.”

“We trust that you will see the benefit of taking a license to our patent portfolio,” the letter quoted by the WSJ read.

Though Verizon is not a client of Huawei, the US wireless carrier network relies on vendors that use technologies owned by the Chinese company. Huawei’s claims could add up to more than USD 1 billion in fees, according to unnamed sources that spoke to the New York Times.

The potential legal dispute between the two companies comes amid an escalation of a trade war between China and the United States. The US government has banned Huawei domestically and is also championing a global campaign to bar the Shenzhen-based company from participating in the 5G markets of its allies.

Last January, Verizon dropped its plan to sell Huawei phones, reportedly due to pressure from the US government, according to Bloomberg.