Senators and House representatives have introduced bills to disallow new selling licenses for American companies interested in blacklisted corporation Huawei Technologies Co Ltd., but a new Senate bill introduced Thursday would prevent Huawei from buying, selling, and licensing U.S. patents.
The new bill, sponsored by Republican Senators Marco Rubio (Florida) and John Cornyn (Texas), would give the Federal Government the power to prevent any company on the US Entity List from buying new patents, which companies do to gain greater royalties. Huawei also couldn't sell its US patents for money, nor could the company license them and gain money from licensing fees.
The sole motivation behind this new bill pertains to Huawei's strategy to fire back at the US after Trump signed the Executive Order to blacklist Huawei in mid-May and prevent American companies from even selling to or buying from the Shenzhen-based corporation.
Prior to the blacklisting, Huawei knew US wireless communications giant Verizon Wireless owed $1 billion in 5G patent licensing fees for 200 of the company's patents pertaining to network equipment, Internet-of-Things (IoT), and wireline infrastructure, but failed to pursue its licensing fees until the Trump Ban.
The new bill would give the Federal Government the power to have a say in every patent infringement case involving a company on the US Entity List. Blacklisted companies would notify the US Government as well as the US Patent and Trademark Office (USPTO) and provide information such as the infringement, financial impact, and financial damages sought after in the infringement case.
Currently, Huawei is on the Entity List but has also pursued a patent infringement case in court against American chip designer company CNEX after the ban as well, in an attempt to make money because the owner of CNEX is a former Huawei employee.
Huawei employment law demands that, three years post-departure, a former employee must contact Huawei and notify the company of any patent filings it pursues legally. CNEX's owner did not follow Huawei protocol once he left the corporation.
Some say that the new bill introduced would strip Huawei of its rights as a US patent holder to pursue the licensing and royalty fees that belong to it. "If adopted, it could have severe negative ramifications by creating global mistrust of the U.S. and its ability in upholding, as well as safeguarding intellectual property rights," said Huawei Technologies USA Chief Security Officer (CSO) Andy Purdy.
And yet, what is the point of a blacklisting if a company can still make money in the country where the corporation is blacklisted? The whole point of a blacklisting in the US is to forbid the company from gaining any profit (intellectual or financial) whatsoever. The US Entity List was designed to prevent companies from making a profit when the US declares them dangerous for whatever the reason may be.
It doesn't make any logical sense to still insist on Huawei's right to make a profit behind its US patents when Huawei is a threat to the national security of the country in which it owns the patents in the first place.
A good example can be seen with criminals and the justice system. When a person is convicted of a crime, he or she is still an American citizen (they don't lose their citizenship, as tempting as it may be to take it away) but their rights and privileges are severely limited.
That individual has the right to "life, liberty, and the pursuit of happiness," but when he or she pursues his or her happiness at the expense of others' rights and lives, the individual goes to prison and does jail time. They don't get to wear handcuffs yet still go to movies, walk in the park, work a public job, and eat out at public restaurants like law-abiding citizens.
When you're a threat to society, you go to prison and your rights and privileges are limited (taken and, in many cases, stripped away). It's no different when you're a threat to national security, as Huawei is according to good documented evidence, much of which has been exposed over the last several weeks.
As a US patent holder who is a threat to national security, Huawei's patent rights are being limited, as is fitting for a blacklisted company. It defies logic and sound reason for Huawei to be a blacklisted corporation that, as a national security threat, still makes a profit off the country it is threatening.
The new bill introduced by Republican Senators is a commendable one indeed. Huawei's lawsuits and 5G patent licensing fee claim are the Chinese corporation's ways of waging financial battle in the trade war in which it finds itself. Huawei has exposed a loophole in American trade war policy; this new bill will remedy that.