As contingency fee stalwarts in the US retreat, in China we love contingent fee patent cases! Bring us your patents! https://goo.gl/5ohXpS Today, we have a guest post from my colleague at Beijing East IP, Austin Chang. Austin provides a summary of the IWNCOMM v. SONY standard-essential patent decision by the Beijing IP Court (IWNCOMM v. Sony (2015) Jing Zhi Min Chu Zi No. 1194). Plaintiff Xi’an Xi Dian Jie Tong Radio Network Co. (“IWNCOMM”) filed a patent infringement action against Sony Mobile Communication (China) Co., Ltd. (“Sony”) on July 2, 2015 for infringing IWNCOMM’s standard-essential patent (“SEP”) No. ZL02139508.X for a mandatory national WAPI standard. According to the judgment, Sony was ordered to (1) immediately cease infringement of IWNCOMM’s SEP found in 35 of Sony’s mobile handsets, (2) pay damages of RMB8.62 million (approximately USD1.25 million), and (3) pay reasonable litigation costs of RMB474,194 (around USD69,000). This is a first instance decision and is appealable to the Beijing High Court within 15 days for IWNCOMM (as a domestic entity) and within30 days for Sony (as a foreign entity) upon receipt of the decision. We will continue to provide updates regarding any further developments. Please see below for the summary of the ruling:
I will be speaking next week on open source licensing in Beijing at a conference jointly sponsored by the US Patent Office (USPTO) and the Ministry of Commerce (MofCOM) of the Government of China. The USPTO and MofCOM are jointly sponsoring a program on cross-border technology licensing on March 28 in Beijing at Renmin University’s law school. A draft agenda is available here. The USPTO/MofCOM program is intended to provide an opportunity to discuss cross-border IP licensing, including China’s Technology Import Export Regulation (“TIER”) and its impact on US technology collaboration and licensing. The program builds upon prior programs with SIPO that explored similar topics. Please email Ms. Liu Jia at jia.liu@trade.gov to RSVP as soon as possible. Thanks to my colleague Mark Cohen of the ChinaIPR.com blog for recommending me to speak! I have had a number of inquiries regarding joining Beijing East IP, so I am pasting below the press release. If anyone would like additional information or would just like to chat, email me at erick.robinson@beijingeastip.com! Beijing, P.R. China (March 15, 2017) Beijing East IP, the top intellectual property firm in China, has hired Erick Robinson as Director of Patent Litigation. Mr. Robinson was most recently Chief Patent Counsel Asia Pacific at Rouse International in Beijing and Shanghai. He will be based in Beijing.
Mr. Robinson previously served as Director of Patents for Qualcomm in Asia, where he managed a broad range of IP issues ranging from patent drafting, prosecution, licensing, and litigation, to regulatory, policy, and antitrust matters. He also managed open source issues for Qualcomm Atheros, and created, implemented, and enforced open source protocols. Before Qualcomm, Erick managed patent and open source matters for Red Hat. Mr. Robinson is an experienced U.S. patent attorney and trial lawyer with a technical background in computer science and physics, as well as biotechnology. He is a trusted authority on patent and antitrust law in China, and has been selected as one of the Leading 300 IP Strategists Worldwide by IAM for the past two years. The author of the influential ChinaPatentBlog.com as well as numerous articles on Chinese patent litigation, Mr. Robinson is frequently quoted in the Wall Street Journal, Financial Times, Intellectual Asset Management, and other publications on Chinese patent and antitrust issues. Erick began his legal career at a Wall Street law firm negotiating and drafting technology agreements, and then moved to Texas, where he managed and tried patent cases for top U.S. law firms Weil Gotshal and McKool Smith. During his time in Texas, he managed bet-the-business patent cases on both the plaintiff and defendant side for Fortune 100 companies to sole inventors. “I am excited and honored to join such a prestigious firm as Beijing East IP,” Mr. Robinson said. “This is the best IP firm in China, and they aggressive, connected, and talented. I am especially looking forward to working with Dr. Lulin Gao, the father of the Chinese patent system.” “We are delighted to welcome Erick to our firm and entrust him with the responsibility to further strengthen firm’s litigation practice,” said Dr. Lulin Gao, founder and Chairman at Beijing East IP, a 2016 inductee into the IP Hall of Fame, and founding commissioner of SIPO. “We are excited to see this innovative combination of a senior US litigator and a well-established and connected China IP full service firm. We look forward to creation of the best litigation practice in China on patent and antitrust,” said Mr. Dragon Wang, Vice President at Beijing East IP. I am excited and proud to announce that I have changed firms. Today I officially joined Beijing East IP as Director of Patent Litigation. I will be based in Beijing. The firm is headed by Dr. Lulin Gao, the father of the Chinese patent system and the first commissioner of the Chinese Patent Office (SIPO). Dr. Gao is the most connected person in IP in China. Beijing East has over 250 IP specialists, and a vast group of technical experts, including many top trial lawyers appointed by the Supreme Court for Patent Litigation. No other firm has the technical resources, legal expertise, and relationships of Beijing East IP. It is an honor to be associated with such an impressive group of lawyers and technical experts. Beijing East IP is the best IP firm in China, and they are aggressive, connected, and talented. I am looking forward to working with this amazingly experienced and knowledgeable team. You can email me at my new firm at Erick.Robinson@BeijingEastIP.com. My response to the recent IP Law360 article by Xiaomi's Jackie Wong is now online. In my rebuttal article on IP Law360, I explain the following:
Let me know what you think of the article! Email me at erick@ChinaPatentBlog.com or contact me on LinkedIn!
I have had a number of requests for a copy of my IAM Magazine article on defending a patent case in China. Since the new edition of IAM Magazine is now available, IAM has been gracious in allowing me to freely distribute the article. You can download a PDF of the article here. Please let me know your thoughts! About ten months ago, I predicted that China was on a quick path to grow its domestic chip industry. This forecast did not require rocket science, since the Chinese government, in 2015, set a goal to increase its production of semiconductors used in China to 40 percent by 2020 and to 70 percent by 2025. This was remarkable given that at the time, Chinese production for its domestic market was only about 5-10% of the semis used in China. But it looks like the Middle Kingdom is well on its way to accomplishing those goals. As announced last week, state-owned Tsinghua Unigroup is investing $30 billion in a memory chip fab in Nanjing. Keep in mind that Intel bought a 20% stake in Tsinghua Unigroup a little over two years ago. I have regularly called this move by Intel likely the best strategic move by an American company in China ever. Why? Other than the obvious, it (1) instantly made Intel a Chinese company (in part -- a very political part) and (2) gave Intel a remarkably direct conduit to the Chinese government. This latter point cannot be underestimated, as it should allow Intel to hear about any political or competitive problems much earlier. The affiliated Tsinghua University is not just one of (if not the) top university in China, but it is very politically connected. For example, it is the alma mater of President Xi Jinping. This large investment by Tsinghua Unigroup makes Intel's move even more brilliant, because they can be a part of the inevitable growth and eventual domination of the Chinese domestic semiconductor industry. I rarely post anything of any real political nature here, but I did want to point out that China wanting to capture the lion's share of its own chip market makes a lot of sense. For China, it is a legitimate national security issue. Keep in mind that semiconductors run every computer, smartphone, or electronic device -- including those that run national security and defense applications. Imagine what would happen if China made 95% of the semiconductors that run the United States' national defense. The US government would scream that the sky is falling and immediately act to change this. China has the right to protect its country and its people. China justifiably wants to have a good share of its own chip market. Obviously, there are also financial reasons for this. For example, China's smartphone market is the world's largest ( interestingly, India is second, in front of the US). Apple sells more iPhones in China than anywhere else. Qualcomm gets 53% of its revenue from China. China needs to keep more revenue from its mobile industry. Since this is, after all, a blog focused on patents, what does all of this have to do with patents? The answer lies in how China will achieve its lofty 40% and 70% semiconductor domestic market share goals by 2020 and 2025, respectively. As noted, China is making huge capital investments. This will lead to less "brain drain" from China to the West, as well as outright increases in innovation in this space. Further, China will provide financial supports for domestic companies to outcompete foreign competitors. But this will not be enough. We will likely soon begin to see more antitrust actions by the Chinese government. But this, too, will be insufficient. Patents and patent enforcement will provide the necessary supplement to ensure China dominates its own market. (Again, because Intel is now connected to China, this will help them if not flourish, at least survive in, China.) The problem is that most of the best-quality Chinese patents are owned by non-Chinese entities. Other than the Chinese tech behemoths such as ZTE and Huawei, Chinese technology companies, including Tsinghua Unigroup, do not own many patents relative to their foreign counterparts, and the patents they do have are not as good as those owned by foreign competitors. The current lack of quality is nothing to be ashamed of. China has generated a huge number of patents in a very short time. In fact, more than 1 million patent applications were filed in China in 2015, but 96% were filed only in China. This is changing quickly before our eyes, but for now, the best Chinese patents are those that are originally filed in the US, Europe, or Japan and then later filed in China as a counterpart to these foreign filings. China has moved faster in patent protection and innovation than any country in the history of the world. But to achieve more consistent quality, the Middle Kingdom needs a few more years as it shifts from quantity to quality. This move is akin to the growth path of many technology companies around the world, including the US. For instance, when I was senior patent counsel at Red Hat, the company had completed a period of tremendous patent growth. Unfortunately, because many of these patents were on operating system technology, and unlike Red Hat, its competitors do not freely provide source code, much of the portfolio was of dubious value due to the inability to determine infringement. During my time there, and in the time since, Red Hat's portfolio has matured from a numbers-based portfolio to more of a quality-based one. But this did not happen overnight, and neither will it for China. But it will happen, and it will happen quickly with the emphasis and support currently provided by the Chinese government. If most Chinese patents owned by Chinese entities are are of lower quality, then how can China use patent litigation to chase away foreign companies to support and grow domestic businesses, especially in the semiconductor industry? The answer is Non-Practicing Entities (NPEs). Whether they are called NPEs, licensing companies, Patent Assertion Entities (PAEs), patent trolls, or any other pejorative term, these businesses have decades of experience in licensing, monetizing, litigating, and enforcing patents. They are fertile ground for advice regarding patent enforcement and strategy for a country and its technology leaders that may be incredibly bright and business-smart, but with little experience in the patent realm. I recently had an article published in the Chinese state media detailing how NPEs can support innovation and technology companies in China. Further, NPEs are uniquely positioned to help China by attacking foreign entities to clear the way for Chinese companies by exerting pressure in ways that only NPEs can. Even if Chinese semiconductor companies had the necessary patents and experience to engage their foreign competitors, they would risk retaliation from these foreign parties. NPEs, on the other hand, can unilaterally attack foreigners without fear of retaliatory patent suits. Although there are a few of antitrust issues, I do not believe that NPEs that act in the best interest of China should, or will, be attacked by the NDRC or any other antitrust agency in China. Indeed, by being a good "friend of China" NPEs will be exactly what China needs: an agent to help enact the goal of China to dominate its domestic industries in semiconductors and other fields. My former employer, Qualcomm, has had a difficult last few years regarding antitrust issues. Starting with China in December 2013, the San Diego-based telecom and semiconductor giant has faced numerous governmental investigations regarding its licensing business. After China, came South Korea (February 2015), Taiwan and the European Union (December 2015), and now the good ol' USA launching antitrust investigations. The FTC complaint filed yesterday, Tuesday, January 17 makes three allegations against Qualcomm:
Qualcomm has posted on its website a response to the FTC complaint which states that "Qualcomm believes the complaint is based on a flawed legal theory, a lack of economic support and significant misconceptions about the mobile technology industry. The complaint seeks to advance the interests and bargaining power of companies that have generated billions in profit from sales of products made possible by the fundamental 3G and 4G cellular technology developed by innovators like Qualcomm." Perhaps most interesting is the fact that the FTC complaint may be politically motivated. FTC Commissioner Maureen Ohlhausen, who voted against the filing, explained in what she notes is a rare dissenting statement that the Commission’s 2-1 decision to sue Qualcomm is “an enforcement action based on a flawed legal theory that "lacks economic and evidentiary support, that was brought on the eve of a new presidential administration, and that, by its mere issuance, will undermine U.S. intellectual property rights in Asia and worldwide.” Despite an appeal from members of Congress to refrain from “midnight litigation” with newly created theories that could damage innovation in the U.S., the FTC accelerated the investigation of Qualcomm and directed the filing of the complaint just days before the change of the Administration though only three of five FTC commissioners are in place. Importantly, the complaint does not allege that Qualcomm charges above fair and reasonable royalties, but rather asserts that Qualcomm held back its IP from competitors and suppliers in an illegal manner. However, the company states that the FTC is incorrect as Qualcomm has never withheld or threatened to withhold chip supply in order to obtain agreement to unfair or unreasonable licensing terms. I do not have a dog in this fight, but on first glance this appears on its face to be another of a long line of steps the Obama Administration has taken to undermine patent rights. This is great for my practice in China as innovators are chases from the US to Asia, but it saddens me as an American. Stay tuned as we learn more. Gan Shaoning, deputy director of the State Intellectual Property Office (SIPO), said at a press conference that since the reform and opening-up, China had established a complete and internationally-recognized legal system for IPR protection with Chinese characteristics, including both administrative and judicial protection, and that the system was something that had taken developed countries hundreds of years to achieve. "Exercising strict IPR protection is not only a demand for the country to attract foreign investment, open up to the outside world, and pursue innovation-driven development, but also an essential requirement for upgrading economic and social development," Gan proclaimed. "We are willing to enhance IPR cooperation and share our experiences of development with our counterparts across the world. At the same time, we oppose unfounded accusations and abuse of IPR to exercise trade protectionism." Gan vowed to further strengthen IP protection and use of IP to encourage innovation. Specifically, "China will increase compensation for cases of malicious infringement and crack down on infringement on IPR through revised and improved laws and regulations," Gan stated. Gan said a guideline, issued by the State Council earlier this month, specified the goals and major tasks for the development of IPR during the 13th Five-Year Plan period (2016-2020). Interestingly, the plan calls for IP royalties earned abroad will rise from 4.44 billion U.S. dollars in 2015 to 10 billion U.S. dollars in 2020. Stay tuned, as China continues its rise in importance in the patent world. Not just in China, but in the West as well.
Big news that I predicted: Meizu and Qualcomm have settled their patent litigation, and Meizu has signed a 3G/4G patent license. The agreement resolves all of patent disputes between Qualcomm and Meizu in China, Germany, France, and the United States! This is good news for Qualcomm, for Meizu, and for China! Patent litigation in China works! See more at https://lnkd.in/d33EtZq For a PDF of the original article, see global_times_-_china_and_npes.pdf
For the online version, see http://www.globaltimes.cn/content/1026067.shtml |
Welcome to the China Patent Blog by Erick Robinson. Erick Robinson's China Patent Blog discusses China's patent system and China's surprisingly effective procedures for enforcing patents. China is leading the world in growth in many areas. Patents are among them. So come along with Erick Robinson while he provides a map to the complicated and mysterious world of patents and patent litigation in China.
AuthorErick Robinson is an experienced American trial lawyer and U.S. patent attorney formerly based in Beijing and now based in Texas. He is a Patent Litigation Partner and Co-Chair of the Intellectual Property Practice at Spencer Fane LLP, where he manages patent litigation, licensing, and prosecution in China and the US. Categories
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Disclaimer: The ideas and opinions at ChinaPatentBlog.com are my own as of the time of posting, have not been vetted with my firm or its clients, and do not necessarily represent the positions of the firm, its lawyers, or any of its clients. None of these posts is intended as legal advice and if you need a lawyer, you should hire one. Nothing in this blog creates an attorney-client relationship. If you make a comment on the post, the comment will become public and beyond your control to change or remove it. |