How Can Foreign Giants Initiate Patent Wars?

In recent years,

Breaking down foreign factories or technological alliances often leads to patent wars against different domestic manufacturers, and their striking intensity varies.

The general situation is that the higher the market share and the lower the patent chips, the sooner the Chinese enterprises will encounter the patent war.

If the foreign competitors of the company have a larger market share, foreign manufacturers often charge royalties for the use of some accessories, or refuse to issue licenses completely.

The purpose is often to force the manufacturer to stop production completely and withdraw from the market.

On the contrary, if the market share of foreign investors is not too large, the foreign manufacturer will be willing to issue a license and impose a certain royalty.

In recent years, the patent wars of Chinese enterprises often have the elements of blackmail.

Under the present situation, such blackmail is difficult to be effectively counterattacked.

Foreign big factories and technology alliances do not point out which products of which manufacturers infringe on which patent rights of which products they claim. Instead, they list out hundreds or thousands of patents that may be used to produce a product, and say that the products of a certain enterprise must have infringed some of their patents, otherwise they will not be able to produce related products.

According to the accusation of infringement, large foreign companies have applied for a security deposit at the customs to seize the import products from the company.

Because enterprises generally do not have the time or ability to initiate proceedings in foreign courts, they are often forced to participate in the patent payment negotiations.

The negotiations also do not analyze which patents the companies specifically infringed, nor analyze the content of their own technology. Instead, they regard infringement as a fact and discuss only how much royalties the manufacturer should pay for each product, or how much percentage of the total price is used as royalty.

Although foreign factories are trying to take away most of the profits, they will also pay attention to leaving some meager profits for their suppliers to survive.

Order exploitation of foreign big factories and technology alliances monopolized core technologies in many fields.

They often let companies with no patent chips to use foreign technology to produce spare parts, assemble products, and then paste the brand of foreign Dachang to enter the international market.

In this way, foreign companies have blocked the opportunity to bargain with them from the two paths of technology and brand.

These manufacturers have become suppliers of equipment and workers instead of providing their own technology and brand.

Foreign factories often set the contract price of parts and finished products very low, but the price of patent licensing fees and brand use fees is very high.

In this way, although some manufacturers produce the world's largest share of laptops and other electronic products, manufacturers earn very little money.

For example, in 2003, Samsung and Sanbao provided technology and brand in Taiwan, and commissioned ASUS and other Taiwan manufacturers in OEM or ODM to produce notebook computers for large-scale production, thus supplying the US and European markets.

In this kind of OEM paction, ASUS and other Taiwan manufacturers earn far less money for each machine than the Korea Companies which only provides technology and brand.

Due to the lack of strong technology and brand, Taiwan manufacturers who are suffering from order exploitation are actually hard to get rid of their fate.

To stop the alliance, many companies already have more patent chips. They have already joined some Western patent pools.

In this way, they can use foreign technology without paying or paying less.

However, more enterprises have lost the opportunity to form alliances with local manufacturers to fight foreign patent alliances.

For example, in the field of LCD display, Taiwan Institute of technology has the strongest patent chips.

In 1999, it combined with Taiwan manufacturers to form a technology alliance to fight the patent war of foreign LCD manufacturers.

As a result, foreign factories failed.

If the local manufacturers who own the patent chips stand in the camp of foreign factories, then a large number of local manufacturers can only be slaughtered.

Before the outbreak of patent war, foreign manufacturers often tried their best to split up local enterprises and prevent local manufacturers from forming alliances.

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In spite of the fact that some foreign companies are launching the patent war with the members of the technology alliance, their main purpose is to advertise and show their strength.

Secondly, the purpose is to cheat money.

For example, in the patent war between China and foreign countries in DVD and digital cameras, some foreign manufacturers do not have much patent chips.

They clamour for patent fees from Chinese manufacturers.

Its main purpose is to use domestic media for free advertising.

If Chinese manufacturers pay for them bewildered, they will be followed by the foreign companies.

According to the principle of independence of intellectual property protection, the intellectual property rights of each country on the same object are independent of each other.

Therefore, legally purchased parts and finished products from a country may infringe upon intellectual property rights of another country, such as patent right, integrated circuit layout design, trademark right, copyright, geographical indication right, and trade secret right.

For example, in "Hongkong PU company, Beijing Jingyan company v. Guangzhou Avon Co case", the US UT company sells a large database system management software that enjoys American copyright to Guangzhou Avon Co.

The defendant made extensive commercial use of the software in China.

But UT has licensed all the intellectual property rights of the software in China to the first plaintiff.

The first plaintiff later pferred some rights of the software: exclusive agency, operation, development, localization and sale to the second plaintiff.

Later, the two plaintiffs' accusation against Guangzhou AVON was supported by the Chinese court.

In this way, AVON Guangzhou has to pay copyright royalties again in China for its legally purchased software from the United States.

Copyrighted computer software is often embedded in a large number of visible goods.

Under such circumstances, even if the tangible goods do not infringe the patent rights of the relevant countries, the layout and design rights of the integrated circuits, the trademark rights, the right of geographical indications and the right to trade secrets, they may still infringe upon the copyright of many countries.

(Wei Yanliang)

Why are we always hurt?

In recent years, foreign giants have launched a patent war in China. The war is widespread in many fields such as IT and home appliances. From the patent wars in recent years, it is easy to see that foreign giants are well prepared and ill prepared.

By contrast, most enterprises in China are in trouble until they see trouble. At this point, it is too difficult to lose their lawsuit.

In fact, the ancients in China have summed up the idea of knowing one's own and knowing one another and fighting for ever.

Armed themselves, understanding the enemy and making strategic plans as early as possible, only in this way can we avoid the fate of defeat in the patent war with foreign giants.