Chinese Company Learns From The West: Builds Up Big Patent Portfolio, Uses It To Sue Apple In China

from the just-as-Techdirt-predicted dept

For many years now, Western governments have been complaining about China's supposed lack of respect for intellectual monopolies, and constantly pushing the country's politicians to tighten the legal framework protecting them. To anyone not blinded by an unquestioning belief in the virtues of copyright and patent maximalism, it was pretty clear where this strategy would end. Indeed, over five years ago, Mike warned where this was leading: towards China repeatedly punishing foreign companies to protect domestic Chinese firms -- in other words, leveraging patents as a tool for protectionism. A post on the IAM blog about legal action taken by the Chinese company BYD, one of Apple's suppliers, shows that Techdirt's predictions are well on the way to being realized:

Apple says BYD filed a pair of patent infringement suits in the Shenzhen Intermediate People’s Court alleging that the antennae in the iPhone 6 plus and various other Apple products infringe BYD’s intellectual property.

Five other defendants working with Apple were also sued -- four Chinese suppliers, and one Chinese distributor.

BYD asked the [Chinese] bench to require "all six defendants to both cease allegedly infringing conduct and destroy allegedly infringing products".

In effect, this is a patent attack on Apple's supply chain in China, and one that would be devastating for the US company if successful. The IAM post points out:

Of the seven final assembly facilities for iPhones, only one is outside of China (a Foxconn facility in Sao Paolo, Brazil). That means any company with valid Chinese patents that it thinks reads on Apple products potentially has a lot of leverage.

There are two crucial elements that make Apple so vulnerable here. First, the fact that its assembly facilities are concentrated in China, and secondly, because there's a Chinese company with patents it thinks it can use against Apple in that country. A March 2014 press release from BYD boasted that it had already amassed more than 12,000 domestic patents and over 8,000 international ones; the figures today are doubtless much higher. Amongst those domestic patents there are probably many that could come in handy for future legal action against other Western companies that assemble their products in China.

Those in the West who pushed China to show more "respect" for patents must be feeling so proud of the progress that Chinese companies have made in this regard, and so pleased now to see Apple being sued in local courts using China's patent laws.

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Filed Under: china, intellectual monopolies, intellectual property, patent thicket, patents, smartphones
Companies: apple, byd, foxconn