Bonum Certa Men Certa

China's Patent Policy Likely to Drive Out Foreign Companies and Maybe That's Just the Intention

From manufacturing powerhouse to litigation hub; what would that cause to investment though?

Pudong skyline
Pudong, a district of Shanghai, China



Summary: While corporate media focuses on trade war (e.g. US almost banning Huawei-branded phones) there's a broader picture which includes patent aspects (Huawei and other Chinese giants use patents for sanctions)

AS we noted in our last post, it's becoming a liability for firms to operate (e.g. sell) in China, manufacture in China, or be based in China because it makes them susceptible to more patent lawsuits. Korean, Japanese, European and American firms might learn this sooner or later.



As IAM put it yesterday, "Shenzhen will play host to one of the first patent-related domestic court clashes between Chinese mobile device manufacturers following Coolpad’s launch of a suit against Xiaomi..."

IAM loves it, as its funding sources are litigators and even trolls. But what does that mean for the rest of us, who are neither litigators nor trolls?

IAM covered this latest twist in the Coolpad case (mentioned here last week), alluding to news from late on Friday:

Chinese smartphone maker Coolpad announced late Friday night that it has sued larger rival Xiaomi for infringing three Chinese invention patents. The cases will play out in the city where Coolpad is headquartered, at the Shenzhen Intermediate People’s Court. Notably, it will be one of the first major patent clashes between major players in China’s smartphone sector to play out in domestic courts.

In a voluntary disclosure filed with the Stock Exchange of Hong Kong, Coolpad said that six separate cases have been accepted by the Shenzhen Intermediate People’s Court. The plaintiff is a subsidiary of the group called Yulong Computer Telecommunication Scientific.


Korean companies like Samsung are also being legally harassed in China by patent giants and trolls. It's not the sort of environment it used to be; it's a lot more hostile. There are even embargoes being imposed by the state (to protect state-connected firms like Huawei).

What adds to/fans the flames of this litigation atmosphere is the poor patent scope. SIPO has gone further and further out of its way to expand the scope of patents. Last week we wrote about the Court of Appeals for the Federal Circuit (CAFC) ruling in favour of GUI patents [1, 2] (incidentally against a Korean company, LG, which we've just mentioned), but this lunacy which is patents on GUIs has gone wild in China. Yesterday Managing IP published this article about that:

At the end of December 2017, Beijing IP Court decided the first GUI (graphical user interface) patent infringement case in China. This case is a battle between two anti-virus software giants: the plaintiff Qihoo 360 currently is the largest cyber security company in China; and the defendant Jiangmin is a pioneer anti-virus software provider in the PC era. Beijing IP Court rendered a decision in favour of Jiangmin.


There's also a slightly older article about that. To quote:

China’s first lawsuit for infringement of graphical user interface (GUI) design has been recently concluded by the Beijing IP Court. This case has attracted much public attention, as GUI designs have become protectable in China by so-called design patents only as of 1 May 2014, and despite a large number of GUI design patents being granted since then, their enforceability remained untested until the present case. The judgment issued on 25 December 2017 now results in heated discussion and leaves, in particular, software developers counting on strong GUI design protection very disappointed.


GUI patents are so broad and vague that it's pretty incredible they even get granted. They're not inventions. Combine that with China's litigation rates (soaring nowadays) and it looks ever more daunting to enter the Chinese market. Maybe, in a sense, this is what Xi's CPC intended; maybe it just wants to drive out foreign companies in order to promote local brands like Huawei (government-connected). Censorship has long been one pretext for banning foreign firms from operating in China, so why not patents? It makes it look a lot more rational than nativism/nationalism.

Recent Techrights' Posts

Microsoft Layoffs and Closures Now Reported in Africa
Microsoft Uninstalls Nigeria as it closes African Development Centre (ADC) in Lagos
Over at Tux Machines...
GNU/Linux news for the past day
 
Support for harassment and abuse victims
Reprinted with permission from Daniel Pocock
Gemini Links 09/05/2024: Being Sick Enough and End of “World of Ends“
Links for the day
Links 09/05/2024: 'Hey Hi' (AI) Bubble Implodes Some More, Microsoft Layoffs So Widespread It's Hard to Keep Track
Links for the day
Speaking of Enshittification and Freedom, We've Still Not Begun Tackling the UEFI 'Secure' Boot Mess (Preventing GNU/Linux From Even Booting!)
Microsoft continues to fly under the radar and commit competition crimes with impunity
Microsoft Has Just Confirmed Mass Layoffs in Nigeria, It Now Adds Insult to Injury With Price Hikes for Locals
It's not like Microsoft paid them good salaries
Software Enshittification or Freedom? It's not a hard choice!
Reprinted from Alexandre Oliva
Links 09/05/2024: More Microsoft Layoffs on the Way
Links for the day
Amid Microsoft Layoffs in Nigeria GNU/Linux Climbs Above 6% Market Share (Not Including ChromeOS)
Hundreds are being laid off by Microsoft in Nigeria, based on yesterday's reports
[Meme] Blame the Robots or the 'Hey Hi' (AI), It Always Works in Today's Media
Companies do not have financial troubles! They have "efficiencies"...
News Reports Say Many More Microsoft Layoffs on the Way, Rumours Say Red Hat Also Imminently a Target
Microsoft is slipping out of control
Links 09/05/2024: Diplomacy Efforts With China, AstraZeneca Stops Experimenting With COVID-19 Vaccines
Links for the day
IRC Proceedings: Wednesday, May 08, 2024
IRC logs for Wednesday, May 08, 2024
Gemini Links 09/05/2024: Registered Computer Professionals and TLS (The Long Slog)
Links for the day
Links 08/05/2024: Android Malware and "AI" Hype
Links for the day
[Meme] Technical Committee With People Who Are Not Technical
the computing/computer industry being occupied by people who lack suitable background
The Demise of Computer Science Education
Education is essential for the future; without it, whole nations will perish
[Video] Prisons for the Minds and for Tech Workers
Today's video talks about what happens to workforces (across disciplines) in recent years
[Meme] Struggling to Leave Its Nazi Past Behind
digital arson
Microsoft Declines to Talk About How Many People It Has Just Laid Off
Hours ago in IGN: "Microsoft did not say how many staff will lose their jobs, but significant layoffs are inevitable. IGN has asked Bethesda for comment. Microsoft declined to expand further when contacted by IGN."
Microsoft Windows in South America: From 99% to 87%
the latest from statCounter
It's Rather Obvious Why They Try to Silence Richard Stallman, Eben Moglen, and Daniel Pocock
Some of them already sent physically menacing messages to Daniel Pocock
IRC Network of Techrights Turns 3 (or 16 if We Count the Freenode Days)
In a few months IRC turns 36
Sedating Oneself (and Shareholders) With Fuzzy Buzzwords and Pointless Acquisitions
IBM trying to buy time
Clickfraud Spamnil Ran Out of Clickfraud Budget, Apparently
sooner or later charlatans and frauds run out of steam
Techrights Gets Under the Skin of Bad, Corrupt, Immoral People (That's a Good Thing)
Journalism is the lifeblood of democracy and free societies
Companies Do Not Shut Down Offices and Lay Off Staff en Masse (Morale and Reputation Issue) Unless They're in Deep Financial Trouble
Microsoft has been faking its financial performance for years
IRC Proceedings: Tuesday, May 07, 2024
IRC logs for Tuesday, May 07, 2024
Over at Tux Machines...
GNU/Linux news for the past day
[Video] Leaving Microsoft Behind for the Sake of National Security
Threats to "National Security" aren't some users with an Android phone but Microsoft at the root of things
GNU/Linux and ChromeOS Now at 6% in France, According to statCounter
numbers from statCounter
Gemini Links 07/05/2024: Music Spotlight and Network Knobs
Links for the day
Only Weeks After Microsoft Closed Offices and Studios It is Closing Several More (Many Layoffs, Still Deeply Debt-Saddled)
When the sad news writes itself
Bolivarian Republic Of Venezuela: GNU/Linux Reaches 9% (ChromeOS Included)
Venezuela must have lost interest in some American proprietary software when users were locked out of their own data (Adobe) and the costs could no longer be justified
[Video] Microsoft is Like Big Oil, Big Tobacco, and Other Perpetrators of Fear, Uncertainty, Doubt/Fear-mongering
openwashing, Microsoft lobbying, and Microsoft subsidies (e.g. bailouts in the form of 'defence' contracts)
Security & Debian: Urgent: New Feed URLs after another WIPO censorship
Reprinted with permission from Daniel Pocock
World Press Freedom Day: WIPO censors Debian suicide cluster
Reprinted with permission from Daniel Pocock
Gemini Links 07/05/2024: Smashing Windows (Moving to GNU/Linux) and Mastodon Time-wasting
Links for the day
Links 07/05/2024: Pulitzer for Supreme Court Expose, New Threats to Media Reported
Links for the day
Links 07/05/2024: Cheap EVs and Cloudflare Layoffs
Links for the day
Berlin police declined to investigate FSFE Nazi comparisons
Reprinted with permission from Daniel Pocock
[Meme] Communities Governed by Parasitic Elements and Girlfriends (Who Can't Understand Those Communities)
Karen Sandler and Molly de Blanc present at DebConf18
[Meme] You Can't Kill an Idea (or Facts)
Thankfully, in Western societies, there's still due process, rule of law etc. You don't just hire assassins or imprison critics
[Meme] Software in the Public Interest (SPI), Inc, Values Articles of Daniel Pocock at ~$5,000 Each (and Fails to Hide the Facts)
we are laughing, not grieving
IRC Proceedings: Monday, May 06, 2024
IRC logs for Monday, May 06, 2024
Over at Tux Machines...
GNU/Linux news for the past day
[Meme] About 2,564 Internet Sites Now at Risk of Hostile Takeover by Microsoft-Sponsored Software in the Public Interest (SPI)
WIPO censors Debian suicide cluster
Links 07/05/2024: Burning Plastic Waste, Facebook Censoring Politicians
Links for the day
Gemini Links 07/05/2024: Smashing Windows (Microsoft Losing Users to GNU/Linux), Sixty Years of BASIC
Links for the day