According to Gartner's statistics, in the third quarter of 20 13, ZTE, Huawei, Lenovo, TCL Communication and Yulong Coolpad ranked 5th, 6th, 7th, 8th and//in the global market with market share of 3.0%, 3.0%, 2.9% and 1.9% respectively.
These enterprising China manufacturers, who have good cost control, are coveting greater breakthroughs in various markets around the world. However, for professional patent hooligans, they are the perfect "big fat sheep" in China. The maw of patent hooligans
In September of 20 13, Microsoft (MSFT：NASDAQ) bought Nokia (NOK：NYSE) mobile phone business for 3.79 billion euros, and at the same time spent1650 million euros to buy the Nokia patent license for 10 years. "We can get the right to use Nokia patents, but we won't get the ownership of the patents themselves." Brad Smith, Microsoft's general counsel, said at the time.
Why didn't Nokia also sell the patent to Microsoft? It is generally speculated in the industry that Nokia, which owns many core and high-quality patents in the mobile communication industry, will probably continue to collect a lot of patent fees through its patent portfolio in the future. Nokia's legal spokesman Mark Durrant also said after the disclosure of the acquisition transaction: "Until now, Nokia has not licensed its own patents in large quantities, but when the mobile phone business is divested, we will try to license technology."
At the end of 20 13, Joaquin Almunia, the EU Competition Commissioner, sternly warned Nokia not to become a "patent hooligan", saying that if Nokia tried to use its patent in a rogue way, it would not hesitate to file an antitrust lawsuit.
Microsoft's acquisition of Nokia is under review by the Ministry of Commerce of China. Many mobile phone companies in China are worried that Nokia, which has divested its mobile phone business, may propose huge patent licensing fees, which will limit fair competition in the market and weaken the competitiveness of mobile phone companies in China.
2 1 Century Business Herald The reporter learned from the relevant mobile phone manufacturers that in addition to the Ministry of Commerce, the National Development and Reform Commission also joined the review of this transaction.
Whether Nokia will become a "patent hooligan" is still inconclusive, but some of the patents sold by this company in August 20 12 have become patent arrows aimed at China manufacturers. Vringo, who pushed ZTE and ASUS to the German dock, is one of the purchasers of patents sold by Nokia.
No matter from which angle, Vringo has the characteristics of "patent hooligan". Vringo claims to run a publishing platform for mobile social applications, but this part of the physical business has hardly generated revenue. The company's financial report for the third quarter ended September 30, 200013 shows that its revenue is only $50,000, but its total operating expenses are11226,000, and its net loss is10.56 million.
Vringo's main business model is to obtain patents through acquisition and other means, and then launch patent litigation against the so-called "Big Fat Sheep" company in the global market, and seek patent licensing fees.
On July 9, 20 12, Vringo Company experienced a change of control right, and then in August, it announced that it had purchased about 500 patents from Nokia, including communication management, data and signal transmission, mobility management, frequency resource management and services, involving 22 million US dollars.
Microsoft is one of the "big sheep" in Vringo. On May 30th, 20 13, Microsoft reached a settlement agreement with Vringo after some court battles, and Microsoft compensated Vringo for1000000 dollars, and paid a certain percentage of the licensing fees for related patents in the future. At the same time, Microsoft also transferred six patents to Vringo.
Before and after obtaining the patent transfer from Nokia, Vringo started a global lawsuit against ZTE. Both sides have their own offenses and defenses in this combined lawsuit, and it is hard to predict whether they will win or lose.
Shen Jianfeng, director of global intellectual property rights of ZTE, told the reporter of 2 1 Century Business Herald that patent operating companies are divided into two categories: super-large patent operating companies and small and medium-sized patent operating companies. The former, such as InterDigital, IV, Acacai, etc., are generally transformed from entity companies or through scale mergers and acquisitions, and have huge patent assets; The latter generally owns a small amount of patent assets through their own research and development or mergers and acquisitions.
However, the two types of companies are almost the same in the final appeal, mainly through strategic cooperation, asset operation and capitalization of their patent asset packages, such as common patent sales, patent licensing and patent litigation, in order to obtain benefits. Among them, patent litigation is their core weapon. By launching large-scale litigation, some defendants are forced to obtain early settlement, and then these funds are used to continue litigation with their target objects to earn the maximum income. Such companies attract investors again or promote the stock price to rise through the proceeds of patent operation, obtain new funds for further research and development, create patents or acquire patents, and then continue to operate patent packages, forming a cycle.
"As the scale of China companies grows bigger and bigger, and they go to overseas markets with greater strength, the more likely they are to become' big fat sheep' exposed to' patent hooligans' sniper rifles." Shen Jianfeng said.
According to the statistics of Patent Freedom, Huawei and Lenovo both encountered 13 lawsuits initiated by "patent hooligans" in 20 12, but in the first half of 20 13, the number of such lawsuits encountered by Huawei rose to 15. The counterattack of "Big Fat Sheep"
Shen Jianfeng emphasized to the reporter of 2 1 Century Business Herald that ZTE attaches great importance to the protection of independent intellectual property rights and respects the intellectual property rights of other companies. ZTE has deployed more than 50,000 patents and10.4 million authorized patents around the world, especially in the field of LTE, which has declared more than 800 basic patents, accounting for 10% of the world. However, "ZTE opposes disorderly intellectual property rights.
If an entity enterprise is targeted by patent hooligans, it must first make sure to formulate strategies under the principle of maximizing interests, and secondly, comprehensively use conventional means, such as actively responding to lawsuits, advocating non-infringement or invalidation of the patent of the other party, initiating counterclaims, etc., and unconventional means to deal with them.
In fact, ZTE and Huawei recently won a preliminary victory in a patent infringement lawsuit against InterDigital.
As a large NPE, InterDigital has nearly 20,000 patents (or patent applications), and claims to have a number of 2G, 3G and 4G standard patents in the field of wireless communication. 20 1 1 In July, InterDigital sued ZTE and other enterprises for patent infringement in the United States International Trade Commission (ITC) and the federal district court, demanding that 337 investigation be initiated and an exclusion order be issued to prohibit the defendant company from selling 3G mobile devices in the United States.
20 131February 20th, the United States made a final ruling on the case of patent infringement such as InterDigital v. ZTE, and ZTE did not violate Section 337, did not infringe six of the seven patents sued by the plaintiff, and the remaining one was also deemed invalid. The lawsuit between ZTE and InterDigital in the federal district court is still in the contest stage.
In 20 13 years, ZTE has successively launched 337 investigations in the United States by three patent operating companies, including Interdigital, TPL and Flashpoint.
Looking back on the process of responding to the lawsuit, Shen Jianfeng told the reporter of 2 1 Century Business Herald that since InterDigital initiated the lawsuit in 20 1 1, ZTE has set up relevant responding teams including technology, business, law, brand and securities, and selected law firms with rich ITC litigation experience to actively respond to the lawsuit. In the overall response process, it not only includes counterattacks against the conventional defense points of InterDigital litigation, such as the global invalidity and non-infringement defense of the patents involved and the design analysis of the products, but also includes active counterattacks against InterDigital, including counterclaims and anti-monopoly investigation preparations in China.
On the overall strategy, in addition to actively responding to the defense and taking the initiative to fight back, ZTE has also made deep alliances with other defendants, and cooperated in responding to the defense strategy and resource allocation.
"Joint acquisition is also one of ZTE's solutions to resolve disputes with InterDigital." Shen Jianfeng told the reporter of 2 1 Century Business Herald that ZTE is actively tracking and participating in the acquisition project of InterDigital by major companies and patent defense alliance in the industry.
Huawei, for its part, told the reporter of 2 1 Century Business Herald that since it received InterDigital's lawsuit in July 201,Huawei has actively responded to the lawsuit, filed counterclaims in the courts of the United States and China, and filed antitrust complaints against InterDigital's abuse of basic patents with the governments of China, Europe and the United States. 20 13 10, Huawei's counterclaim in China received a second-instance effective judgment from the Guangdong Provincial High Court, and most of Huawei's claims were supported. Two months later, Huawei also won the case in the final decision of the US International Trade Commission, and all related patents of InterDigital were ruled invalid or non-infringing. 20 121February 23rd, Huawei and InterDigital reached a settlement, and both parties withdrew the relevant litigation and settled some disputes through arbitration. Subtle change in attitudes of European and American government
In Shen Jianfeng's view, winning the case against InterDigital demonstrated ZTE's determination and ability to respond to patent management companies' abuse, and objectively encouraged China companies' confidence in conducting intellectual property litigation overseas, including ITC.
"This victory can, to a certain extent, reflect the recent change in the attitude of the US judicial administrative system towards patent management companies." Shen Jianfeng told reporters that this change lies in the change from the previous restraint and tolerance to active regulation, "which will greatly encourage the determination of entities to confront patent operating companies."
"We can see this change from the American Invention Act signed by US President Barack Obama in 20 1 1 and the Innovation Act approved by the US House of Representatives in 20 13." Shen Jianfeng believes that these bills effectively regulate the phenomenon of excessive litigation by patent operating companies.
Huawei believes that the ITC's decision on InterDigital case did not put forward new restrictions on patent operating companies. However, the US government did put forward many measures to restrict patent operating companies and basic patent holders involved in standards from abusing their patents.
In addition, the European Commission's Competition Commissioner recently publicly warned Nokia not to become a "patent cockroach", and European countries cautiously issued bans on standards-related patents, all of which showed the determination of overseas markets, especially countries and regions with developed intellectual property protection such as Europe and the United States, to regulate patent operating companies.
At the same time, many government departments, including China, have also launched a series of anti-monopoly investigations, showing the restrictions on patent abuse.
In addition to the intervention of the Ministry of Commerce and the National Development and Reform Commission in Microsoft's acquisition of Nokia, the National Development and Reform Commission of China also launched an anti-monopoly investigation on Qualcomm at the end of 20 13 1 1. Subsequently, the English version of China Daily quoted Xu Kunlin, director of the price supervision and inspection department of the National Development and Reform Commission, as saying that the department had mastered a lot of evidence about anti-monopoly in Qualcomm.
"We have seen that many governments, including China, India and the United States, strongly demand reform and restrictions on this' patent hooligan' practice, and have some precedents." Guo Aiping told the reporter of 2 1 Century Business Herald that it is not that patent fees should not be paid, but the collection of patent fees should be just, reasonable and fair. "Therefore, TCL Communication supports the domestic government to take all cases with the tendency of' patent hooliganism' seriously".
Guo Aiping said that with the acquisition of Alcatel's mobile phone business, TCL Communication obtained core patents including 2G and 2.5G, and at the same time, through its own efforts, it also owned some core patents of 3G and 4G. "Although the number is not large, these are enough to be exchanged with many patent owners and reduce patent fees".
Shen Jianfeng said that with the advent of the 4G era, due to the high dispersion of LTE patents and the relatively balanced strength of various communication equipment manufacturers, the share of intellectual property rights of China enterprises in the 4G field has been significantly improved, forming a bargaining chip against major competitors. ZTE believes that in the 4G era, licensing negotiation through patent litigation will lead to more chaotic competition. Therefore, it will become a trend in the industry to license intellectual property rights in a more open, fair and win-win environment by establishing a pan-industry patent pool mechanism and using a "quasi-one-stop" licensing model.
"It is not realistic to eliminate the phenomenon of indiscriminate complaints in the short term." Although Shen Jianfeng believes that the attitude of the United States has changed subtly, it must also be noted that as the world's largest exporter of intellectual property rights, patent licensing and operation are still important industries in the United States, which play an important role in the US trade balance, intellectual property innovation incentives and value-added, and also involve the activity and survival of R&D institutions, enterprises, downstream law firms and legal service institutions. Therefore, restrictions on patent operating companies will be a gradual process.
In this process, as China enterprises participating in the American market competition, on the one hand, they actively adapt to and apply the rules of the American patent game; On the other hand, under the general environmental trend, we should actively promote the reform of judicial administration and forge our own strength, and face patent competition with a more open and confident attitude.