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01.16.18

China Tightens Its Knot of Restrictive Rules and Patents

Posted in Asia, Patents at 1:22 am by Dr. Roy Schestowitz

Recent: China’s Self-Destructive Patent Policy Will Replace Assembly Lines of Products With Assembly Lines of Low-Quality Patents and Lawsuits

China's trolls
Almost everything is “made in China”, but usually not by Chinese brands

Summary: Overzealous patent aggressors and patent trolls in China, in addition to an explosion in low-quality patents, may simply discourage companies from doing production/manufacturing there

THE world is changing as economic shifts become irreversible. Karry Lai, writing from Hong Kong this week, says that “China’s anti-unfair competition law amendments became effective January 1″ (2 weeks ago).

“It is becoming increasingly dangerous to operate in China because the risk of lawsuits grows exponentially (with the pace of patenting at truly astronomical levels that defeat the purpose of patent systems).”In addition, China now engages in mass patenting of just about anything, with nearly 1.5 million patent applications per year. “It’s a sign of the times,” IAM said in relation to the latest legal actions (covered in yesterday morning's roundup) and IAM wrote this article about it (as did Lisa Wang in Taiwan, among others). China has become somewhat of a ‘darling’ to IAM because IAM promotes litigation and aggression, which is something that’s soaring in China these days (IAM has just published this self-promotional piece for the patent ‘industry’ in China).

It is becoming increasingly dangerous to operate in China because the risk of lawsuits grows exponentially (with the pace of patenting at truly astronomical levels that defeat the purpose of patent systems). “A month after finding itself on the receiving end of a trade secret lawsuit from Micron,” IAM wrote, “Taiwan’s UMC has asserted patents in China against the US chip major. This latest litigation means another US semiconductor company finds itself staring down the barrel of a patent lawsuit in Fujian, a hub of China’s domestic memory sector.”

China seems so tactlessly eager to drive out companies that manufacture in China. Even companies from Korea, Japan, and maybe Taiwan or Hong Kong (which China attempts to assert complete sovereignty over). This new article by Jean-Pierre Chigne is one among many — most of them published last week — about the Chinese state-connected giant bulldozing Samsung (of South Korea) in a Chinese court. To quote:

As a result of the ruling, Samsung will also have to pay a small court fee. The court also dismissed Huawei’s other claims, and Samsung will be able to appeal the decision.

Both companies have been filing lawsuits against each other in both the United States and China. Huawei also filed a lawsuit against Samsung in the United States for violating patents on cellular technology and software.

It’s no secret that a lot of the world’s manufacturing is done in China, but it’s often done at the behest of (with orders/invoices) corporations from the US, Europe, Japan, Korea and so on. By becoming so legally aggressive China now puts that at danger. These companies could, instead, set up plants in places like Thailand or Cambodia (some already do just that), where the perceived risk of litigation seems lower.

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