Bonum Certa Men Certa

Chinese Firms Dominate the Chinese Mobile Market Where Patents Are Used for Nationalist Protectionism

China now uses patents like it uses speech restrictions/censorship (as a trade barrier)

An ancient door



Summary: China's patent offensive, which is far from a charm offensive, may mean that foreign companies won't survive in the Chinese market, which is itself dominated by companies that are closely connected to the Chinese Communist Party, also known as the Communist Party of China (CPC)

THE patent bubble in China is a fascinating thing. As we noted in our previous post, patent numbers are on the decline in the West (unless one counts only Chinese applications at USPTO, EPO etc.), whereas in China's SIPO patent filings now go through the roof while patent litigation continues to soar. There's not so much press coverage about it, at least not in English. As Chinese patents are written in Mandarin there's also little chance of finding any Western press coverage about these. The consensus is that these are low-quality patents and it's likely that only the 'good ones' reach the USPTO, EPO etc. In other words, those which Westerners can actually read are the better ones.



"The consensus is that these are low-quality patents and it's likely that only the 'good ones' reach the USPTO, EPO etc."China appears to have found a 'hack'. It just floods the market with patents as means of trade war/sanctions strategy. The US appears to have been slow to react, citing mostly "security" -- not patents -- as a pretext (they used to just call Chinese products "knockoff" and/or "piracy'). Both the US and China can now happily pretend to themselves that they don't engage in a trade war and instead hide behind the mask of back doors, patents, and human rights. The US government discourages carriers from stocking ZTE and Huawei phones while publicly asking people not to buy these (outside contracts with carriers). This is all public information -- the type of stuff we habitually cover in our daily links.

To people who are accustomed to thinking of "Asia" (or east Asia) as one big country it may be confusing to learn about tensions (military, trade etc.) between Japan, Korea and China. Sure, a lot of the production is outsourced to mainland China (the US isn't the only country doing so, even Taiwan does). China itself has a very 'conservative' government and it's actively trying to promote homegrown Chinese brands, not Korean and Japanese ones. So it's hardly surprising that China's government-connected firms try to elbow not just small (not government-connected) firms aside/out of the market but also foreign firms.

"...it's hardly surprising that China's government-connected firms try to elbow not just small (not government-connected) firms aside/out of the market but also foreign firms."China now uses patents -- however shallow -- to push out foreign companies (LG already left). That's just our humble assessment. How long before Samsung too decides that the cost of legal battles isn't worth its gradually-shrinking share of the Chinese market? Here's a new article with market share figures for China. Chinese firms already dominate, not even Taiwanese firms (big brands like ASUS/Acer/HTC). Apple's (US) market share is at a meager 11%.

IAM said that "Samsung and Huawei have fared in 42 Chinese patent cases against each other so far," having written about "the 42 patent cases Huawei and Samsung have so far fought against each other in China".

The patent and FRAND dispute between Huawei and Samsung is taking place in both the United States and China. But the speed of the judicial machinery in the latter has made Huawei’s home turf more immediately relevant. That has the Korean company worried – as this blog reported earlier in the month, Samsung has asked a judge in California’s Northern District to prevent Huawei from enforcing an injunction it earned in January from the Shenzhen Intermediate People’s Court. While the Chinese court order has not come into effect, it could do so “within months” if and when avenues for appeal run out.


More than half a decade ago we wrote about Samsung commanding the chart for number of patents in Europe. Now it's China though. There's this new article about Samsung's patent on a "display right before your eyes" or "display that can fly and be controlled by your eyes"; it doesn't matter how much technical leadership Samsung may have, being Korean is going to mean tough competition in China. Samsung's opportunities are likely to be found in the US where, in spite of Apple enjoying high share (it's a US company), Chinese brands are suppressed by a China-hostile government, whereas South Korea is a strong ally (for historical reasons).

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