China’s patent protection

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China’s patent protection

Samsung Electronics now has to face a Chinese smartphone rival in courts over patent issues after it finally resolved legal dispute with Apple Inc. Huawei Technologies ranks third after Apple and Samsung in global smartphone sales and is the world’s largest producer of telecommunications equipment.

The company, however, has so far posed less of threat to the two smartphone leaders as Huawei mostly commands the rank through sales in its colossal home market. In more developed markets, Huawei phones account for 1 percent at best.

Stunned by the lawsuits in separate courts of U.S. and China, Samsung Electronics said it would be scrutinizing over the 11 patents the Chinese company accuses its bigger Korean rival of violating. Unlike patents on designing which Samsung fought with Apple, technology patents are much clear to prove.

While announcing it has launched legal suits, the Chinese company indicated it preferred to settle the matter through out-of-court talks. Industry watchers believe Huawei raised the issue to draw cross-licensing deal with Samsung Electronics.

They note it is part of a new business strategy pitched by Ren Zhengfei, founder of Huawei who has turned a small workshop in Shenzhen into one of the world’s top technology makers.

Ren has been championing the business model of expanding through shared patents with foreign companies after it struck a deal with Ericsson instead of pursuing with legal dispute over patent infringement. The so-called “IP umbrella” would be what he called “buying ticket to the world.”

China media has raised much hoopla over Huawei challenging the Korean electronics giant in courts. A Chinese company has the advantage in economies of scale.

Global companies inevitably would have to give in as not to lose favor in the world’s largest consumer market. Korean companies may have to come up with clever strategy to compete and cooperate with Chinese rivals under new environment.


JoongAng Ilbo, May 27, Page 30

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