China’s IP Power III | Patent Wars in the 4G Era: The Age of Patent Awakening for Chinese Enterprises

Introduction: With the popularization of 5G, the game of 5G patent licensing rates and licensing conditions is spreading across the world. Different from the follower status in the 3G and 4G eras, this time, from Huawei’s announcement of 5G licensing rates to OPPO’s self-developed 5G base station patents counter-suing Nokia in China and Germany, China’s power has been highlighted. In order to remember the precious imprints left by Chinese enterprises on the road of intellectual property construction, Jiwei.com specially launched a series of articles “China IP Power” in the communications SEP battle, to pay tribute to the forerunners and learn from the latecomers.

After the catch-up in the 2G era and the breakthrough in the 3G era, my country’s mobile communication technology has entered a stage of rapid catch-up in the 4G era. In the 4G era, domestic mobile phone manufacturers have risen collectively, with increased sales and overseas expansion, making them the number one camp in the world. However, as a result, they have encountered more challenges in patent litigation.

Among them, the patent wars between Xiaomi and Ericsson, Huawei and Samsung, OPPO and Sharp are the epitome of this era.

In the 3G era, domestic mobile phone manufacturers are generally still in the learning stage of licensing negotiations and patent litigation. In the 4G era, domestic mobile phone manufacturers have further enhanced their strength, further broadened their international vision, and paid more attention to investment in intellectual property rights. Especially after experiencing the antitrust cases of Apple vs. Android and Qualcomm, mobile phone manufacturers have gradually awakened their awareness of patent protection, their ability in negotiation and litigation has also been continuously improved, and they have begun to use legal means to deal with challenges from overseas patent giants.

Xiaomi vs. Ericsson: Mobile phone vendors’ patent awareness awakening

At the end of 2014, Ericsson took Xiaomi, which had just been in the Indian market for five months, to court on the grounds that 8 standard essential patents including ARM, EDGE, 3G and other related technologies were infringed. Subsequently, the Delhi High Court of India ruled that Xiaomi had infringed on Ericsson’s patents and issued a pre-sale injunction.

For a while, all of Xiaomi’s mobile phone products were not allowed to “enter” the Indian market. This was undoubtedly a major blow to Xiaomi, which was actively seeking internationalization at the time.

Taking a fancy to the fast-growing Xiaomi and the vast Indian market, Ericsson’s choice to attack at this time can be described as “well-intentioned.” At the same time, Ericsson has launched a number of patent litigation battles overseas against DEX, Acer, Netgear, Samsung, ZTE and other manufacturers. As the company holding the most key patents for the 3G standard at that time, and 25% with 4G standard LTE technology As the head manufacturer of related patents, Ericsson asks for it.

At this stage, in the face of this situation, new mobile phone manufacturers like Xiaomi generally lack adequate solutions due to the lack of technical accumulation in the patent field.

Since then, Xiaomi has avoided further losses by hiring a local legal team in India, paying the deposit in time, and selling more mobile phones from Qualcomm chips (because Qualcomm and Ericsson have cross-patent licensing), etc., but until October 2019, Ericsson After shook hands with Xiaomi in Delhi, India, this five-year patent dispute officially ended.

Although relying on Qualcomm’s patent licensing to finally solve the problem, the risk of relying on foreign companies’ patents to expand overseas markets is still very obvious.

India forced Xiaomi and other mobile phone manufacturers to realize the important role of intellectual property patents in mobile phones. Since then, Xiaomi has obviously accelerated the progress in patent layout and protection, trying to solve the weak situation in patents.

For example, in 2014, Xiaomi established Zhigu Patent Operation Company, and cooperated in patent acquisition and patent licensing around the world, including later cooperation with Intel, Microsoft and Nokia, which sounded the clarion call for patent reserves.

Huawei vs. Samsung: Chinese and foreign mobile phone manufacturers patent rivalry

In the 4G era, Chinese mobile phone manufacturers have risen in an all-round way. With the improvement of their capabilities, they have the strength and confidence to compete with overseas giants.

The most obvious feature is that mobile phone manufacturers no longer passively respond to challenges from patent litigation, but increasingly choose to take the initiative to respond to and counterclaims overseas and domestically.

Since 2011, Huawei and Samsung have conducted multiple rounds of negotiations on the issue of patent cross-licensing, but no substantial progress has been made.

In May 2016, Huawei took the lead in suing Samsung for patent infringement, and announced that it had formally filed an intellectual property lawsuit against Samsung in the Northern District of California and Shenzhen Intermediate People’s Court. Subsequently, Samsung also responded with a patent lawsuit. This is also the first time for a Chinese and foreign mobile phone manufacturer. Staged a technology patent sparring.

In 2017, the Quanzhou Intermediate People’s Court ruled that the three defendants including Samsung constituted patent infringement against Huawei Terminal Co., Ltd. and required a joint compensation of 80 million yuan.

In May 2019, Huawei and Samsung announced that they had reached a global settlement in a series of infringement disputes involving standard essential patents. In the past eight years, the two parties have successively filed more than 40 lawsuits in China and related countries. This is also the first time that Huawei has signed a cross-licensing agreement with Samsung.

Huawei and Samsung have exchanges and contacts, on the one hand, they have the determination and confidence to try to impact the Apple Samsung camp at that time. According to the 2015 statistics on the number of international PCT patent applications published by the World Intellectual Property Organization (WIPO), Huawei Technologies Co., Ltd. has applied for 3898 patents, ranking first among global companies for the second consecutive year.

On the other hand, Chinese mobile phone manufacturers have begun to move from familiar rules to usage rules in terms of patent protection. After technology research and development, market sales accumulation, and internationalization experience have accumulated to a certain degree, they have become bigger and stronger.

At the same time, the confrontation and reconciliation between Huawei and Samsung have also provided reference cases for other domestic mobile phone manufacturers, that is, paying attention to patent layout and technology research and development, so as to have enough “hole cards” in the game with the giants.

OPPOvs Sharp: The strength behind the “Lightning Counterattack”

At the end of the 4G era, Chinese mobile phone manufacturers have fully occupied the C position, both in terms of technical strength and brand influence. In terms of patent protection, these manufacturers have gradually established a moat. In the face of some challenges and harassment from overseas giants or “PAE” (PAE, Patent Operating Entity), it has become more and more able to deal with it.

A typical patent war between OPPO and Sharp.

At the end of January 2020, Sharp filed a patent infringement lawsuit against OPPO in the Tokyo District Court. In the following three months, Sharp initiated patent lawsuits against OPPO intensively in many countries and regions around the world.

In response, OPPO filed counterclaims against Sharp in the Tokyo Court of Japan and the Shenzhen Intermediate Court of China, and continued to file invalid applications for Sharp’s patents with the State Intellectual Property Office. It is commendable that, including OPPO’s first use of its own patents in the charging field to sued Sharp for infringement of Sharp mobile phones in Japan.

In the end, Sharp’s litigation in various countries and regions around the world, which was the first to trigger the war, ended in failure. OPPO won a full victory in the litigation, and the two sides reached a settlement this year. The outstanding feature of this settlement, which is different from the general patent litigation settlement, is that what the two parties reached is not a license agreement, but a cross-licensing agreement. This means that OPPO has not only received a reasonable license fee, but its patent value has also won the recognition of Sharp.

This kind of “lightning counterattack” in the field of patents and the final victory reflects OPPO’s outstanding strength in patents.

Among the top 10 domestic invention patent licenses (excluding Hong Kong, Macau and Taiwan) announced by the State Intellectual Property Office in 2019, OPPO ranks third, second only to Huawei among companies in the same industry. Moreover, this is the second year that OPPO has been listed in the top three on the list. Compared with 2018, the number of patents granted by OPPO in 2019 has increased significantly. In the field of communications, OPPO’s advantages are even more obvious. According to data from the State Intellectual Property Office, in the H04 (telecommunications technology) category, OPPO ranks second with 1,391 invention patents.

According to OPPO’s official disclosure, as of September 30, 2021, OPPO’s global patent applications have exceeded 73,000, and the number of global authorizations has exceeded 33,000. Among them, the number of invention patent applications exceeds 66,000, and invention patent applications account for 90% of all patent applications. According to the World Intellectual Property Organization (WIPO) released the 2020 International Patent Treaty (PCT) application number rankings, OPPO ranks among the top ten in the world. According to the company’s data, OPPO ranked fifth in the ranking of the number of invention patents from 2015 to 2020, second only to Huawei among mobile phone companies.

In fact, before reconciling with Sharp, OPPO has reconciled or cooperated with Sisvel, ZTE, NTT DOCOMO and other companies in the field of patents, which also reflects OPPO’s strength in patents.

More importantly, from the OPPO’s series of measures and measures to respond to Sharp’s litigation, it is hard and calm, and it also lets foreign rights holders know that negotiations are not unilaterally brandishing patent “sticks”. They are negotiating authorization for domestic counterparts. While setting a benchmark, it also highlights the strength and confidence of Chinese mobile phone manufacturers.

From Huawei to OPPO, behind this series of lawsuits is the rise of Chinese mobile phone manufacturers’ patent awareness and capabilities. After experiencing the ignorance of the entire 3G era, and in the 4G era, Chinese mobile phone manufacturers finally bloomed their own brilliance on the international patent stage, and with the advent of the 5G era, the brilliance gradually flourished.