LED intellectual property risk control and prevention strategy

This month was published in the February issue of "High-tech LED" magazine

With the rapid development of China's LED industry, competition in the international market has intensified. Intellectual property has become one of the main means of combating competitors and occupying market advantages. In March 2008, the US 337 survey first investigated the investigation of nine LED companies in China and shocked the entire industry. In November 2009, Japanese LED giant Nichia announced that it had initiated patent infringement lawsuits against mainland China, Hong Kong and Canadian manufacturers in the United States. China's LED industry faces serious challenges in intellectual property issues.

I. The threat of international intellectual property storms to Chinese enterprises
China's role in the global economy is becoming more and more important. In the process of changing the international market and interest distribution pattern, developed countries such as Europe and the United States use intellectual property protection to intercept Chinese companies entering the international market. For LED companies that generally attach importance to efficiency growth while ignoring innovation and protection, they face a severe test of intellectual property issues, mainly in:
1,337 investigation became a barrier for the LED industry to enter the US market
The “337 investigation” is derived from the United States’ Section 337 of the 1930 Tariff Act, which is a quasi-judicial act authorized by Congress. According to the law, the US International Trade Commission (ITC) has extensive investigative powers and discretionary powers on “unfair practices” and “unfair practices” in the field of import trade on the premise of US corporate prosecution. If the respondent violates the above provisions, the US International Trade Commission has the right to make an exclusion order or an injunction. Its effectiveness not only involves related products of specific enterprises, but also related products that may affect the whole industry cannot enter the US market.
In recent years, 337 investigation cases have been mainly targeted at Asian countries, and a quarter of them involve Chinese companies. In March 2008, ITC filed a lawsuit against companies infringing US NO.5,252,449 patents, including 9 LED companies in cities such as Guangzhou, Shenzhen, Hangzhou, and Foshan in China. In April 2009, Xiamen LED companies were again Listed in the 337 survey list. The 337 investigation case sounded the alarm of intellectual property rights for Chinese LED companies that are developing momentum and weak in core technology.
2. The “Patent Review Expressway” speeds up the patent “enclosure movement” in developed countries.
In order to obtain patent protection for a technology in many countries around the world as soon as possible, the patent examination and authorization institutions in developed countries are strengthening cooperation and establishing a cooperation model for patent examination highway (PPH), which is a national intellectual property office. An agreement with other national IP offices provides a means of significantly reducing the time and cost of obtaining patent protection abroad, and supporting products to quickly obtain low-cost and strong patent protection on a global scale. At present, the United States Patent and Trademark Office (USPTO), the Japanese Patent Office (JPO), and the European Patent Office (EPO) have been or are being tested. On September 25, 2009, the patent offices of 21 countries and regions, including Japan, the United States and Europe, held an international conference with WIPO in Geneva to establish "a reference to other countries' review information to quickly apply for the same patent in their own country or region. The network authorizing the judgment reached an agreement that the number of patent applications in the above 21 countries and regions accounted for the opening of the patent-examined expressway, accelerating the “enclosure movement” of patents in developed countries around the world.
3. The intellectual property risks of OEM enterprises have increased, and domestic and international litigation disputes have increased.
In the OEM processing of domestic enterprises in cooperation with large foreign companies, the foreign party pays great attention to the issue of intellectual property liability, and the Chinese often only consider the order and ignore the risk of intellectual property infringement, so that the OEM enterprise is the buyer of foreign intellectual property litigation. In early 2008, a battery company in Guangzhou cooperated with Philips to supply lithium iron batteries to its processing. Shortly after the launch of the product in the European market, it was immediately blocked by the US Energizer battery. Energizer demanded immediate withdrawal of the product and withdrawal from the market on the grounds that the product infringed its patent. Philips Company requested the Guangzhou company to deal with it according to the intellectual property liability clause in the processing agreement. Energizer did not achieve satisfactory results through the warning letter, and immediately filed a patent infringement lawsuit against Philips in Germany. The Guangzhou company is required to cooperate with the defense and bear all litigation expenses and lawyer fees. A battery company in Guangzhou entrusted us to cooperate with German lawyers, and carefully analyze and contrast with the company's technical personnel to win the non-infringement analysis and defense.
Second, the negative state of Chinese enterprises on intellectual property issues
Compared with the full use of the intellectual property legal system by developed foreign companies, Chinese enterprises are relatively negative and helpless in terms of risk prevention and self-protection of intellectual property rights and in response to international intellectual property disputes.
First of all, in the patent application, although the state is actively promoting the work, the patent application has become the government's "internal affairs" and the enterprise has "external affairs." In 2008, the author participated in a survey on the patent application work of the Pearl River Delta in Guangdong. I found that the current patent application of Chinese enterprises has the following problems: (1) “Patent useless” makes the enterprise lack the enthusiasm of patent application; (2) Recognition Insufficient makes enterprises choose “closed development”; (3) enterprises rely too much on government; (4) lack of protection awareness and application strategy; (5) enterprise intellectual property management is chaotic, and inventors' interests are not effectively protected. Although the number of patent applications in China has increased rapidly in recent years, mainly driven by the government's policies, there is no fundamental change in the innovation capabilities and motivation of real enterprises.
Second, exporting companies entering the international market are unprepared for intellectual property issues. (1) There is no literature search and investigation and analysis on whether the export products infringe the intellectual property rights of the country; (2) It is not considered whether the export products should obtain the intellectual property rights of the target market countries and push the products into the international market; (3) Infringement does not respond in time. In the face of the 337 investigation, the reflection of Chinese enterprises is either because they are unwilling to respond to the law, or they give up the US market. (4) Infringement by others does not promptly initiate legal proceedings. A famous brand in Sichuan was squatted in Germany, and it was delayed to entrust a lawyer to raise an objection. Such a negative attitude often leads to the loss of intellectual property rights by missing the legal process.
Furthermore, LED companies should strengthen IPR risk prevention in market competition.
For domestic enterprises, whether it is export-oriented or domestic-selling enterprises, from technological development to the development of international and domestic markets, it is necessary to take reasonable measures to control intellectual property risks.
(1) Strengthen the prevention of intellectual property risks in technology development or introduction. The intellectual property risks that are easily caused by the enterprise technology R&D are mainly: the new products are not applied for patents in time; the new products fall into the scope of patent protection of others; the project personnel are leaked during the research and development process; the technology is disclosed by competitors or preemptively applied for patents, etc. . To effectively control these risks, IPR homework should be done in the R&D process, including: conducting patent-specific search and analysis before R&D, which can avoid repeated R&D and advanced technology. Most SMEs may not have their own patents. Database, but can rely on rich network resources or entrust external professional institutions to conduct appropriate patent searches, do technical intelligence investigation and collection work, on this basis can also predict the risk of infringement; do a good job of confidentiality control, prevent the development process leaks, timely Apply for patents on some research and development results, do a good job in patent deployment, and handle technical secrets for some technologies that are not suitable for disclosure.
(2) To develop the international market, it is necessary to achieve "the military and the horse have not moved, and the intellectual property rights first."
On the one hand, before the export of products, it is necessary to do a good job in the investigation and analysis of intellectual property rights in the target market countries to avoid infringement of the intellectual property rights According to the survey and analysis, the core patents of the LED industry are mainly concentrated in the hands of large companies in Japan, the United States and other countries, and more than half of the core patents are authorized in China. Therefore, Chinese enterprises have great intellectual property risks in both domestic sales and export sales. The United States, Japan and other countries have high levels of intellectual property protection and strict measures. Once they are touched, they will cause great harm to enterprises. Most enterprises are first repelled by high intellectual property rights. Carrying out patent literature search and analysis to avoid these patent risks is a homework for China's LED industry to enter the international market immediately.
On the other hand, it takes timely intellectual property protection for innovation results and strengthens the application for international patents. China's LED export-oriented enterprises, as practitioners of specific intellectual property strategies at the "tips", should be familiar with and use the rules of international intellectual property games. Applying for foreign patents through the PCT route and gradually accumulating patents can be said to be a key step in participating in international intellectual property competition. International applications are relatively expensive, but they are necessary for long-term market considerations. Products that are not protected by intellectual property rights enter the international market as if they are "recumbent" and will die.
(3) Establish regional industrial intellectual property alliances to improve the level of corporate intellectual property response through overall strength. In recent years, large international companies have combined technical standards with intellectual property protection to form a new form of technology monopoly - patent alliances, which means that members of the alliance transfer their patents to a common alliance for the purpose of cooperating with patents. Entity constitutes technical control of the entire industry. However, according to the actual situation of Chinese enterprises' patents and intellectual property rights, it may be difficult to establish a patent alliance in the industry. The National Semiconductor Lighting Engineering Industry Alliance has incorporated the patent strategic alliance and patent pool construction into the plan as early as 2007, but it has not been officially built. China's LED industry is currently mainly distributed in Shanghai, Nanchang, Xiamen, Dalian, Yangzhou, Shenzhen and Shijiazhuang. The regional concentration is obvious. It is more realistic and feasible to establish a regional industrial intellectual property alliance. Through the alliance, the number of patent applications will be increased, the cost of rights protection will be reduced, the vicious competition among alliance members will be reduced, the ability to respond to international litigation will be enhanced, and the true sense will be gradually established. Patent pool.
(4) Strengthen the construction of enterprise intellectual property management system and strategy formulation. The history of the development of Chinese enterprises is very short, but it has entered the international market very quickly, and the intellectual property legal system has been established late, but the protection standards are the same as in the world. Therefore, for Chinese enterprises that do not know how to use the intellectual property system to participate in market competition, it is particularly urgent and necessary to establish and improve the intellectual property management system as soon as possible and determine the intellectual property strategy for enterprise development.
The basic intellectual property management system of an enterprise includes: (1) the establishment and operation system of the intellectual property management department; (2) the intellectual property risk early warning management system; (3) the patent management system; (4) the trademark management system; (5) the copyright management system; and (6) the computer software management system; (7) Trade secret management system; (8) Enterprise intellectual property file management system.
As the only meaningful form of existence of the technological invention of the enterprise in the market economy, intellectual property is not only a simple legal right, but also a powerful means of defeating the competitors and competing for the market. Therefore, with the growth of China's LED enterprises and the acceleration of internationalization, in order to resist the patent competition from multinational companies, Chinese enterprises must establish awareness of intellectual property risk prevention, establish an effective management system, and skillfully formulate and apply patent strategies. And other intellectual property weapons, breaking through intellectual property thresholds and barriers in international trade.
Author: Deng Yao, male, 43 years old, Beijing, Guangzhou Branch cubic law firm partner, Senior Counsel, Department of Guangdong Province Lawyers Association, deputy director of the Professional Committee of intellectual property rights.
1) US International Trade Commission Investigation No. 337-TA-640
2) http://
3) Wang Liping's “337 investigation, “Damocles Sword” hanging above the top of the enterprise, “China Intellectual Property News” on January 4, 2007, reprinted at http://
4) US International Trade Commission Investigation No. 337-TA-640
5) US International Trade Commission Investigation No. 337-TA-674
6) http:// /t20091103_479990.html
7) "Panyu Daily" April 26, 2009 A2 Edition
8) http://?boardid=21&id=46885

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