Rights protection plan aids global expansion

When a delegation from Nuctech flew to Singapore to participate in a project bid eight years ago, they never expected to be hit with bad news as soon as the plane landed - a European competitor had filed a lawsuit claiming Nuctech's product for the bid violated its patents, thus trying to keep it out of the Singaporean market.

These days, such a patent dispute would not leave the delegation scrambling, for Nuctech has learned to deal with many intellectual property "traps" during the past decade, including antidumping duty and countervailing duty investigations and US patent interference proceedings, the company said.

Nuctech, based in Beijing, is a world-leading security inspection equipment and service provider. Founded in 1997, the company was often questioned by overseas customers in its early days about its capacity for innovation.

In 2001, for example, the company introduced its two mobile large container inspection systems to the Turkish market, but prospective customers doubted a Chinese company could create such advanced products. Those doubts were put to rest when the customers visited Nuctech's research and production base.

"As Chinese companies continue to grow, some developed countries are increasingly using the IP and international trade rules to fight us," said Chen Wei, vice-president of the company, who is primarily in charge of the IP sector.

"During the process, Nuctech has gradually transferred the focus of its IP strategy from the protection of market operations to the promotion of corporate innovation and business development," Chen told Intellectual Property News.

He said the patent lawsuit in 2007 finally ended with a victory for Nuctech, as the company had already conducted comprehensive analysis of potential local patent infringement risks before it decided to enter the Singaporean market.

"We also won the bid, which gave us more confidence to further expand the product's overseas markets," Chen added.

Overseas IP pre-warning analysis is part of the efforts Nuctech has made to continuously strengthen its patent layouts in international operations.

"The company has world-leading core technologies in the industry, and its scanners and monitoring machines have been sold to more than 130 countries and regions, with overseas sales revenue accounting for over 70 percent of the company's total. In addition, its major foreign rivals, who are concentrated in the United States and Europe, are adept at operating and managing IP rights," Chen said.

These factors required that Nuctech formulate a comprehensive and effective IP strategy to deal with such challenges and gain a competitive edge amid fierce global competition, he added.

In recent years, the local IP agencies have become mandatory destinations for Nuctech's senior managers when they conduct investigations abroad. The company has also sent several IP managers to intern at overseas patent offices and agencies to gain experience, and thus help improve the quality and management capacity of its overseas patents.

Years of efforts have helped Nuctech win many IP lawsuits during its "going global" process.

In August 2011, for instance, the United States Patent and Trademark Office found that a patent application from a British research institute was similar to a Nuctech US patent.

To solve the problem, the US patent authorities applied the so-called interference proceeding, a system used in US patent law, to determine which applicant was the first to invent.

At the time, the US still used the first-to-invent system, which meant companies or individuals who were the first to invent the technology owned the patent rights.

"The patent involved was a very important one, so losing it would have caused a huge negative impact to the company in terms of internationalization," Chen said.

Thanks to its strong international patent layout and appropriate measures, Nuctech succeeded in maintaining the patent rights in 2012, after investing financial resources and many hours of manpower into gathering evidence.

haonan@chinadaily.com.cn

(China Daily 08/26/2015 page17)