Sound card infringement

In January, US based Intel filed a lawsuit against Shenzhen Dongjin, claiming 65.78 million yuan (US$7.96 million) compensation for patent infringement.

In the complaint, Intel claimed the DN sound card produced by Shenzhen Dongjin infringed its SR5.1.1 software and that Dongjin helped other users illegally acquire or breach the license.

Founded in 1993, Shenzhen Dongjin was the first enterprise in China to develop and research CTI (Computer Telephony Integration) parts. It is a prime competitor of Dialogic, a subsidiary of Intel which is also active in the CTI field.

Competitors see sense

In March, Chinese white-goods maker Hisense Group reached an agreement with German company Bosch-Siemens on their similar "HiSense" trademarks.

A joint statement by both companies said that following negotiations Bosch agreed to transfer its "HiSense" trademark, which is registered in Germany and other European countries, to the Hisense group.

Bosch agreed to withdraw its accusation against Hisense and the Chinese company agreed to withdraw its application to register the Bosch trademark in China.

According to the statement, China's Ministry of Commerce and the Association of China's Household Appliances played a crucial mediating role in the talks.

Hisense previously tried to buy the "HiSense" trademark held by Bosch-Siemens but the deal failed because they were not prepared to pay the German firm's asking price.

Manufacturers bite back

In June, two Chinese-based DVD manufacturers filed a lawsuit against the 3C Patent Group in the United States, alleging that it violated US laws, leading to unfair competition.

Wuxi Multimedia's suit against the 3C group, consisting of the Sony Corporation, Philips Electronics and the Pioneer Corporation, was backed by Orient Power(Wuxi) Technology, who levelled further complaints against LG Electronics.

The 3C group is a consortium owned by Sony, Philips and Pioneer that manages DVD patent rights. Patent fees of around US$20 per unit are currently levied on manufacturers of Chinese DVD players, accounting for some 20 to 30 per cent of their production costs.

However, US manufacturers' patent fees are much lower, only 3 to 5 per cent of production costs.

The high patent fees have hit Chinese DVD manufacturers hard, with exports of Chinese DVD players falling sharply.

Chinese chips

In June, Hisense Group unveiled its digital video media-processing chip, dubbed "the first China-made chip for colour TVs."

According to experts, the "Hiview" chip is a world leader in terms of structural design and key arithmetic design. It will be used in digital high-definition TVs and completely replacing current chips.

At the end of 2004, there were 68 colour TV manufacturers in China with an annual production capacity of 86.6 million TVs. China has become the world's biggest colour TV manufacture and seller. Before the "Hiview" chip, none of the millions of TVs annually produced had a "Chinese Chip."

Patent investigation

In July, the US International Trade Commission (ITC) voted to investigate possible patent infringement floor panels produced in China, Canada, and Malaysia.

The investigation is based on a complaint filed by Unilin Beheer B.V. of the Netherlands, Flooring Industries Ltd of Ireland, and US firm Unilin Flooring, on July 1, 2005. The complaint alleged violations of section 337 of the Tariff Act of 1930 in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain laminated floor panels that, the complaint alleges, infringe patents owned by Unilin Beheer B.V.

The complainants request that the ITC issue an exclusion order and cease and desist orders. Some 30 companies will be part of the ITC investigation, 16 of which are from china. The 16 companies account for more than 60 per cent of China's total wood floor production.

Top ten brands

In August, Britain's Financial Times newspaper concluded its worldwide readers survey of their top ten Chinese brands.

Haier, Lenovo and China Mobile filled the top three spots, followed by Tsingtao Brewery Group, Ping An Insurance, Bank of China, CCTV, Air China, Huawei and sohu.com and sina.com.cn. Lenovo is widely reckoned to have the potential to become the most globally well-known Chinese brand in the next 10 years.

The brands distinguish themselves from other Chinese brands in terms of reputation, consumer confidence, innovation capability, product and service quality, as well as by their management and operations.

Readers from 70 countries voted for 30 Chinese brands during the two-week survey.

Search engine sued

In September, the world's biggest music companies sued Baidu, a Chinese search engine, for infringing their copyright.

Universal, EMI, Warner, Sony BMG and their local subsidiaries, Cinepoly, Go East and Gold Label alleged that the search service made it easy for users to listen to and download illegal copies of their songs.

According to the allegations, Internet users could use Baidu's search engine to locate copies of music stored on the Web, even to the point of organizing songs into Top 10 lists by category. When a user clicks on a particular song, the engine provides a direct link to the url where the file is stored.

Since the search process is automatic, Baidu argues that it is simply providing the basic service offered by all search engines, and is not itself involved in any copyright infringement. In addition, it promises to remove the link if a company can prove it owns the right to a song.

Chery agreement

In November, the GM Daewoo auto technology company (GMDAT), GM and Chery reached agreement to end all disputes between them. All relevant lawsuits have been or will be withdrawn.

The lawsuit was initially filed last December by GMDAT, the Korean subsidiary of GM, accusing Chery of designing its QQ car on the lines of GM's Matiz compact car.

Chery denied the allegations, claiming it spent more than a year independently developing the QQ.

The Matiz was launched by GM in the South Korean market in 1998. Chery, based in eastern Anhui Province of China began manufacturing the QQ in 2002. Under a joint venture with Shanghai Automotive Industry Corp. (SAIC) and Wuling Motor Corp in the southern Guangxi Zhuang Autonomous Region, GM recommenced production of the Matiz at the end of 2004. Manufactured under license from Daewoo, the car was badged as the Chevrolet Spark.

QQ quandary

In November, Chery Automobile Co Ltd, one of the largest independent car makers in China, was hit with another intellectual property rights (IPR) dispute shortly after settling its case with General Motors (GM).

Tencent, China's largest instant message service operator, has alleged that Chery's trademark QQ, used in one of its best-selling models, infringes Tencent's instant messenger name.

Tencent QQ was China's first instant messenger. Launched and registered by Tencent in 1999, more than 400 million people have used the system.

Chery's QQ was launched in 2003. The compoany applied to the Trademark Bureau of the State Administration for Industry and Commerce for registration of the trademark the same year.

(China Daily 12/26/2005 page10)