Business / Technology

Tech companies 'should do more' against probe

By Ma Si (China Daily) Updated: 2016-05-10 09:44

Products at issue are portable devices such as smartphones, ITC says

A new probe into alleged patent violations by ZTE Corp and Lenovo Corp Ltd in the United States illustrates just how Chinese tech enterprises should do more to integrate patent protection measures within their overseas expansion plans, according to experts.

The comments came as the US International Trade Commission launched an investigation into the two companies over a patent infringement complaint filed by Singapore-based Creative Technology.

Lenovo told China Daily on Monday it is looking into the case but didn't have any further immediate comment. ZTE did not immediately respond to a request for comment.

Xing Houyuan, deputy director of the Chinese Academy of International Trade and Economic Cooperation, a think tank under the Ministry of Commerce, said the US is paying closer attention to Chinese enterprises, as the latter scramble to carve out a bigger international presence.

"The growing number of investigations into Chinese companies reflects the US is very concerned about China's trade surplus in technology-related products," said Xing.

Data from China Trade Remedy Information shows the US launched over 360 patent infringement probes, or so-called Section 337 investigations, between 2007 and March 2015, and of those 152 cases targeted Chinese companies.

"This time the case focuses on leading Chinese tech companies and I believe the Ministry of Commerce will give guidance on how to deal with it," Xing said.

The ITC said on its official website the products at issue in the latest investigation are "portable electronic devices, such as smartphones.

Respondents to the probe also include Samsung Electronics Co Ltd, LG Electronics Inc and several other major smartphone vendors. The complainant requested the ITC "issue a limited exclusion order and cease and desist orders".

Hao Junbo, a lawyer specializing in international lawsuits at Beijing-based Hao Law Firm, said it is important for Chinese companies to understand how to mount an effective defense at the ITC.

"Usually, it takes a long time and lots of money to defend such international cases. But instead of remaining silent, Chinese companies should move swiftly to voice their opinions and take action to protect their interests," Hao said.

The probe represents more bad news for Lenovo and ZTE, which have been wrestling with fierce competition at home and in the US.

But ZTE is not unfamiliar with Section 337 investigations. According to data complied by local newspaper Securities Daily, the company went through six ITC patent probes between 2011 and 2014. More importantly, it prevailed in four of them.

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