Tuesday, November 8, 2016

SEPs and NPEs in China

An article in today's Wall Street Journal and recent posts on the China IPR and IAM Blogs all discuss what the authors perceive to be a growing inclination on the part of some non-Chinese firms to litigate patent disputes in China.  The Wall Street Journal article, available here, is titled "China Reels in Patent Suits," and discusses among other things a lawsuit filed by Wireless Future Technologies Inc., a subsidiary of a Canadian NPE, WiLAN, Inc., against Sony in the Nanjing District Court.  The article states that the filing 
is an indication of how China is becoming a more attractive place to seek legal action for companies that accumulate patents for litigation and licensing purposes. In China, lawsuits are less time-consuming and less costly than in the U.S. and the country’s courts have developed rapidly over the past several years. If an injunction is granted in China, it wouldn’t only apply to products sold in the country using the patent in question, but also to the exports of such goods made in China, giving the plaintiff a possible bargaining tool for a licensing deal.
The post on the China IPR Blog (available here), titled "SEP Litigation and Licensing in China: Are There New Voices in the Room?", mentions various reasons that WiLAN may have chosen to file in Nanjing rather than in one of China's new special IP courts, among them the perception that that court may be inclined to award royalties rather than the comparatively low statutory damages that most frequently are awarded in Chinese patent litigation.  (For discussion of statutory damages in China on this blog, see, e.g., here, here, and here.)  The post also describes Qualcomm's filing of 17 complaints against smartphone manufacturer Meizu in China as "[o]ne of the more hopeful signs of faith in the Chinese legal system," and discusses Chinese firms' increasing participation in standard setting organizations and in initiating patent litigation in other countries.

Finally, the IAM post (available here or from a link on the China IPR post), titled "NPE assertion comes to China as WiLAN subsidiary files SEP suit against Sony in Nanjing - UPDATED," goes into somewhat more detail about the WiLAN lawsuit, stating that it's "the first SEP litigation initiated by a foreign NPE in China since big changes to the licensing environment resulting from regulatory probes of InterDigital and Qualcomm."

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