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In the past years, Chinese high-tech companies have been purchasing vast amounts of patents showing their maturity to go global. Many argue it’s not a commercial predation strategy, but rather a mere adoption of commercial rules to play in global technology markets.

Analysts have pointed out that for Chinese companies aiming to conquer foreign markets leadership; they have to be backed with patent “stocks” in case of infringement allegations.

Although one of the main reasons to purchase intellectual property rights (IPRs) is exactly to confront with patent wars, there’s another way through which Chinese technology companies are coming into possession of strategic patents: mergers and acquisitions.

This mean allows absorbing and taking advantage of the other party’s portfolio producing the same effects of a patent purchase.

It’s necessary to highlight that this phenomenon is not circumscribed to a Chinese trend, but the raise of these companies in international markets make patent disputes potentially more mischievous. Luckily this trend is not exclusively bound to patent trolling; indeed, it also multiplies the chances ofcooperation and cross-licensing - technology pooling arrangements in which participating firms grant licenses to one another.

Nevertheless it’s undeniable that the most controversial aspect of large-scale patent purchases remains the extent to which patent law provides competitive gains in the courtroom instead of merely protect IPRs violated by unfair competition. Indeed it’s no surprise that many tech giants strategically exploit legal battles to stop or simply slow down competitors, turning bulk patent purchase into effective weapons.

Apparently, this is not the case: rather than challenging global tech giants, Chinese companies are only adopting a prudential approach to realize their objectives of global expansion by playing with already set international commercial rules.


The gLAWcal Team

LIBEAC project

Friday, 10 October 2014

(Source: CKGSB Knowledge)

This news has been realized by gLAWcal—Global Law Initiatives for Sustainable Development in collaboration with the University Institute of European Studies (IUSE) in Turin, Italy and the University of Piemonte Orientale, Novara, Italy which are both beneficiaries of the European Union Research Executive Agency IRSES Project “Liberalism in Between Europe And China” (LIBEAC) coordinated by Aix-Marseille University (CEPERC). This work has been realized in the framework of Workpackages 4, coordinated by University Institute of European Studies (IUSE) in Turin, Italy.