Tech firms 'should do more' to fight probe

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

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

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 May 9 only that it is looking into the case. ZTE did not 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, says the US is paying close attention to Chinese enterprises as they 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," Xing says.

Data from China Trade Remedy Information shows the US launched more than 360 patent infringement probes, or so-called Section 337 investigations, between 2007 and March last year. Of those, 152 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 says.

The ITC says on its website that the products at the center of the latest investigation are portable electronic devices, such as smartphones.

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

Hao Junbo, an attorney with Hao Law Firm in Beijing who specializes in international lawsuits, says 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 says.

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

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

masi@chinadaily.com.cn

(China Daily Africa Weekly 05/13/2016 page29)