China Turns From 'Pirate' Nation To Giant Patent Troll

from the what-goes-around,-comes-around dept

The West’s constant push for stronger patent protection in agreements like TPP and ACTA is based on the belief that they will then be able to deploy their supercharged patents against the rising economic might of China. What this completely overlooks is the fact that China will be able to turn the self-same strengthened patent regime against the West by acquiring patents and suing Western companies. Techdirt has already reported on how China is providing financial incentives for its companies to file huge numbers of patents overseas. Now it has taken another step in bolstering its patents strategy against the West by setting up a company called Ruichuan IPR Funds. Here’s a press release that the site Citizen Outreach has issued on this move:

With China’s creation of Ruichuan IPR Funds, imagine the assault that U.S. companies will face. Reports are that this government-sponsored troll has been seeded with $50 billion to acquire patents that will be used in actions against U.S. companies. Inasmuch as trolls aren’t sticklers for the quality of the patents they purchase, Ruichuan IPR Funds will be able to build a massive arsenal for use in harassment litigation.

China will now be in a better position to manipulate markets, handicap the overseas competition, and push itself to the head of the pack in the global patent wars.

A little hyperbolic perhaps, but essentially correct — and completely foreseeable. The Chinese government’s move is part of a larger story that recapitulates America’s own evolution from a “pirate” nation that fuelled its industrial revolution by ignoring the law and appropriating Western Europe’s patented ideas, to one using the same legal instruments against European companies.

Follow me @glynmoody on Twitter or identi.ca, and +glynmoody on Google+

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Comments on “China Turns From 'Pirate' Nation To Giant Patent Troll”

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33 Comments
Anonymous Coward says:

Maybe it was the belief that just because the United States has the lion’s share of the world’s lawyers, that it will be the country dominating the international patent-troll game.

Of course lawyers are just hired guns, and will be more than willing to take China’s money to submit frivolous patents and file extortionary lawsuits. It’s “the American Way.”

Anonymous Coward says:

Re: Re:

The scary bit is to follow.

You know the part where private corporations can sue a government for damages regarding rejected patents etc? And how the US is trying to get that into all treaties?

Imagine a world where China owns patents involved in just about everything. One of their private corporations then has the power to overrule pretty much any other country on the planet on pretty much any topic.

Don’t like melamine in your baby formula? Well, the FDA can’t do a thing about it, because preventing China from selling their patented melamine-included baby formula in the US would cause irreparable harm to their private corporation that specializes in developing and producing the formula.

Think about it.

Paraquat says:

TPP

This is why China was not invited into the TPP negotiations. The USA knows that China is one country that will push back when absurd US laws are extended overseas via the TPP. Better to sign up some country like Chile or New Zealand that can be pushed around.

So go China – troll away! But please file all your ridiculous patent claims against US companies, while sparring those smaller countries from grief. If China does this, they’d be doing the world a favor, even if few yet realize it.

Anonymous Coward says:

maybe china will do the us a favor,
SHOW the us government software patents are useless.
And they just encourage legal extortion via patent trolling.
They do nothing to help innovation or grow the economy .
And china was the country that forced microsoft to publish its android patents which will allow other
mobile phone companys to work around them or to challenge them in court .

Maybe china is not stupid enough to
adopt stupid us laws on patents ,corporate
whistleblowers ,
which only help large companys or encourage patent trolling and increase drug prices .
What other large country seeks to force other countrys to adopt its laws ,apart from the us?

Anonymous Coward says:

Just to make sure I’ve got the general idea of how the USG has been helping out over the past decade or two…

Our patent system could wind up letting China hold US based R&D hostage through patents held on component technology.

Any US-developed tech that happens to escape China’s control won’t be trusted by anyone anyway, thanks to the NSA’s collect-it-all overreach.

Even something novel and secure could result in massive lawsuits by corporations based in friendly nations via ISDS, if it could potentially harm their future profits in some tangential way.

Yay, progress!

John Fenderson (profile) says:

Re: Re: Re: Re:

I’m not sure what makes a society an “inventive” one, but I do find it interesting that there’s quite a lot of talk in business journals lately about how China is becoming an “innovation powerhouse.”

http://www.foreignpolicy.com/articles/2014/02/06/its_official_china_is_becoming_a_new_innovation_powerhouse
http://online.wsj.com/articles/SB10001424052702303819704579320544231396168

I’m not commenting on whether or not that characterization is accurate (I have no way of knowing), but there does seem to be a lot of people who disagree with the notion that nothing innovative comes from China.

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