Chinese State Patent Troll Absorbed By Smartphone Maker Xiaomi, Adding To Its Patent Hoard

from the but-will-it-come-in-peace? dept

A couple of years ago, we wrote about Ruichuan IPR Funds, which seemed to be a rather odd kind of patent troll — one that was essentially backed by the Chinese government. Since then, Ruichuan has dropped off the radar in the West, but there have been some important changes in its home country, as reported on the IAM blog:

China’s first patent fund is now being run as part of the Xiaomi IP function, IAM can exclusively reveal. When last we reported on the Ruichuan IPR Funds its status was somewhat unclear. The fund’s operator, an IP services firm called Zhigu, had apparently been merged with the smartphone company’s in-house IP department, but there had been no official word on the move.

Techdirt wrote about Xiaomi — sometimes called “China’s Apple” — last year. Although it has lost some of its initial shine, it’s still a top Chinese company, and one that has global ambitions. As Techdirt readers know only too well, to stand a chance in the West’s patent-saturated tech markets, new entrants need a patent portfolio to use as a bargaining counter, and Xiaomi has been busy acquiring one. In June of this year, Bloomberg reported the following:

Xiaomi Corp. bought nearly 1,500 technology patents from Microsoft Corp. in a deal that may smooth potential legal tangles over intellectual property as it pushes beyond China.

The patents cover a range of wireless communications, video, cloud and multimedia technologies, spokeswoman Kaylene Hong said. The acquisition came as part of a broader agreement announced Wednesday with the U.S. software giant, under which Microsoft Office and Skype will come pre-installed on the Chinese smartphone maker devices.

The absorption of Ruichuan IPR Funds by Xiaomi — which must have taken place with the Chinese government’s approval — is clearly part of the same strategy of bulking up in the patent department as it prepares to expand abroad. The big question is whether Xiaomi is planning to use its new portfolio purely defensively, so that it can sign cross-licensing deals, or whether it will start going on the offense and sue Western companies in their home markets too.

Follow me @glynmoody on Twitter or, and +glynmoody on Google+

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Companies: ruichuan ipr funds, xiaomi

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Comments on “Chinese State Patent Troll Absorbed By Smartphone Maker Xiaomi, Adding To Its Patent Hoard”

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Whatever (profile) says:

Xiaomi makes some pretty incredible products and stunning prices, and they have been quickly snapping up market share in Asia with their products. They are a serious competitor that is giving Samsung some serious concerns and may replace Apple as the desired product in the market (especially with the new Apple phones being, well, not all that anymore).

They look like they are ready for a patent war, and with the backing of the Chinese governement, they may yet win. Apple can attack them in the US, but the Chinese government can easily pull the plug on Apple’s distribution in China overnight without notice. Apple would be bringing a lawyer to a gunfight, and lawyers tend to get knocked off first!

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