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.

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  • icon
    Binko Barnes (profile), 20 Oct 2014 @ 11:41am

    The great economic and political delusion of the 21st century is that we will shift most of the world's manufacturing to china allowing them to grow an immensely strong and powerful economy and then they will play by all the rules that western societies have built up over the centuries.

    reply to this | link to this | view in chronology ]

  • icon
    Mason Wheeler (profile), 20 Oct 2014 @ 11:50am

    So basically the Chinese government just set up their own version of Intellectual Ventures?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Oct 2014 @ 12:06pm

    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."

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Oct 2014 @ 12:15pm

    Damn those Chinese for copying our trolling techniques!

    reply to this | link to this | view in chronology ]

    • identicon
      Misha Springfield, 20 Oct 2014 @ 8:45pm

      Response to: Anonymous Coward on Oct 20th, 2014 @ 12:15pm

      It's unfortunate that Intellectual Ventures et al took what many online commenters suggested as a joke and didn't opt to patent the process of patent trolling when they had the chance. You reap what you sow.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Oct 2014 @ 12:21pm

    I love it , Maybe we'll see Patent Wars I hope copyright wars will follow ...soon, maybe ..just maybe, they'll sue each other out of existence.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 Oct 2014 @ 4:31pm

      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.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 21 Oct 2014 @ 6:52am

        Re: Re:

        Don't like lead in your toys? Well any ban prohibiting a Chinese manufacturer from selling us products potentially containing lead until they can reasonably show the problem has been fixed will be subject to these disputes because they could cause irreparable harm to the business.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Oct 2014 @ 12:31pm

    The best way to induce change in the patent system is to get another country to beat us at the game?

    Woah woah woah woah now, what do you mean the US is infringing on all of China's patents? We can't have that going on then.

    reply to this | link to this | view in chronology ]

  • icon
    william (profile), 20 Oct 2014 @ 12:41pm

    I think this could be a blessing in disguise.

    Maybe, just maybe when the Chinese government is at your door with a ram, ready to bust it open, meaningful changes to the law will be made.

    One can only hope.

    reply to this | link to this | view in chronology ]

  • identicon
    SJ, 20 Oct 2014 @ 1:32pm

    @william

    There one problem regarding meaningful changes. The US has imposed that total perverted patent system on a lot of other countries through international treaties... even if the US wants to change it, they simply can't (do it easily).

    reply to this | link to this | view in chronology ]

  • icon
    wereisjessicahyde (profile), 20 Oct 2014 @ 1:32pm

    What goes around, comes around.

    reply to this | link to this | view in chronology ]

  • identicon
    Shmerl, 20 Oct 2014 @ 1:33pm

    It can be useful

    May be for once it will clear the mind of politicians who are too weak to make a useful patent reform.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Oct 2014 @ 3:05pm

    I can only laugh

    Maybe we'll get saner patent legislation when the big players are being eaten alive via their own bullying tactics.

    reply to this | link to this | view in chronology ]

  • icon
    pouar (profile), 20 Oct 2014 @ 3:10pm

    the phrase "Karma Bloody Karma" comes to mind

    reply to this | link to this | view in chronology ]

  • identicon
    Paraquat, 20 Oct 2014 @ 8:38pm

    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.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 21 Oct 2014 @ 7:00am

      Re: TPP

      I think what may happen is that US courts would declare many Chinese patents invalid if they attempt to enforce them. The Chinese government would retaliate by declaring US patents invalid. The losers would be the smaller and weaker countries without the strength to stand up for themselves.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 21 Oct 2014 @ 12:39am

    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?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 21 Oct 2014 @ 1:13am

    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!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 21 Oct 2014 @ 1:41am

    Yes, let's all fear the long history of Chinese inventions.

    Let's start with... um well... wait, uh... maybe you can go first here? Please?

    reply to this | link to this | view in chronology ]

  • identicon
    Alexa Jackson, 21 Oct 2014 @ 8:25pm

    China becoming an innovative country probably would start a patent war but maybe this will also encourage Western countries to push further more when it comes to innovations. A blessing in disguise indeed.

    reply to this | link to this | view in chronology ]


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