The revelation of the Millet patent: You know the patent war, maybe it's wrong.

The top 40 billion dollar valuation and BATM of the new crown of millet, is continuously exposed the patent risk of the yellow card. First, the local friends of ZTE, Huawei and other batches issued a large amount of legal letter to pay royalties, soon Ericsson in India put the risk of paper into a courtroom duel. The New Delhi court ban on millet mobile phone imports, forcing millet to seek reconciliation. So far, the court ban has not been completely lifted, but modified into a high pass chip of the millet mobile phone can temporarily enter. The handset patent war quickly becomes the media rush to report the hot.

But like Millet's internet thinking finally hit the patent wall, many of the pure Internet to interpret the traditional patent war itself is not correct posture.

Patent or a kill device but nothing to do with Qualcomm

Those who think that the NDRC's antitrust investigation into the telecoms patent giant is going to determine the results of the handset patent war in the domestic market is problematic.

Most people think that the reverse licensing clause in Qualcomm's patent license is the root of the millet patent crisis, antitrust investigations have led to the possibility that the special provisions of the "ban on the patent rights of high Qualcomm clients, which are not authorized by the high pass," are likely to expire, thus enabling ZTE and Huawei to emerge from their patents.

In fact, the antitrust investigation of Qualcomm is only the fuse, the invalidation of the reverse authorization clause does not need to apply the anti-monopoly law and the anti-monopoly law enforcement departments involved. The No. 329 article of the Contract Law expressly stipulates that "illegal monopoly technology, (a) the invalidity of technical contracts that impede technological progress or infringe upon the technological achievements of others"; The interpretation of the law on the application of technical contract disputes by the Supreme Court in 2004, article 10th explains further that the invalidity of the contract law includes "... The conditions for exchanging and improving the technology are not the same, including requiring one party to provide its own improved technology to the other party free of charge, non-reciprocal transfer to the other party, free monopoly or sharing the intellectual property of the improved technology. According to the above provisions, the reverse authorization clause is of course invalid, and the "void" in the contract law means to be from the beginning, the certainty, of course invalid. Invalid contracts have never been legally binding, the judicial or administrative procedures in the invalid cognizance is only the existence of their own invalid status to confirm it, not necessarily the court or law enforcement departments declared to be ineffective.

There are legal professionals who believe that Qualcomm has agreed to apply California law in a patent license agreement, and that the law of California as a Qualcomm headquarters in private international law can be agreed as a jurisdictional law. However, the 4th article of the law applicable to civil relations concerning foreign affairs of China stipulates that the law of the People's Republic of China has mandatory provisions on foreign-related civil relations. Direct application of the mandatory provisions ", the Supreme Court of the application of the law on the application of foreign-related civil relations in the interpretation of a number of issues (i) 10th of the provisions-" ... Involving the People's Republic of China social and public interests, parties can not be excluded by the agreement to apply ... (v) Other circumstances which are related to antitrust and anti-dumping and (vi) shall be deemed to be mandatory.

Therefore, the provisions of the contract void conditions are mandatory law, Qualcomm Patent licensing agreement to exclude the jurisdiction of Chinese law is invalid.

Patent war is not a sumo tournament.

The discussion of patent wars is at best the number of patents that companies have, and it seems that weight is the absolute standard for predicting victory or defeat.

First of all, many media take for granted the Huawei and ZTE two have 20,000 tons of authorized patents and millet barely reach the two-digit licensing invention patents, simple to get millet in the patent contest in the doomed conclusion. It is true that the quantity of millet patents cannot be matched to the Chinese cool Alliance, but there is a problem in the direct contrast between ZTE, Huawei and the main mobile terminals in the communications equipment/basic telecommunications sector. In Huawei, for example, terminal technology patents are mainly concentrated in Huawei terminals and Huawei Heiss, rather than the parent company Huawei Technology. Even if the contrast should be directly to the millet and Huawei Terminal + Huawei Heiss contrast, and should fully consider millet has a large number of not yet to the licensing stage of the potential of patent applications.

The number of patents is indeed an important lever to measure patent power, but the number one indicator is misguided. Patent quality is as important as the number of indicators, the lack of patent number can be relied on the basis of patents and improve the quality of the patent to make up. Microsoft won more than 3000 patents in 2010, and Apple received more than 500 patents, but the gap between Microsoft's and Apple's hardware and software in mobile terminals was reversed. This is not to belittle Microsoft's research and development capabilities and the meaning of the patent layout, but that Apple's grasp of the direction of technology development is far better than Microsoft, in touch, interaction and other decisions to determine the direction of the development of mobile terminal technology to seize the commanding heights. The technologically powerful Nortel Network, which holds more than 6000 patents, failed to sell its patents to the market and ended up in bankruptcy auctions. Kodak and Nokia, which hold 10,700 and 12,000 patents, are super large, unable to withstand the recession of the rain blow, forced to seek bankruptcy protection or spin-off auction self-help.

One of the big features of smartphone manufacturing is that it is highly technical, with a smartphone involving more than 200,000 patents. Another major feature of intelligent machine technology is the integration of technology and patent packaging, not only in the processor and operating systems and other basic technology areas without independent development and can be quickly cut through the purchase authorization, Qualcomm such a technology superpower even with its own technology can provide a complete machine for the third party. The patent of the intelligent machine mainly includes signal processing, chip and processor, operating system, hardware appearance, man-machine interaction, power management, panel and display, application software. In addition to Samsung can have a complete industrial chain from chip to panel, even Apple is only in the interactive and other technical areas of local leadership, the manufacturing side of the hidden advantage of supply chain management and the integration of different technologies. In fact, even Samsung in the Galaxy S4 and other high-end models have to rely on Qualcomm processors, the operating system has no choice to join the Android camp. So it is not only impossible but also unnecessary to rely solely on technology to conquer the world. In the subdivision technology area occupies the advantage, very good control technology supply chain is enough to remain invincible.

Patent litigation could be the ultimate killer.

Some senior IT people believe that only poorly developed companies will take patent litigation as a profit model, and that well-run companies will focus on development without pinning their hopes on patent lawsuits.

This point of view is close to the industrial operation. But the market competition and the legal competition are the parallel competition means, the case that the patent right is the effective means of cleaning up the market is many.

√ in the 1980 's patent litigation through a complete monopoly of imaging products market, nearly 1 billion of dollars of compensation has tumbled to the zenith of Kodak.

√ Yahoo's listing on Google's launch of the auction ranked advertising patent infringement lawsuit is also successful, Google was forced to the market value of nearly 300 million U.S. dollars at the price of 2.7 million shares at the cost of reconciliation with Yahoo.

In 2012, Apple launched a series of patent infringement lawsuits against Samsung that disrupted Samsung's normal planning in the U.S. market and won hundreds of millions of of billions of dollars in compensation from Samsung.

√ Apple's patent lawsuit against HTC pushed the defendant's market share down 60% during the lawsuit, and the sad HTC has not had a chance to roll over from the world's first-ever mobile phone market.

√ Ericsson v. Millet is not Ericsson in India's first lawsuit, Ericsson in 2011 and Nokia unanimously sued in the Indian smartphone market ranked first Gfive (Kivu), the rise of the Shenzhen Huaqiang north of the Kivus mobile phone war is not to resist.

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Patent litigation is likely to become a killer-level competition tool. ZTE, Huawei, the biggest difficulty in entering overseas markets is the patent, Ericsson has also in the British courts and Italy, Rome, Dusseldorf and Manheim court to bring the saturation of patent lawsuits, ZTE struggling several innings after a reasonable price and Ericsson reached a global settlement. The domestic big enterprise still does not rely on patent lawsuit to win more because China is still in the transition from the traditional labor-intensive manufacturing industry with the core competitiveness of cost control to the innovation-oriented manufacturing industry, even the Taiwanese manufacturing industry, which has much earlier market development, is still hovering in the foundry stage. It can be foreseen that the next stage of Chinese local enterprises is very likely to enter the rapid increase in patent litigation after the completion of the leap from cost to puzzle design.

Standard patent Love and worry

The competition of technical standard is one of the most intense competition in IT industry, the standard patent is the patent that covers technology of technical standard. Standard patents are generally not around the basic patent, control the standard patent is equal to control a technical field of development direction, other enterprises if they can not find new technology lines for the overall avoidance of the only way to use their own patent cross Licensing alliance or seek authorization. Owning standard patent theory can bring industry discourse power and important market interest to enterprise, but standard patent is a serious paradox in practice. Standard patents are too powerful to control the decision of the standard patent once abused can easily form a strong monopoly to hinder the development of the industry, so the national legislation and the judiciary are very concerned about and prudent control of the exercise of standard patent rights.

ISO and other global mainstream standardization organizations recommended and enforced in the organization of the Frand standards, the standard patent authorization must follow the Fair (fair), reasonable (reasonable) and non-discriminatory terms (non-discrimination) principle. Shenzhen in the first trial and the Guangdong High Court in 2014, the final maintenance of the Huawei v. IDC Company patent case directly applicable to the Frand principle that IDC to Huawei to obtain the licensing rate is too high, and in the form of a decision to determine IDC in China the standard necessary patent license rate is not more than 0.019%. The Court's attitude towards the standard patent in the case of Huawei V. IDC is not surprising. The Supreme Court as early as 2008 on Dijiang, Hui and Chaoyang Xing Connaught Co., Ltd. reply to the patent infringement dispute case ([2008], the third man and his word 4th) expressly states that "the patentee participates in the enactment of the Standard or, with its consent, the patent is incorporated into national, industry or local standards, As the patentee permits others to implement the patent at the same time as the implementation of the standard, the relevant conduct of others is not an infringement of the patent rights as stipulated in article 11th of the patent law. The patentee may require the implementing person to pay a certain user fee, but the amount to be paid should be significantly lower than the normal license usage fee. Although standard patents are often not one but a series of patents, a 0.019% per cent licence fee is clearly below the expectations of the obligee. From this point of view it seems to be possible to say that Huawei helped millet reduce concerns about standard patent infringement lawsuits.

Patent changes Internet thinking

Founded in 2010 to the newly completed new financing in the 40 billion dollar valuation, millet as a hardware enterprise created an unprecedented miracle. The LEI version of Internet thinking has provoked a huge controversy over the development model of the Internet industry and traditional it manufacturing. Professor Shanyou a "Huawei in the dilemma of the innovator and unaware of" the millet model as a measure of the development of it enterprises standards and models, triggering large-scale debate. Ren did not call the response of two words, the first "do not learn millet" is to say to the internal listen, the second sentence "The next 5-8 years, will explode a patent war, Huawei must be sober!" "is to say to millet listen." Patent disputes from the distant horizon to the tentacles, Ren's response is more like millet today encountered a patent bottleneck prediction.

Millet's success and setbacks are all in the Internet thinking. The essence of Internet thinking is the use of the Internet to solve the information asymmetry characteristics of the production chain to break down the downstream and different participants in the separation, the user-centric integration of the design, manufacture, sale and operation of the entire chain of dimensions. Millet mode to make full use of the Internet thinking in the pattern of a high priority in traditional industries, heavy reliance on the shortest time, the lowest cost, the best experience of fast moves to fully cut new products and new markets. Whether it is the millet copy the Air purifier dispute or LEI release to replicate 100 millet satellite, are typical of the dash dash and quick trial and error. Traditional manufacturing thinking emphasizes to win by thickness and intensity, while internet thinking emphasizes to win by business model and the most correct posture. Use the game analogy, the traditional enterprises will follow the rules of the clearance dozen strange, and the Internet companies will look for the abnormal combat.

I agree to some extent that internet thinking has a higher dimension than traditional thinking, and internet enterprises may have the advantage of implementing dimensionality reduction attacks on traditional enterprises. But for intelligent terminals, technology is always the bottom and fundamental, no matter what business model can only be temporary and can not avoid technology competition forever. The bonus of Internet thinking will also be exhausted, and the wonderful posture can not replace strength and thickness.

There is no exception to the fact that smart-phone manufacturing requires huge research and development inputs to ensure technological superiority. ZTE, Huawei, Lenovo, cool and Samsung account for more than 10% of revenues each year, and will inevitably pay a standard patent license fee of about 8% to 12% for Qualcomm, Ericsson or Nokia separately. Buying a patent also requires a huge price. Without mentioning the 4.5 billion of billions of dollars sold before the bankruptcy of Nortel, domestic companies also have many cases of high-priced acquisition technology. Tcl pioneered an overseas acquisition of Alcatel-covered mobile phone business, with Lenovo acquiring IBM desktops and notebooks and a motorcycle mobile phone business that contains a large amount of patent transfers and licenses, and in 2014 spent $100 million on an average of $5 million per patent to buy unwired Planet 21 patents. If the patent is the Pharaoh curse, then the answer is only a word, do not sow the harvest. Unless we use other people's technology, whether it is in India to Ericsson or China to Huawei and ZTE, millet payment patent licensing fee is as normal as we pay utilities.

Solution of the dilemma

Lei has a very good ability to foresee, as early as two years ago openly said that the patent will become the biggest obstacle to the overseas millet. Patents cannot be accumulated in the short term, even though Huawei and ZTE have had an extremely rich experience in communication equipment manufacturing prior to landing mobile terminals, and it has taken more than 5 years to complete the smooth transfer of technology and manufacturing. Millet for the treatment of adolescent patent troubles urgent need to strive for more time, in strong and weak contrast, unless the outbreak of mega-volume of mergers and acquisitions otherwise can only rely on integrated traditional Chinese and Western medicine, in addition to 1.1 points of good offices can not exchange for time chips.

Millet has announced a sudden jump to the patent application KPI to 3000 a year, but the water does not save near thirst, must be stronger to promote the share of Chi-gu linkage, Rui Chuang Fund, Pine Cone electronics and other intellectual property operators to buy and develop a large number of patents, and through cooperation, authorization, negotiation among the major patent giants to find allies, Hong.

It is worth a look is how millet adjust their own patent ideas and in the inevitable excavation of the tide of people to optimize the IP talent structure. Millet Patent Director Zhang and intellectual property director Xu Wei exclusively is the patent background, one of the founder of Wisdom Valley Lin Peng is also a patent origin, it can be seen that millet is attached importance to the patent. But compared to the Chinese Cool Alliance is the global vice President-level VP responsible for intellectual property rights, Millet's patent administrator level has yet to be upgraded, which is also a further recognition of the importance of patents.

Another problem is that Millet's patent owners are basically government departments (State bureau), patent operating entities (Honestar), law firms and short-term foreign companies, central enterprises experience, and not too much experience in the landing. Preliminary view of the structure of Millet patent application, the basic communication technology only 10%, it is difficult to support long-term development of enterprises. Lenovo to Lei in this year NPC proposed three points are all around the conversion and operation of patents, it seems that millet's understanding of the patent value is more from the investment and operational perspective and not the product manufacturing needs of technical protection.

The most important reason for the success of patent management is the deep technical and industrial background of the patent management, and a thorough understanding of the enterprise, the industry and the development of the technology. The patent talents of these enterprises come from the Foxconn/Hon Hai Department, and have very good industrial experience, writing ability and technology accumulation. Millet really to the enterprise's patent policy to take root, the concept of change and upgrade may also be a key.