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EU Accuses China of 'Power Grab' Over Smartphone Technology Licensing (ft.com) 88

Posted by msmash from the closer-look dept.
The EU is taking China to the World Trade Organization for alleged patent infringements that are costing companies billions of euros, as part of what officials in Brussels claim is a "power grab" by Beijing [Editor's note: the link may be paywalled; alternative source] to set smartphone technology licensing rates. Financial Times reports: Businesses, including Sweden's Ericsson, Finland's Nokia and Sharp of Japan, have lost money after China's supreme court banned them from protecting their patents by securing licensing deals in foreign courts, the European Commission said. Chinese courts set licence fees at around half the market rate previously agreed between western technology providers and manufacturers such as Oppo, Xiaomi, ZTE and Huawei, it added.

The lower licensing fees set by Beijing deprive smartphone makers and other mobile telecommunications businesses of a crucial source of revenue to reinvest in research and development. "It is part of a global power grab by the Chinese government by legal means," said a European Commission official. "It is a means to push Europe out." Smartphone makers have agreed global standards for telecommunications networks. In return, technology manufacturers must license their patents to others. If they cannot agree on a price, they go to court to set it. Chinese courts generally set prices at half the level of those in the west, meaning their companies pay less for the technology from overseas providers. In August 2020, China's Supreme People's Court decided that Chinese courts can impose "anti-suit injunctions," which forbid a company taking a case to a court outside the country. Those that do are liable for a â147,000 daily fine and the judgments of courts elsewhere are ignored.
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EU Accuses China of 'Power Grab' Over Smartphone Technology Licensing More

EU Accuses China of 'Power Grab' Over Smartphone Technology Licensing

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  • when you make china your factory they take your ip (Score:5, Insightful)

    by Joe_Dragon ( 2206452 ) on Monday February 21, 2022 @05:03PM (#62290029)

    when you make china your factory they take your ip and the courts of china will be very pro china.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      when you make china your factory they take your ip and the courts of china will be very pro china.

      America First!!! What's the problem? ... None.
      China First!!! What's the problem? ... Weeell you see ...

      Either we all stop pisisng about and create a leve playing field or we continue this asinine pissing contest in which case everybody loses.

    • Re: (Score:2, Insightful)

      by Aubz ( 7986666 )
      It may surprise some people that Chinese courts have jurisdiction in China not EU courts nor US courts nor Australian courts etc. etc. etc. Don't like it then too bad, how sad.

    • Re: (Score:1)

      by Anonymous Coward

      when you make china your factory they take your ip and the courts of china will be very pro china.

      Dissemination of ideas is the natural order of things, and sharing should be encouraged. The thinking that one can own and monopolize ideas is the problem, and blaming another will not fix it. The US itself flourished in the absence of IP protection, and it is the pinnacle of hypocrisy to now decry China for "stealing our IPs". The west suffers from a dangerous delusion that they can outsource manufacturing for profit, and just collect monopoly rents in perpetuity. Not only have we lost manufacturing and ma

      • Re: (Score:2)

        by Viol8 ( 599362 )

        If no one can make a profit from spending time and money on inventing things or methods then no one will bother and progress stalls. Its this basic fact that lefty libertarians like you fail to understand.

        • Re: (Score:2)

          by hey! ( 33014 )

          Your theory is plausible, but can you find *historical* support for it? There is certainly evidence against it. During the Industrial revolution IP protection existed on paper but enforcement didn't cross borders and was notoriously weak in many countries, including the US.

          My suspicion is that the theory may neither be perfectly *true*, nor perfectly *untrue*. It is true to a degree, and that degree depends on situation.

  • They knew this would happen (Score:3)

    by hdyoung ( 5182939 ) on Monday February 21, 2022 @05:14PM (#62290051)
    You send your IP across the Chinese border, it's got a life expectancy of 24 months. If you keep it out of China, you can expect 3-5 years before it's stolen by hackers or reverse-engineered. After that, you just take them to international court and get the relevant firms banned in the West. The Chinese companies in question will do ok selling to the Chinese market and the poor countries that don't give a rats ass about IP, but they won't ever be top-tier.
    • If this is literally true then is 3-5 years of production an sales the natural term of a patent?

      If the patented tech has been popular enough to be reverse engineered by everyone + dog, and the patent holder has moved on to newer technologies, then what is the use of the next 20 years of patent "protection"?

      I ask the question with the understanding that some edge cases are indeed highly profitable even just in patent obeying countries for the full term of the patent, but that most probably are not.

      • Re: (Score:3)

        by rossz ( 67331 )

        Not all technology is obsolete in 5 years. Also, newer technology doesn't render the older stuff obsolete.

        • Re: (Score:1)

          by Anonymous Coward

          So ideas are deserving of a perpetual monopoly until obsolete? Should we still be paying royalties for the wheel? More often than not, ideas are not even unique; they are a natural combination of other ideas, that are obvious once preconditions are met. There are so few truly revolutionary ideas, that it is highly dubious whether granting monopolies on any of them is a net benefit to society.

          • Re: (Score:2)

            by rossz ( 67331 )

            Where did I even hint at the idea of perpetual patents? No where. I never made such a claim.

            The previous post was arguing that patents should only be 3 to 5 years. I simply pointed out that inventions, even when something better comes along, is still valuable. I didn't even get to the point about it typically taking several years to go from patent to production. A patent period that short would be useless.

      • Those are rough numbers. Yes, there are edge cases - I doubt China has the ability to steal top-level chip tech. Too advanced. (they might prove me wrong).

        Hm. 3-5 years might be the time required to steal/reverse-engineer most tech, but that doesn't make it the natural lifespan of a patent. Even after the tech is widely understood, most advanced countries will honor a patent period, allowing for the holder to be rewarded for their success at inventing something.

        • Re: (Score:2)

          by Luckyo ( 1726890 )

          China has no problems stealing current top level chip tech. They make great designs today. What they don't have is the ability to manufacture them, because of things that they can't yet manufacture.

          This lack is likely temporary, as we have seen in jet engines. Until very recently, they could make good jet engines, but their manufacturing capability meant that they were either matched on specs and couldn't survive for more than a handful of hours, or they could survive for a while but couldn't match performa

      • How long it takes before someone copies it depends very much on how valuable it is to copy it. If you're selling 100 million / year, people will be much more motivated than if you're selling thousands.

        It also depends on how we easily it's copied.

        How ask what's the point of the "additional 20+ years of patent protection". First, it's about 10-12 more years, not 20+. The term of a patent used to be 17 y ara after it's issued. That was changed to 20 years after the application is filed, which is roughly abou

    • Often you see Chinese knockoffs of stuff on Amazon within days of release, even when the original isn't made in China.

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      That isn't true and I have direct commercial experience to back it up. These days a lot of companies get stuff made in China, e.g. Apple, and the manufacturers of course make sure that their IP isn't stolen so that they keep getting business.

      It's rarely worth bothering to steal the IP anyway, because a lot of stuff doesn't work without firmware or backend services, and even if it did it's difficult to get it into the target market due to legal protections.

      Where it is useful is where you can copy specific pr

  • It's actually a simple game, if they do not play by the rules set forth then show them the logical end of what they have done. In this situation, the EU should do something absurd like say any any company from a country requiring technology transfers forfeits their right to legal recourse in the EU. This would mean that no patent by a Chinese company would be enforceable and people could steal their assets with impunity.

    If you don't punch a bully in the face then they won't stop picking on you.

    • Re: (Score:3, Insightful)

      by youngone ( 975102 )
      When China decided to open up to Western investment in the 1990's they were very clear about the rules, and they were also clear that they might change to rules at any time.
      The greedy capitalists who run the West saw a huge pool of cheap labour to exploit, and a potential new market to sell to, so they dived right in.
      Now they're reaping what they sowed.
      I'm not arguing that the EU should not push back, but let's not pretend any of this is a surprise to anyone.
      The only way to really reign in China is
      • Comment removed based on user account deletion
        • Some of those "rare earths" are not really that rare, and several of them used to be mined in the US.
          China used capitalism's oldest trick and lowered their price to make the competition go away.

        • BTW, there are certain less than common natural resources for which China is the primary producer, some of which are essential to industrial chip manufacturing.

          If you mean rare earths then I'll tell you this: they aren't rare. In fact, they can be had just about everywhere. The reason China is the primary producer is that they destroy their local ecology and sacrifice the health of their workers to extract it faster for less money... but it's only cheaper by a few pennies per kilo! Frankly, I think there should be a tax on everything made using materials that are extracted without regard to health, safety, or the environment.

        • Their base is probably not good enough to compete against the West on equal terms.
          However, in the Chinese market there are no equal terms.
          (Nor in the USA market, as Huawei found out).

      • Now they're reaping what they sowed.

        I'm fully aware of this and I have no pity for them.

        The only way to really reign in China is to stop doing business with them

        That's not true because all you need is an angle.
        For example, pass a law so that when a "technology transfer" occurs with another country then the technology itself becoming public domain in order to maintain a fair competition between nations. You would see companies immediately scale back their operations with China, ensuring to keep anything sensitive out of reach.

      • The only way to really reign in China is to

        ...be a high-ranking member of the party.

        You shouldn't use words and phrases you don't understand.

  • Cry me a river (Score:3)

    by peppepz ( 1311345 ) on Monday February 21, 2022 @07:23PM (#62290341)
    When unfair competition with Chinese sweatshops was causing factories all over the old world to shut down for good, we were told that it was progress, that blue collar workers should reinvent themselves as app programmers, and that workers' rights were a relic of communism anyway.

    Now that it's imaginary property that is being put in jeopardy, big companies recognize that there is a problem with unlimited globalization and cry for help. Well, quit whining and roll up your sleeves! Embrace competition!

  • ...best patent troll lawyers. Now China is eating our troll lunch.

    • I don't think you know what a "patent troll" is.

      • Re: (Score:1)

        by Tablizer ( 95088 )

        Patent trolls use a variety of tricks, some of them happened to be mentioned in TFA, like getting the trial to be in a "friendly" jurisdiction (location).

  • Back a decade the EU, US and a lot of other western nations planned to unite their market power so they could easily counter china and press their rights so things like that mentioned won't happen.

    The name of the project was TTIP. It was trumped.

    So the EU did it without the US. And because the EU outdwarved every other partner by a mile they simple dictated the rules. The whole western world has already joined. Well, except the US which has litterally no soft power at all against china. A market of 1,2 bill

  • Yet another discussion without Funny.

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