With the country increasingly emerging as a global innovation centre, observers predict Chinese companies and courts will seek to exert greater influence in the IP domain 

By Jake Schindler 

This week IAM hosted the SEP Summit Asia in Hong Kong, convening dealmakers from around the world for two days of focused discussion on FRAND matters. 

For Sisvel’s Hong Kong-based team, it was great to welcome so many colleagues to our city for this event, whether they took the train down from Shenzhen or flew halfway across the globe. Here are a few of the big takeaways. 

China’s growing influence 

Heavy US tariffs against China formed the backdrop for this global meeting of technology and IP experts but went largely unremarked upon on stage. Things feel very different to the first iteration of this trade conflict eight years ago. This time around, there is a clear sense of confidence that the country has the credentials to set the agenda for innovation and IP on a global level. 

“China is becoming the most influential IP system in the world,” said Huawei IP chief Alan Fan. Companies and courts are becoming more active, he continued, thanks in part to clear signals from the top. President Xi Jinping, Fan stated, has been very clear about making a commitment to innovation and IP protection. 

Huawei head of IP Alan Fan addresses SEP Summit Asia 

A combination of factors is behind China growing importance to global IP. The size of the market and the nation’s role as the global factory floor have always made it an important jurisdiction. But Fan said it’s China’s increasing role as innovation centre for the world that is now the crucial driver of events. There are simply too many engineers in China for it to be otherwise, Fan remarked. 

There was significant discussion on whether all this means a Chinese system that’s more patent licensor-friendly, as recounted in IAM’s write-up of the event’s first day. 

Inside Huawei 

Huawei is probably the most prominent example of a company that’s a major SEP owner and licensor while also churning out millions of end-consumer devices. Alan Fan pulled back the curtain on how the company’s IP operations are structured to ensure that these two aspects of the business are not working at cross-purposes. 

Out-licensing is handled by regional departments, which allows dealmakers to meet face-to-face with licensees and understand the commercial context in which they are operating. 

Then there is what Huawei calls its technical IP department. This group is headquartered in Shenzhen and sits closer to the internal customers – various product lines and business units within the Huawei group. 

On any given licensing deal, both the regional and the central teams are consulted on the terms.  

With over 300 people managing 150,000+ patents, Fan admitted things can be “chaotic” at times. There is constant change, and the team is under permanent pressure. External help is a key enabler in areas including patent drafting, litigation and licensing. 

It was great to hear Fan make the case for the patent pool model on the grounds that it is aligned with the needs and goals of global standards-setting. 

When you do things alone you can move fast; doing things with others takes longer. But there is value, Fan said, in working with a group of patent owners that are all innovation leaders to create licensing programmes that will stand the test of time.  

Standards development takes place over extended timeframes, Fan explained, so it’s crucial that it be supported by licensing programmes with a long-term focus. We have all seen companies start bilateral licensing projects with much fanfare, he said, only to have them fizzle out within a couple of years. Huawei therefore sees long-term return from licensing as a necessary condition to facilitate the evolution of open standards.  

IoT awareness 

The IoT raises significant patent issues, particularly in areas where licensing practice is not yet well-developed. 

Claudia Zhang, Senior Patent Licensing Manager at ZTE, said that it’s not a zero-sum game. ZTE, which participates in Sisvel Cellular IoT, has a mission to build the communications highway that connects everything. It’s critical, Zhang said, that the company makes returns on its investments. But it enters communications with IoT stakeholders without preconceived notions, she said. 

Gustavo Hirsch of Daniel Law talked about the importance of educating OEMs about IP risks they may not be aware of. This is music to our ears. He also warned device manufacturers that rely on indemnities to read the fine print and try to ensure that all the relevant licences have indeed been taken by suppliers. This is a critical issue that Sisvel Insights recently covered in a two-part article series. (Part One | Part Two) 

IoT will be the major theme at the upcoming LES International annual conference in Singapore, so expect these discussions to continue. 

Pools in focus 

Amid much discussion of China exerting more global influence, Haining Song, a partner with implementer-side firm Han Kun Law Offices, pointed to jurisdictional issues around patent pools as one area where the country appears to be going its own way. 

He was speaking mainly about the 2024 TCL v Access Advance case in which the Supreme People’s Court affirmed Chinese courts’ jurisdiction over antitrust and global rate-setting claims against the pool administrator. The dispute between the parties was settled. This is notably different from the more recent Tesla v Avanci et al decision out of the UK, in which the court dismissed a global rate-setting claim against the licensing platform operator. 

Song also raised the question of whether Chinese courts might adopt the ‘interim licence’ remedy that has featured in two recent high-profile UK cases. He walked through the Chinese framework for ‘behavioural preservation’ orders and explained that an innovative judge or court in China could use this method to enact an interim licence. 

Notably, Song was not the only speaker of the day who speculated that 2025 will see new opportunities for Chinese courts to explore these principles in actual cases. The SEP market will be watching very closely if that does come to pass. 

Jake Schindler is Senior Content and Strategic Communications Manager at Sisvel 

_{This article was prepared by him in a personal capacity. The opinions expressed within it are the author’s own and do not necessarily reflect the views of Sisvel. The content is for informational purposes and should not be taken as legal advice.}