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As far as the development cutting-edge technology in the field of telecom is concerned, two of Chinas top telecommunications equipment makers, Huawei Technologies Co Ltd and ZTE Corp, have stolen a march on their rivals both in traditional network gear and, increasingly, in high-end phones. According to World Intellectual Property Organization, ZTE was the second highest filer of international patent applications last year. The company made 1,863 different filings. The fourth most active filer was Huawei with 1,528 applications.
Patent filings have been soaring across most sectors in China. Only last year, there were 313,854 patents registered in the country, a 12 percent rise from 2009. In 2010, China was the third highest filer of patents in the world. Japan with 337,497 patents filed was at number one, and USA with 326,945 patents was at number two. For the past decade, Japan has been the leading patent filer, but since 2006, its lead has narrowed down by 12 percent. On the other hand, China is up by 83 percent.
Much of the patent related action in China is due to large telecom firms. As ZTE and Huawei, along with Taiwan's HTC, move from being contract manufacturers for big foreign firms to making smart phones and tablets under their own brands, they use patents to protect the knowledge and ideas that they have picked up from contract manufacturers.
Until recently, China was still trying to enforce the system of intellectual property (IP) rights. But the generation of large number of patents led to a boom in the business of patent lawyers in the country. An IP partner in an international law firm in China can now expect to earn around $1 million to $2 million depending on how well their firm does that year. Partners in some Chinese firms are likely to earn even more.
Litigations are also on rise due to the surge in the size of patent portfolios. In April this year, ZTE filed a lawsuit in China against Huawei claming that Huawei had infringed on its fourth generation technology. This move by ZTE came a day after Huawei sued ZTE in several European countries saying its rival had infringed on a series of its patents. Such lawsuits between companies of Chinese origin is hardly surprising given the fact that their foreign counterparts such as Apple, Google and Samsung are all trying to use an armoury of patents to stifle competition in the global smartphone industry.
The influx of patents in China underscores the countrys growing strength in the telecom sector. It also reveals a change in attitude of the political and business elite of the country, on the issue of intellectual property. According to the countrys Supreme People's Court, the number of intellectual property related litigations have risen by 37 percent to 41,718 last year. Chinas communist regime has set for itself an ambitious target of making the country a high-tech powerhouse, whose 2.5 percent of gross domestic product will from research and development by 2020.
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