{"id":2228,"date":"2025-04-01T10:02:32","date_gmt":"2025-04-01T10:02:32","guid":{"rendered":"https:\/\/ipfray.com\/?p=2228"},"modified":"2025-04-01T10:02:34","modified_gmt":"2025-04-01T10:02:34","slug":"significant-progress-made-in-40-years-since-chinas-patent-law-enacted-but-ip-units-still-treated-as-cost-centres-says-changhong-ip-head-dejian-dai","status":"publish","type":"post","link":"https:\/\/ipfray.com\/staging1\/significant-progress-made-in-40-years-since-chinas-patent-law-enacted-but-ip-units-still-treated-as-cost-centres-says-changhong-ip-head-dejian-dai\/","title":{"rendered":"Significant progress made in 40 years since China\u2019s patent law enacted, but IP units still treated as cost centres, says Changhong IP head Dejian Dai"},"content":{"rendered":"\n<p>Founded in 1958, Sichuan Changhong Electric (Changhong) is a major Chinese consumer electronics manufacturer. Its 20-person IP team sits within the research and development unit, with a chief focus on patents, and is headed up by Dejian Dai. Appointed acting IP director over 22 years ago, Mr. Dai initially started at the company as a technical engineer and, after getting an MBA, he took over project management for the company\u2019s mobile phones.&nbsp;<\/p>\n\n\n\n<p>\u201cI fell into the IPR role by accident,\u201d Mr. Dai says, during an interview with <strong>ip fray<\/strong> at the Via Licensing Alliance Business Summit in Shanghai last month. \u201cAnd now I\u2019ve been \u2018acting\u2019 IP head for over two decades,\u201d he laughs.<\/p>\n\n\n\n<p>Mr. Dai sat down to discuss some of the licensee\u2019s biggest wins and losses, how China\u2019s role on the IP stage has grown so much but why it still has so far to go, and the emerging technologies that it is eying (and is hoping patent pool administrators are eying too).<\/p>\n\n\n\n<p>Today marks 40 years since the Patent Law of the People&#8217;s Republic of China came into force. Since April 1, 1985, companies have completely revolutionized their perception of patents and this has also shifted the power in negotiations for many of those businesses. But even when Mr. Dai started his role, there were \u201calmost no patent experts in the company\u201d, he says. It was only when China became a member of the World Trade Organization and foreign firms began setting up shop in Shanghai, Beijing and other major Chinese cities that this shift really flourished. He notes:<\/p>\n\n\n\n<p>\u201cI learned a lot from them, as well as foreign patent owners. I needed to. Only a handful of Chinese universities had IP-focused courses.\u201d<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">U.S. and European victories<\/h4>\n\n\n\n<p>To say Mr. Dai was thrown into the deep end right from the start of his IP leadership role would be an understatement. In fact, he says, one of his biggest achievements was also one of his biggest challenges: a United States International Trade Commission (USITC, or just ITC) investigation initiated by U.S.-based battery manufacturer Energizer in 2003 (<a href=\"https:\/\/www.usitc.gov\/press_room\/news_release\/2003\/er0528aa1.htm\">May 28, 2003 ITC press release<\/a>).<\/p>\n\n\n\n<p>Energizer accused Changhong and at least nine other Chinese consumer electronics manufacturers of infringing several alkaline battery-related patents. After the ITC issued a decision in favor of Energizer, ordering all their products to be banned from the U.S. market, the defendants grouped together and shared the costs of fighting back, recruiting a very prominent U.S. lawyer to handle their case, he recounts. \u201cWe didn\u2019t have a high enough budget at the time, so it was necessary,\u201d he explains.<\/p>\n\n\n\n<p>After gaining a win before the United States Court of Appeals for the Federal Circuit, which Energizer subsequently appealed, Changhong and the other defendants emerged victorious in the Supreme Court in 2009.<\/p>\n\n\n\n<p>Another significant case involved Sisvel over its <a href=\"https:\/\/www.sisvel.com\/licensing-programmes\/legacy-programs\/atss\/\">Automatic Tuning and Sorting System (ATSS)<\/a> pool, for which Changhong started negotiations in 2009. But the \u201crate was very high\u201d and \u201cthe portfolio had some problems\u201d, Mr. Dai says. In 2011, Sisvel filed a suit in the Mannheim Regional Court.<\/p>\n\n\n\n<p>The court issued a judgment in favor of Changhong in 2012, which he describes as \u201cvery lucky\u201d. But unhappy with the results, Sisvel continued to appeal until the case reached the German Supreme Court. In 2018, Changhong celebrated another major victory after the top court rejected Sisvel&#8217;s request for review and awarded the implementer damages.<\/p>\n\n\n\n<p>\u201cWe believe that if a patent licensing program is FRAND, we will pay, but if not, we are not afraid to fight \u2013 including by going to court,\u201d Mr. Dai emphasizes. He says the company has managed to strike licensing deals with major IP holders \u2013 including with pool administrators such as Via LA for its Advanced Audio Coding program (and Sisvel for its MPEG Audio, DVB-T and DVB-T2 programs).<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Still a cost centre<\/h4>\n\n\n\n<p>But as most IP heads know, celebrating litigation wins is only a small part of the job. Mr. Dai says one issue that he is still grappling with is the low level of importance that his department is still given within the wider company. \u201cThere have never been enough resources, and there still aren\u2019t,\u201d he says. Having so few resources does not mean you go unnoticed, he explains. If anything, his unit feels more pressure:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cPressure from the licensors to make more money, and pressure from our executives to reduce costs.\u201d<\/p>\n<\/blockquote>\n\n\n\n<p>But the Chinese consumer electronics market is currently shrinking, meaning that when licensors ask Changhong to simply raise their prices and absorb licensing fees into the cost of the components, this puts the company at risk of losing its already-diminishing market share. \u201cWe no longer have any bargaining power with retail companies,\u201d he adds.<\/p>\n\n\n\n<p>He explains: \u201cLike in most Chinese companies, our business unit is treated like a cost centre. We are more of a licensee so we spend most money on patent licensing, and we need to do more to change this situation.\u201d<\/p>\n\n\n\n<p>China is transforming from a major importer of IPR to a major creator of IPR, however, and Changhong has a bright future, Mr. Dai believes. That will be heavily supported by the IP department, he says. Currently, Changhong owns a lot of patents in what he calls \u201cwhite\u201d consumer electronics (fridges, vacuum cleaners etc.) but the company is looking to invest more in standard-essential patents (SEPs) \u2013 especially in the consumer electronics field. Most notably, it is looking to invest more in lithium batteries and solar energy and has also been eying the electric car electronics market (screens, other devices inside electric cars). \u201cMore and more Chinese companies are participating in global patent pool licensing activities as both licensors and licensees,\u201d he says, and Changhong wants to be among them.<\/p>\n\n\n\n<p>Mr. Dai notes that LG has unveiled plans for a patent pool in lithium-ion batteries and Avanci has already launched several programs in the smart car area:<\/p>\n\n\n\n<p>\u201cIf it were to launch one in the electric car electronics market, then we would consider joining. One of our key ambitions is growing our portfolio in that department \u2013 it\u2019s prosperous and we attempt to trailblaze where no path exists.\u201d<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Our understanding of IP only really began in 2001, when China joined the WTO \u2013 so the country has made significant progress in the past 20 years. But there still aren\u2019t enough resources being provided to IP departments, Mr. Dai told ip fray at Via Licensing Alliance\u2019s Business Summit in Shanghai last month.<\/p>\n","protected":false},"author":2,"featured_media":2230,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2228","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/ipfray.com\/staging1\/wp-content\/uploads\/2025\/03\/DAI-2023-scaled.jpg?fit=1703%2C2560&ssl=1","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/posts\/2228","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/comments?post=2228"}],"version-history":[{"count":8,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/posts\/2228\/revisions"}],"predecessor-version":[{"id":2253,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/posts\/2228\/revisions\/2253"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/media\/2230"}],"wp:attachment":[{"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/media?parent=2228"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/categories?post=2228"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/tags?post=2228"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}