No more CeBIT police raids: European, Chinese companies talk on tech licensing

IDG News Service - There were no early-morning raids by police looking to seize patent-infringing MP3 players at this year's CeBIT trade show in Germany — but behind the scenes, haggling continued over technology licensing issues.

In recent years, raids by German police or customs officers had become a regular feature of shows such as CeBIT, which is held annually in Hannover, and the IFA consumer electronics exhibition in Berlin. The raids often were done at the instigation of an Italian company named Sisvel SpA, which licenses patented technology essential to the manufacturing of MP3 players.

At this year's CeBIT, though, things were a little quieter, thanks in part to the intervention of a team of mediators from a new organization: the China IPR Desk, which is supported by China's Ministry of Commerce and the European Commission.

To avoid costly legal action, "we thought we would try mediation, bringing companies together that are not yet partners," said China IPR Desk team leader Carlo Pandolfi. The process also allows the mediators to advise companies that don't know about laws governing patent licenses or don't have the language skills to negotiate licenses, he said.

In principle, the mediators wait for companies to approach them. But in practice, work began long before the show, team member Wu Zhuomin said. "We contacted Chinese companies to let them know what the legal situation is in Germany, asking them to be sure their products don't infringe patents and other rights," Wu said.

Sisvel studies exhibitor lists ahead of shows to identify companies that are not yet licensees of its patents and are likely to display infringing products, said Thomas Hartmann, managing director of the company's Sisvel Germany unit. Exhibitors that declined a request that they sign a patent licensing agreement in previous years might well have had potentially infringing products seized by police on the opening day of a show, for possible use as evidence in legal proceedings, Hartmann said.

Pushing for legal authorities to take action during a show is the only way that patent owners can protect their rights, Hartmann contended. He added that civil proceedings would be too slow, leaving companies free to exhibit and sell infringing products.

Hartmann noted that, perhaps encouraged by the efforts of the Sino-European mediation team, "quite a lot of companies came at the beginning of [CeBIT] saying, 'We might have a problem — how can we solve it?'" But for others, mediation is just another way to stall for time, he said.

Until now, the focus for both sides has been on persuading Chinese companies to pay to license technology developed in the U.S. or Europe. But as Chinese manufacturers increasingly develop their own intellectual property, they're starting to take an interest in licensing technology to Western companies.

Last year, for example, Shenzhen, China-based Huawei Technologies Co. was the top applicant for international patents under the World Intellectual Property Organization's Patent Cooperation Treaty, which allows applicants to protect an invention in a large number of countries with a single filing.

"Patents are being registered [in China]," Hartmann said. "We are talking with quite big Chinese companies to evaluate their patents and license them,"

Another member of the China IPR Desk team, Wang Xuming, also sees signs that the tables might one day be turned. "Chinese companies are very interested in whether we will offer the [mediation] service for Chinese rights holders," he said.