back to article European Union takes China to WTO over smartphone patents

The European Union has signaled its intention to file a dispute with the World Trade Organization (WTO) over China's treatment of intellectual property used in mobile phones. Announced late last week, the EU's action is yet to appear on the WTO's disputes list, but a statement outlines the dispute as centring on an allegation …

  1. ShadowSystems

    Tit for tat.

    If China wants to ignore everyone else's IP, then return the favour & ignore theirs.

    "You can't do that, it's (illegal/immoral/unethical)!"

    Pot meet kettle. Don't like it, don't let your nation's companies get away with it, that way other nation's might be more willing to respect your own IP.

    1. sabroni Silver badge
      Facepalm

      Re: Tit for tat.

      Yeah, that's a great plan as long as you don't think about it for more than a couple of seconds.

      1. Anonymous Coward
        Anonymous Coward

        Re: Tit for tat.

        Correct. The only pressure anyone can apply to China is to ban their goods and disable their phones if they connect to the EU cell networks. Does the EU have the guts to do that? The entire history of Europe would say "no" regardless of any WTO ruling and the Chinese governmrnt knows that.

        1. bombastic bob Silver badge
          Meh

          Re: Tit for tat.

          phones have a unique identifier that is apparently related to the model, etc. so banning them entirely on a network could be done, yeah.

          Unfortunately that might mean that a number of people will need replacement phones when they SUDDENLY DISCOVER that their phones stopped working...

          (I had to replace a perfectly working phone recently when AT&T stopped supporting 3G, but found an inexpensive flip phone on e-bay that had fat buttons compatible with my fat fingers, net cost cheaper than switching networks... for now. But I really did NOT want to spend money on THAT)

          1. Peter D

            Re: Tit for tat.

            If a Chinese company is happy to steal IP I'm sure it wouldn't worry about IMEI spoofing. It can be achieved in software in the same way as MAC address randomisation.

        2. mark l 2 Silver badge

          Re: Tit for tat.

          I don't think the EU decided to tell the telcos to block IP infringing phones would go down well with EU citizens who own one of those phones. As they are the ones getting punished in such as situation, as I doubt the EU would be willing to compensate those who had bought an none compliant phone.

          1. rclarke555

            Re: Tit for tat.

            surely, we wouldnt be talking about that many chinese phones really ?

            what is the percentage of usage of chinese mobiles in EU? probably not that much. Huwai, Xiaomi, ?

    2. msknight

      Re: Tit for tat.

      Do they have any because they're stealing everyone elses? (joke)

      1. John70
        Black Helicopters

        Re: Tit for tat.

        Could be a good way of copying a competitor's IP by copying the Chinese who copied it from the competitor in the first place.

    3. Aitor 1

      Re: Tit for tat.

      They have always ignored the IP.

      Then they started playing by the rules, because it benefitred them, and we stopped playing by the rules (see Huawei).

      A sad situation where most people don'tcare about fair or the law.

      And Chinese courts? well, good luck if you are not chinese.

      1. Anonymous Coward
        Anonymous Coward

        Re: Tit for tat.

        About 8 years ago, i was told the story of a Huawei card working in the latest Cisco kit, to prove that they had reverse engineered the Cisco kit to such an extent, it was a blatant copy.

        So, was that story just an urban myth ?

        What happened to Mitel ?

        We have always known technology is stolen by others, but are the Chinese vastly more prolific at it ?

        1. Anonymous Coward
          Anonymous Coward

          Re: Tit for tat.

          Yes they are more prolific at it because "we" started manufacturing everything over there. So the factory that is contracted to make Cisco's boards for Cisco is easily capable of knocking out extra's without even hiding it (just label them as duds & factor the "yield" into what you charge Cisco so they end up paying for the piracyof their own products.). The people at the factory also have everything they need to set up a duplicate operation elsewhere.

          The company I work for speificaly only makes generic parts in China because IP theft is a given when it comes to proper business planning.

          1. bombastic bob Silver badge
            Unhappy

            Re: Tit for tat.

            teaching your competitors how to make YOUR SECRET SAUCE is BAD for business.

            That money you "saved"? it's costing you a LOT more NOW.

        2. Anonymous Coward
          Anonymous Coward

          Re: Tit for tat.

          > are the Chinese vastly more prolific at it ?

          It's the usual story with countries with good industrial potential climbing the development ladder.

          Yes, the Chinese were at it, but these days not more than rest of us.

          Before the Chinese it was the Japanese. And before the Americans. And before the Germans¹. And so on.

          Tomorrow it might be us again so let's not get *too* worked up about that.

          ¹ At one point early in the continental history of the industrial revolution, the Germans had a reputation for producing cheap, bad quality knock offs of British industrial products. Machinery and so on. I read a rather interesting article about it some time ago in a German publication, I wish I could find it again.

          1. unimaginative
            Go

            Re: Tit for tat.

            There is a lingthy tome by a German economist which also attributes Germany's success at one critical point to weak (non-existent?) copyright laws which meant text books and other educational books were cheap.

            I have the same somewhere but have a deadline to meet so not going to find it now

            Contemporary IP laws are designed more to entrench the dominant players (because they are the people politicians ask what laws would be good for the industry) rather than incentivise innovation

            1. Anonymous Coward
              Anonymous Coward

              Re: Tit for tat.

              Indeed. To some extent it's the same with free software and, back in the day, the printing press. Dissemination of knowledge benefits all.

              > have a deadline to meet

              Just saw one zoom past me. Was it yours?

    4. bombastic bob Silver badge
      Megaphone

      Re: Tit for tat.

      Agreed. Tit for Tat.

      (WHY are we STILL doing business with COMMUNISTS??? Slave labor, unfair business practices on steroids, dumping to kill competitioon, price gouging when components go short... why is this NOT OBVIOUS that they are BAD for BUSINESS "over there" ???)

      1. Anonymous Coward
        Anonymous Coward

        doing business with Communists

        China's Communist? You could have fooled me! It's an unscrupulous corrupt dictatorship with business practices that are too sleazy for the Mafia.

      2. Lars Silver badge
        Happy

        Re: Tit for tat.

        "WHY are we STILL doing business with COMMUNISTS".

        I don't think the "Red Scare" works that well. Look at Vietnam.

        "Vietnam is a unitary Marxist-Leninist one-party socialist republic, one of the two communist states (the other being Laos) in Southeast Asia.".

        Britain is quite keen to join them in the CPTPP, the Pacific Trading Group.

        However the simple fact about those "communist" countries is well expressed in the following.

        "Although Vietnam remains officially committed to socialism as its defining creed, its economic policies have grown increasingly capitalist, with The Economist characterising its leadership as "ardently capitalist communists"."

        That of course goes for all of them and apart from that they are all run by a government of just one party just like Britain.

        1. unimaginative
          Mushroom

          Re: Tit for tat.

          Vietnam is not enganged in genocide or colonialism/empire building etc.

          The idea that Biritian is a one-pary state is just plain silly. We elections and opposition parties. Every government is a vote of no-confidence away from the opposition becoming the government. We also have freedom of speech and people do not disappear if they ciriticse the government.

          People like you have no idea what acctual oppressive states are like.

          1. Anonymous Coward
            Anonymous Coward

            Re: Tit for tat.

            The idea that Biritian is a one-pary state is just plain silly. We elections and opposition parties.

            That may be true. But it's irrelevant detail. We always get the same old clusterfuck of lying, incompetent, corrupt, theiving arseholes in power. The only difference is the colour of the rosette these scumbags wear when trying to buy votes.

            We do have a one-party state - the party of the mediocre and self-serving.

            1. Julz

              Re: Tit for tat.

              Ever though of being a politician?

            2. Anonymous Coward
              Anonymous Coward

              Re: Tit for tat.

              > We always get the same old clusterfuck of lying, incompetent, corrupt, theiving arseholes in power

              Why do you say that? I have never won an election yet.

    5. martinusher Silver badge

      Re: Tit for tat.

      Smartphones and the wireless infrastructure are a good example of international standards -- everything is made for a global market with any local differences such as frequency bands in use being managed by software. The standards are set by what is effectively a consortium of manufacturers and telecos and these standards make use of a patent pool where all relevant patents are contributed by their owners. In return, the license fees levied for using these standards are divvied up among the various patent holders.

      ts reckoned that significantly over half the patents needed to implement 5G are owned by Huawei. They were already a couple of years or more ahead of the US with this technology when it was decided to attack them on "national security grounds".I

      These sorts of patents will be a bit more fundamental than "a rectangle with rounded corners", they define the technology. It will be interesting to see what the EU comes up with; I suspect its just a political thing (especially as it references obsolete technologies).

    6. Dave 15

      Re: Tit for tat.

      What IP? They seem to just copy.

  2. steviebuk Silver badge

    Will continue

    Forever while the CCP are in control. Xi has already started to lock the country down, as a foreigner you can no longer travel there, unless they want something you have.

    What some don't realise is for foreign companies to trade in their market over there, they are forced to partner with a Chinese company which is normally always a CCP controlled one. Appears Apple don't give a shit about their phones being ripped off otherwise they'd pull out of the market.

    1. sabroni Silver badge

      Re: Appears Apple don't give a shit about their phones being ripped off

      Or they've balanced the profit and loss scenarios and are gambling that it's a net win for them?

      1. Richard 12 Silver badge

        Re: Appears Apple don't give a shit about their phones being ripped off

        Apple have very little of what we'd consider protected IP. They licence almost everything about how a phone works.

        What they do own is the specific embodiment of a few physical items, the OS and the keys used to sign them.

        I presume they're betting that any attempts made to clone their phones will fail because they keep the keys secret. A phone that is an exact clone of the hardware won't run iOS unless it's got the right keys burned into some components.

        I wonder, could this actually be why Apple are so vehemently against the right to repair?

        1. VoiceOfTruth Silver badge

          Re: Appears Apple don't give a shit about their phones being ripped off

          'Apple have very little of what we'd consider protected IP.'

          They stole much of that from Nokia. But Nokia patents weren't worth much, according the American courts. If you put a rounded corner on a phone and Apple has done the same, they will rain fire down on you.

          1. ITMA Silver badge

            Re: Appears Apple don't give a shit about their phones being ripped off

            "If you put a rounded corner on a phone and Apple has done the same"

            Define "Rounded"...

            Since making a truly "square" corner is very, very, very hard it comes to "how rounded"?

            1. bombastic bob Silver badge
              Trollface

              Re: Appears Apple don't give a shit about their phones being ripped off

              "how rounded"?

              Heh. You should consider a career as a l[aw]yer.

              1. ITMA Silver badge
                Trollface

                Re: Appears Apple don't give a shit about their phones being ripped off

                We have an IP lawyer at work....

                I'll get him on the case....

          2. Lars Silver badge
            Coat

            Re: Appears Apple don't give a shit about their phones being ripped off

            Patents get old normally in 20 years but there is more to IP than patents. To quote the Wikipedia.

            "Intellectual property rights include patents, copyright, industrial design rights, trademarks, plant variety rights, trade dress, geographical indications,[29] and in some jurisdictions trade secrets. There are also more specialized or derived varieties of sui generis exclusive rights, such as circuit design rights (called mask work rights in the US), supplementary protection certificates for pharmaceutical products (after expiry of a patent protecting them), and database rights (in European law). The term "industrial property" is sometimes used to refer to a large subset of intellectual property rights including patents, trademarks, industrial designs, utility models, service marks, trade names, and geographical indications

    2. Youngone Silver badge

      Re: Will continue

      What some don't realise is for foreign companies to trade in their market over there...

      Anyone who doesn't realise that has not been paying attention for the last 35 years and deserves everything they get.

      China has used the greed of the capitalist West against itself, and didn't even make it a secret.

      In the 1990's, when China decided to start to open itself up to trade, the greedy bastards who run the vast corporations that run the West looked at a huge, cheap labour supply they could exploit, and a huge new potential consumer market they could profit from and China gave them some rules they had to follow.

      China also made it clear that the rules might change at any time, but they dived in anyway and they're reaping what they sowed.

      The vast corporation I work for (for instance) makes nearly $1 billion in profits every year from China, and if the locals steal some stuff along the way, well the shareholders don't seem to mind.

  3. T. F. M. Reader

    Fines? Fine.

    Fines for ignoring such injunctions can reach €130,000 ($147,000) a day.

    So at most a bit under €47.5M (a bit over $53.5M) a year. Is it a significant sum for a smartphone manufacturer or a rounding error?

    1. Warm Braw

      Re: Fines? Fine.

      Except that there are often multiple cases. If you believe your IP is being infringed, a common remedy is to bring an action in a country where the disputed products are being sold to prevent their being imported. You might want to do that in a number of markets. If every time you try it a court in China issues you with a legal order to desist until the patent validity has been determined by a Chinese court then the fines will soon mount up.

      And if they were not a deterrent, they would soon be raised to a level at which they would be.

  4. DevOpsTimothyC

    Turn and Turn about / The (US) patient system is broken

    So with America taking a strong anti-China policy with various sanctions against their tech companies, AND the US legal system being REALLY bias favouring US companies whenever they violate other countries patients wouldn't a more sensible approach be to get rid of software patients.

    Once we get to hardware patients then put EVERYTHING into FRAND?

    1. VoiceOfTruth Silver badge

      Re: Turn and Turn about / The (US) patient system is broken

      Do as we do, not as we say.

      The USA has a hideous history of stealing other countries' IP. Take the float method of glass production, invented by Pilkington. The USA forced the release of this world-beating IP. Before that, the theft of penicillin - production methods patented by the USA. The patents given to Apple for the magnetic plug used for years on Japanese kettles.

      I'm surprised the alphabet hasn't received a patent in the USA. Pay per word for usage.

      1. Tom 38

        Re: Turn and Turn about / The (US) patient system is broken

        The industrial revolution in the US was based upon the IP theft of things developed in the UK. Slater the Traitor stole Arkwright's designs and took them to the US.

      2. Anonymous Coward
        Anonymous Coward

        Re: Turn and Turn about / The (US) patient system is broken

        "Take the float method of glass production, invented by Pilkington."

        Ford licensed it, and Guardian Glass Co. paid royalties after defying Pilkington's initial licensing denial by building a float glass factory anyway.

        The real thief was John Akfirat, who stole plans from Ford and tried to sell them and tried to build a plant in Romania.

      3. mark l 2 Silver badge

        Re: Turn and Turn about / The (US) patient system is broken

        Lets not forget how the US industries benefited from knowledge of Nazi scientist allowed to get away with their crimes during WW2 if they agreed to go to the states.

        1. Boris the Cockroach Silver badge

          Re: Turn and Turn about / The (US) patient system is broken

          Cant really blame the nazis for that though, given the choice was to surrender to the US/British and get a job in the US, or to surrender to the USSR and be given a trip to one of their 'closed' cities for the next 10-15 yrs.

        2. bk109

          Re: Turn and Turn about / The (US) patient system is broken

          Or Japanese (including some that experimented on Allied soldiers). Or all those people that had their wartime acts whitewashed on both sides of the barricade, because both sides needed a nucleus around which a new German army would grow. Hell, the more historians start to dig through WW2 records, the more it'd appear that quite a few acts of stupidity (ie Stalingrad) that've been blamed solely on the Charlie Chaplin cosplayer were actually done by subsequently "rehabilitated" generals in Soviet and Allied employ.The sad truth is that when it comes to national interests (or money, or both), principles get cast aside faster than you can say "Hipocrisy".

          It's not even limited to the big guys - for example driven by their own national interests (to weaken Iraq), the Israeli were helping maintain Iranian gear after the revolution (and allegedly helped train their internal security apparatus after SAVAK got gutted).

          1. Anonymous Coward
            Anonymous Coward

            Re: Turn and Turn about / The (US) patient system is broken

            And Skorzeny ended up spying (quite enthusiastically) for the Israelis.

            (It was published in Haaretz four or five years ago)

        3. Anonymous Coward
          Anonymous Coward

          Re: Turn and Turn about / The (US) patient system is broken

          Let's quote Ice Station Zebra, shall we:

          > The Russians put our camera made by our German scientists and your film made by your German scientists into their satellite made by their German scientists

  5. Tubz Silver badge

    or stop manufacturing in China and ban anything that infringes IP until a WTO IP court decides one way or another. Good luck getting countries signed up to that !

  6. alain williams Silver badge

    Take them to court outside China

    Get a court injunction in the EU, USA, ... to prevent the Chinese made goods being sold in the EU, USA, ... on the grounds of IP violation.

    1. Anonymous Coward
      Anonymous Coward

      Re: Take them to court outside China

      This would have the welcome benefit of putting tatorama shops - Apple/Dixons/Pissy World/etc - out of business because they'd have empty shelves. And would this ban of yours be extended to EU/UK/US assembled products that are full of Chinese-made electronics?

    2. martinusher Silver badge

      Re: Take them to court outside China

      Tricky.

      I got my free in-home tests (courtesy of the Federal government) last week. Guess where they were made?

      (OK, so an American company probably developed the test and got the video made that shows you how to use it. But the rest.)

      (Its also a sign of the times that when we got new trash carts delivered today -- the things you know as 'wheelie bins' in the UK -- that the information printed on them is not just in English and Spanish but also Chinese. Global product, you see. I haven't even bothered to see where they were made. I can guess. I can also guess that the identical bins are probably in use all over China.)

  7. VoiceOfTruth Silver badge

    Supreme Court independence

    'China's Supreme Court – which does not enjoy the same independence and freedom from political influence as courts in other nations '

    Hahaha. Who writes this? In the UK I cannot name even one member of the Supreme Court here. And when I look at the thoroughly politicised Supreme Court appointments in the USA I have to laugh.

    1. bombastic bob Silver badge
      Meh

      Re: Supreme Court independence

      thoroughly politicised Supreme Court appointments in the USA

      you are NOT wrong.

    2. Ken Hagan Gold badge

      Re: Supreme Court independence

      That doesn't mean China's supreme court isn't worse.

  8. Dave 15

    Simple

    China has long been known for this.

    If companies continue to outsource manufacturing to China then they should be banned from sale in EU (and UK though now obviously different). Companies (everyone it seems from car manufacturers, electric vehicle people through to toy train manufactures) have all moved to China because it is perceived as cheap (cheap energy, cheap labour, cheap capital) but in doing so they lose control of a lot. They should ALSO lose any support at 'home', they should lose access to markets at home as well. You dont make it here you cant sell it here should just be a simple factual statement. China makes it so why cant we

    1. Lars Silver badge
      Pint

      Re: Simple

      "why cant we".

      Of course you can, just stop importing anything made by "British" firms abroad but never mind stuff made by other companies abroad.

      Better close the border for anything but raw material. You have the manpower no doubt if not for lorry drivers.

      Never mind, but.

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