Patent pressure under the development of China's LED

Event One: On June 7, 2011, it was reported that OSRAM accused South Korean companies LG and Samsung in Germany and the United States, claiming that the two companies infringed their LED technology patents. The court was ordered to prohibit the import and sale of allegedly infringing LED products and required the two companies to compensate for their losses. On June 10, Samsung LED counter-claimed Osram in Seoul's Central District Court to infringe its patented LED technology. The industry believes that Samsung’s move is in response to OSRAM’s lawsuit against Samsung infringing its LED technology patents.

Event Two: On April 5, 2011, Cree and OSRAM announced that they have signed a comprehensive global patent cross-license agreement. The agreement covers patents in the fields of blue LED chip technology, white LEDs, phosphors, packages, LED bulb lamps, and LED lighting control systems. Cree also recently reached a patent agreement for LED technology with Philips, Nichia, and Toyoda Gosei. According to analysis, the five largest LED giants in the world have basically formed a new new patent crossing network.

Event 3: On March 31, 2011 and April 8, 2011, the domestic famous lighting company NVC NVC and Shanghai Yaming successively signed a strategic agreement with the US LED epitaxial chip maker Cree. The general interpretation of this action industry is that the two plants have resolved patent risks in overseas product sales.

Event 4: In March 2011, Zhejiang Sunshine Lighting (600261), a major domestic lighting company, released its 2010 financial report, and also released a news that it will acquire a Japanese LED company at a premium of 50,000 yen per share. The equity of LIREN, with a total investment of 16 million yen (approximately RMB 1,237,600), holds a 30.188% stake in the company after the completion of the investment. The acquisition of this enterprise by Sunshine is its research and development capabilities and its holdings. Intellectual property. As the disclosure of this matter coincided with the high-profile announcement of the sun lighting investment into the LED lighting business at the moment, highlights the importance of LED light source manufacturing patented technology.

From the above series of events, we can see that although there have been few patent disputes in the LED field in China since the “337” investigation, the patent risks that Chinese companies are facing are not reduced, but they are still in brewing. Some companies have started to be aware of this situation and have taken action to resolve it. How to formulate an appropriate patent strategy will affect the healthy development of China's LED industry.

Disadvantaged patent dispute

American scholar Lie Bolkwitz believes: "The patent strategy is a tool that guarantees that you can continue to gain competitive advantage." This statement is true, in the LED industry, patent rights are the main international business giants engaged in market competition One of the tools and play an increasingly important role. Because Chinese enterprises started late in the LED patent layout, patent application time, type of patents, authorization ratios and other aspects have a big gap with foreign companies, especially in high-end chips and some applications. In recent years, although China's semiconductor lighting industry has achieved rapid development, the number of patent disputes it faces is also increasing. Domestic semiconductor lighting companies are often in a passive situation in these disputes.

According to Professor Luo Yi, a professor at Tsinghua University and an expert in the overall project of the 863 “Semiconductor Lighting Project”, from the perspective of the development of the GaN-based LED industry worldwide, the technological level of enterprises in Japan, the United States, and Europe, especially the high-end products The level of research and development is in a leading position. Some of the more famous companies include Nichia, Toyoda Gosei of Japan, Cree, Lumileds of USA, and Osram of Germany. These companies have 80% to 90% of original invention patents, focusing on material growth, device manufacturing, etc., leading the trend of LED technology development, and occupy the majority of market share. Even international giants such as Nichia and Cree still have more numbers and advantages even in patent applications in the field of material extension and chip production in mainland China.

As for the status of domestic LED patent applications, Liang Bingwen, a researcher at the Suzhou Nanotechnology Institute of the Chinese Academy of Sciences and chairman of Suzhou Najing Optoelectronics pointed out that although domestic LED companies have applied for many LED patents and even LED invention patents in recent years, most of them are not original, most of them. It is based on the original patent of the international LED giants, to do some repairs, and its patented gold content is also greatly reduced. According to statistics of National Semiconductor Lighting Engineering R&D and Industry Alliance, although the number of LED patents applied for by China has increased rapidly in recent years, there is still a large gap between the types of patents, application time, and authorization ratios compared with advanced countries and regions. The field of high-end chips is particularly evident. As of 2010, a total of 234,874 LED patents have been filed in the world, and 21,548 LED patents have been filed in China, accounting for about one-tenth. However, the number of patents in the industry's upper reaches of the industry and the chip area is small, and the number of applications for inventions such as backlighting and automotive lighting is also low in some downstream applications with high technological content. Mainland enterprises applied for fewer international patents. From the point of view of application time, the upstream industry is generally about 10 years later than that of foreign countries. The time gaps between traditional technologies such as chip electrodes, dicing, encapsulating materials, epitaxial buffer layers, and silicon carbide substrates are the largest, generally 15 to 20 years. Mainstream technologies such as epitaxial contact layer, epitaxial cover layer, epitaxial quantum well technology, superlattice technology, gallium nitride substrate technology, chip microstructure technology, and passivation technology are different by about 10 years. In the downstream industries, although the rapid development in the past two years has shortened the gap, compared with the situation in foreign countries, China's original invention patents are still missing, and most of them are imitation-type patents.

The battle for patents has just begun

At present, the core patents of the LED industry are basically controlled by foreign companies. These companies use their core patents to adopt horizontal (simultaneously entering multiple countries) and vertical (continuously perfecting designs and making follow-up applications) expansion methods, and rigorously patented networks are deployed throughout the world. Several international LED manufacturers have fully utilized LED-related intellectual property rights to achieve the goal of fighting against rivals and maintaining their own market position. The developed countries are using patented weapons to seize the Chinese market and pose a trend and pressure for the “internal blockage” of Chinese enterprises. The famous "337 investigation" incident gave a warning to the development of the LED industry in mainland China.

However, to date, most domestic companies have not given sufficient attention to the patent issue and are still unfamiliar with the status of patents and patent laws. Some new investment projects have not conducted sufficient due diligence on IP and there is a great legal risk. There is no lack of opinions in the interview that the current LED companies in Taiwan and South Korea are the focus of patent litigations of big companies such as Nichia, Cree and Osram, and there are not many patent litigations in mainland companies. However, Director Mao Jinsheng of the Development Research Center of the State Intellectual Property Office believes that the "337 investigation" of the LED industry in mainland China is just a beginning, and overseas companies are likely to adopt the "pig strategy." With the development of time, Taiwanese and South Korean companies will gradually reduce their patent disputes through the authorization and transfer of patents, and Chinese mainland companies will most likely receive more attention as their export scale continues to expand. The intellectual property issue will face greater challenges. George Craford, former CTO of Philips Lumileds and inventor of Huang Guang LED, also stated that at present, Chinese LED companies may infringe the patents of international LED companies when developing their own LED chip products and application products, and Chinese LED companies may face patent litigation. From the operation point of view, the international LED manufacturers generally do not warn in advance, but will continue to collect evidence of infringement of the other company, until the time is ripe, take direct patent litigation and other actions. As the vast majority of invention patents of domestic LED companies are not original, they are based on the original patents of the international giant LED to do some repairs, and the international LED giants to play a patent lawsuit, often at a disadvantage. Therefore, the patent issue will seriously restrict the development of the LED industry in mainland China. Therefore, it is a long-term and arduous task that the LED industry in mainland China needs to strengthen its awareness of intellectual property protection and implement effective countermeasures.

Exploring the Causes of Passive Patent Situation

The reasons for the current passive situation of China's LED industry patent strategy are complex and diverse. According to the analysis of National Semiconductor Lighting Engineering R&D and Industry Alliance Consultation Department, compared with developed countries, China's semiconductor lighting has a large gap in R&D investment, although the country has passed the period from the "Tenth Five-Year" to the "Twelfth Five-Year Plan" period. National science and technology breakthrough plans, 863 projects, support plans and other major projects have continuously increased investment in research and development of semiconductor lighting technology, but there is still a large gap compared with the input of European, American, Japanese, and international corporate giants. Secondly, a strategic alliance was formed after the phase of patent warfare disputes between international semiconductor lighting companies. Large companies have successively reached a series of cross-licensing agreements. Through the joint construction of companies, etc., strong alliances, occupy and maintain market share. The scale of China’s enterprises is small, and there are still low levels of competition among enterprises, and they are in a state of war. They have not yet formed a joint force. In the face of patent disputes, the company’s self-organizing ability is not strong enough to form an effective patent alliance and it is difficult to deal with lawsuits of large foreign companies.

In addition, the prominent status of China's LED companies in R&D investment is also an important reason for the current difficulties. The main applicants for LED-related patents of the U.S. Patent Office and the European Patent Office are enterprises. According to the statistics of National Semiconductor Lighting Engineering R&D and Industry Alliance, the invention patents in the core of semiconductor lighting technology in mainland China come from a large number of research institutions such as universities and colleges. The scientific research institute is not as good as the enterprise in market sensitivity and technological transformation capability. General R&D has rarely undergone a pilot test, and many hospitals have lacked the maintenance and subsequent development of patents due to funding interruptions. Although some of the institute's patented technologies have already been transformed into achievements in enterprises, overall, the proportion of patent technology ownership held by scientific research institutes is too high, which is detrimental to the implementation and industrialization of patented technologies.

How to break through core patents?

The impact of patent disputes is not entirely negative. It can also encourage Chinese LED companies to invest more funds and energy in the development of technologies. We can get an inspiration from companies in Taiwan and South Korea. To avoid patent disputes with major international companies, we must have our own unique technologies and patents. This is the most fundamental capital for negotiating with them and through this capital. Achieve win-win cooperation. Enterprises must actively formulate patent strategies that meet their own development agility and put them into practice. At the same time, they must make full use of patent intelligence information, study and analyze the competitive situation, and promote the development of patented technologies.

What kind of breakthrough should be made? In this regard, Prof. Luo Yi pointed out that gallium nitride (GaN)-based high-brightness, power-based light-emitting diodes as the core semiconductor light source technology is currently at home and abroad optoelectronic industry research and development hot spots. A breakthrough has been made in this area, which can fundamentally reverse the reality of China's semiconductor lighting patent dilemma. This should be a key area for government and mainstream companies to conduct technological R&D. Although the GaN-based high-brightness and power-based LEDs have obvious first-mover advantage in the key technologies, and the latecomers enter the objective reality of large barriers, because of the wide distribution of the technical routes in the field, the basic physics The mechanism is still unclear. The contents of each key technology are more “know-how” components, leaving plenty of room for innovation for follow-up developers. Technologies such as improving the reliability and stability of GaN die devices: "droop" effect under high-current operation, purity of output spectrum, stability of output light peak wavelength, system-level optical design and thermal management technology for semiconductor lighting And so on, all global R&D personnel are committed to solving it, and they are all promising candidates.

In addition to the need to achieve breakthroughs in upstream core technology, there are relatively few existing patents in the downstream and midstream areas such as LED packaging and applications, and there are a large number of patents that can be tapped, and foreign companies have not yet built patent barriers in this area. It is as rigorous as the upstream sector and it is expected that related fields will be the focus of foreign large companies' layout. The Chinese mainland companies have greater advantages in upstream and downstream LED technology research and development than in the upstream. Especially in the Pearl River Delta region, there are a large number of enterprises engaged in the development of the middle and lower reaches. Some application companies also have a very good R&D foundation and are in the application process. There is a great opportunity to make breakthroughs, thereby breaking the passive patent landscape. Therefore, in the next few years, Chinese enterprises should focus on technology research and development and patent layout on LED packaging and application technologies, such as drive circuits, heat dissipation, and optical design and other technical issues involved in packaging and application. In order to obtain as many patents as possible as soon as possible, and then use this as a bargaining chip and mutual authorization of foreign companies to achieve the ultimate goal of occupying a larger market share.

Seek patent cooperation and authorization

On the one hand, it is necessary to strengthen independent creation. On the other hand, if China's LED wants to break through the patent predicament, it should also attach great importance to strategic cooperation and strategic introduction, and strengthen intellectual property to create strategic cooperation. With the increase in the competitiveness of some companies in South Korea and Taiwan, some companies represented by Toyota Synthesizing will also accelerate the speed of authorization from their own interests. China’s policy is clear, the consumer market is huge, and the semiconductor lighting industry has a bright future. Moreover, China’s semiconductor lighting industry has a relatively good foundation. Talent, labor, and supporting resources are good. China’s semiconductor lighting companies have great opportunities for cross-licensing and cooperation. Recently, some domestic companies and Jingyuan Optoelectronics, Epivalley, SemiLEDs and other companies have established joint ventures, and have made good progress in the breakthrough of patent rights. However, Mao Jinsheng also pointed out that any negotiation and cooperation is based on its own strength. In order to obtain better cooperation or authorization conditions, Chinese enterprises should first strengthen their own strength. In addition, foreign patent cooperation should not only be limited to obtaining patent authorizations, carry out cooperation with foreign institutions, actively attract foreign R&D talents, encourage industry companies to tap foreign patented technologies, and strategically acquire and digest potentially valuable technologies. The second innovation is an effective means of development.

Making use of the role of the patent union

At a time when patent competition is at a disadvantage, it is important to strengthen industrial technology research and development alliances, establish industry patent alliances, establish patent pools, and strengthen patent sharing to strengthen joint response mechanisms and improve the ability to respond to international disputes. According to Qi Yongkang, an intellectual property engineer at NVC, the patent alliance is a third-party patent management platform that can be uniformly collected, unifiedly authorized, and managed in a unified manner. Chinese companies own semiconductor lighting intellectual property, integrate complementary technologies, and avoid members. Infringement lawsuits, reducing the cost of external authorization, establishing industry standards, external countermeasures against technical monopolies, and holding groups to fight patent infringement lawsuits and enhance the status of negotiations.

However, the reality that must be taken into account is that China’s LED companies have relatively little independent intellectual property rights, especially the core patents that have negotiating status are very scarce. There is also a lack of cooperative relations based on complementary interests between enterprises. Instead, there is a brutal competition situation in which homogenized products and the same competitive means compete for the same market. This is also different from the international alliance model of patent alliances, and the basis of cooperation is relatively weak. In order to have a better competition situation in the international patent competition, Ji Yongkang believes that in addition to taking China’s vast market as a bargaining chip, in the process of forming a patent alliance, the principle of equality regardless of the number of patents among members must be adhered to. It is also very important to ensure the unity and cooperation of the patent union.

In short, facing the increasingly severe situation of intellectual property protection at home and abroad, relying on autonomous core technologies, while strengthening innovative research and development efforts, using patent alliances and seeking international cooperation, can we compete in the current competitive landscape of challenges and opportunities. Get a place.

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