This one was so easy to predict. For the past couple of decades, completely clueless US politicians and bureaucrats (and tech company execs) have been screaming about how China "doesn't respect" our intellectual property. They demanded that China "get more serious" about patents and respecting IP. And for nearly a decade we've been warning those people to be careful what you wish for. Because, now China has massively ramped up its patent system, often by using odd incentives, but rather than helping American companies that demanded it, pretty much every patent lawsuit in China has been about a Chinese company punishing or blocking foreign competition. This is because the Chinese aren't stupid. It's a country that has thrived on protectionism, despite global efforts to "open up trade," and here it realized that the West was handing them the perfect trade barrier: one that let them say they were doing what the West wanted, while giving it the perfect excuse to block out foreign competition.
The order comes after Chinese regulators shut down Apple’s iBooks Store and iTunes Movie services in China, the company’s second biggest market worldwide. In its earnings report from April, Apple also revealed that its revenue in China fell by 26%, worrying some investors. Still, Apple CEO Tim Cook said when speaking to CNBC’s Jim Cramer that he “could not be more optimistic about China.”
So, while clueless US and European IP bureaucrats celebrated China issuing so many patents, they totally missed that they'd actually given away everything. And, now you get stories like this: Apple has been banned from selling the iPhone 6 or iPhone 6s in Beijing, because of patent infringement. Regulators found that the design was too similar to the design of a Chinese firm's phone.
Apple Inc. violated the design patents of a Chinese device maker and may have to halt sales of its latest iPhones in Beijing, the city’s intellectual property authority ruled, handing the U.S. company its latest setback in a pivotal market. The iPhone 6 and iPhone 6 Plus infringe on Shenzhen Baili’s patent rights because of similarities to its 100C phone, the Beijing Intellectual Property Office wrote in its decision.
Many are speculating that Apple's recent $1 billion investment in the Chinese Uber clone Didi was in part to help deal with attacks like this. Basically every American company that wants to sell products in China ends up investing in Chinese companies for this kind of purpose. But, once again, just as we've been saying for years, the Chinese, unlike many in the West, absolutely recognize what patents are: a trade barrier, and they must love the fact that the US keeps asking them to build more trade barriers.
Until US patent officials finally understand that patents are not about innovation, but are really about restraints on trade, innovation and competition, we're only going to see more and more stories like this.