Why are “patent trolls” targeting China’s chip industry?

Huawei’s tsunami-like impact caused by chip supply cuts has not only made all walks of life pay close attention to “where is the road for Chinese enterprises”, but also pushed China’s chip independent innovation industry to a new journey.

Just as “China Core”, representing the enterprise Loongson Zhongke, was preparing to be listed on the Science and Technology Innovation Board, and released a new generation of independent command system architecture, LoongArch, two months ago, it realized from the top-level planning to the function definition of each part, and even the definition of each command. When the code, name and meaning were independently designed and compatible with various mainstream command systems, another infringement lawsuit followed: In early June, Shanghai Xinlianxin Intelligent Technology Co., Ltd. took advantage of the online media several times to claim that Godson Zhongke was in There was a breach of contract when the new generation of autonomous command system architecture LoongArch was released, and its statement of “completely” abandoning the MIPS architecture “infringed” on the rights and interests of Chiplink, which has obtained the exclusive right to operate MIPS in China.

Immediately, Godson Zhongke also quickly launched a counterattack, saying that the letter and information that Xinlianxin continuously released to Godson Zhongke’s partners and the public were maliciously slandering, slandering Godson Zhongke, Godson products and independent intellectual property rights, which seriously violated the law. Godson Zhongke’s legitimate rights and interests, and caused extremely bad social impact, Godson Zhongke has taken legal action.

When the media learned more about the incident, they found that Shanghai Chiplink Intelligent Technology Co., Ltd., which was established in 2018 and obtained the exclusive right to operate MIPS in China (including Hong Kong and Macau) in 2019, is responsible for all MIPS licensing contracts in China. The company, its MIPS operating rights in China refer to the right to use and sell, not the ownership of copyrights and related patents, and in its statement against Loongson Zhongke, it only mentioned intellectual property many times, but it is not the case for Loongson Zhongke. It kept silent about which patents it infringed, and used words such as “such as…” and “maybe” to “guess” that Godson’s new instruction set was infringing.

At the same time, the media also found that as of now, the “intelligent technology” company, Chiplink, has no scientific research team and business team, and financial and legal personnel account for the largest proportion of companies with less than 100 people. In February 2021, it was approved by the US court After MIPS China has the right to operate, there is no clear business development, and a “shell company” has started the “profit” road.

Just because Loongson Zhongke, once the largest MIPS instruction set customer in China, no longer develops chips based on MIPS when it launched the completely independent LoongArch instruction set, and LoongArch also authorizes other companies for free, which makes the operation obtained from MIPS at a high price. The loss of economic benefits of Chiplink’s right is the main motive for Chiplink to raise its suspicions about LoongISA and LoongArch and issue an infringement statement.

As for whether there is infringement, Godson Zhongke said that it has submitted all the evidence and documents involved in the incident to the legal department.

The “empty shell arbitrage” of Chiplink Core not only reminds many people of the patent hooligans encountered by Intel and Apple before.

Thirty years ago, Intel was burdened by a large number of malicious patent lawsuits. Peter Detkin, Intel’s deputy general counsel at the time, described these companies who easily initiated lawsuits for no reason as “patent trolls”, and bluntly believed that this kind of behavior exceeded the normal assertion of patents. The boundaries of rights belong to naked patent extortion.

Until 2021, huge interests have made this type of extortion impossible.

Chiplink, which has no real business or scientific research team, chose to launch patent lawsuits against Chinese chip companies at a critical point in the rise of independent innovation in China’s chip industry in the context of increasingly fierce competition in technology between China and the United States. The motivation and background are not only Food for thought.

Why are “patent trolls” targeting China’s chip industry?

01

Patent “The Book of Getting Rich”

How to judge whether a patent lawsuit initiated by a company against another company is a reasonable patent protection action or a deliberate patent troll behavior, industry professionals and legal circles have summarized several judgment criteria.

One is whether there is a frivolous or abusive prosecution, such as insufficient investigation of infringement facts and evidence before prosecution, or a large number of lawsuits against one or more entities within a short period of time.

The second is whether the patent used in the litigation is actually worthless or does not contribute to the existing technology, and is a low-quality patent.

The third is whether the patent used in the lawsuit is supported by a certain amount of R&D investment. In order to greatly reduce costs, shell companies often devote a lot of energy to litigation rather than the company’s business and scientific research itself.

The fourth is whether there has been a patent license negotiation with the respondent before the lawsuit, and some patent troll companies choose to sue directly, or unilaterally provide materials to trigger network fermentation to achieve the purpose of extortion.

Fifth, whether the lawsuit has caused great trouble to the respondent. For example, a lawsuit is initiated at a special time node (when it is about to go public), or a large number of lawsuits are used to cause a lot of cost to the respondent.

And this time, the core link core that made an infringement claim to Godson Zhongke seems to be “in every way”.

According to foreign media statistics, more than 60% of US patent lawsuits in recent years were initiated by “patent trolls”.

In 2015, ZTE had to pay $21.5 million to settle the Vringo patent operation case that caused a stir in China. The Nasdaq-listed patent operation company has more than 600 patents covering telecom infrastructure, Internet search and In the field of mobile technology, it is one of the famous “patent troll” companies.

The Seattle-based high-tech invention has about 60,000 patents worldwide, ranging from nuclear reactor designs to camera lenses, and has benefited more than $2 billion from patent lawsuits against Motorola, Samsung, BlackBerry and other giants.

In recent years, it is more typical for a “fortress investment group” under Japan’s Softbank. By acquiring and hoarding more than 1,000 patent rights from various companies, it has continuously launched patent lawsuits against Intel, Apple and other companies until it was jointly countersued by Intel and Apple. .

In China, similar patent troll cases also occur frequently, and some suffered heavy losses due to “failure to touch porcelain”. For example, in 2017, they tried to sue a company in DJI, but it was invalidated by DJI through the Patent Reexamination Board of the State Intellectual Property Office. The 17 patents held in the hands are “profit” and both money and money are empty.

02

Why “patent trolls” took aim at China’s chip industry

Undoubtedly, while evolving to more sophisticated and higher performance, the chip industry has become the main battlefield for a new round of competition in the global technology field.
It is precisely because of this that Chinese chip companies, which have shouldered the heavy responsibility of the rise of China’s chip industry for decades, have grown from nothing to strong. widely known to the public.

At that time, Loongson Zhongke had invested a full 20 years in controlling the self-developed chip technology.

In 2001, my country’s first self-developed “Godson” CPU processor was born in the Institute of Computing Technology, Chinese Academy of Sciences. With the support of the “863 Program” and the “Nuclear High-Based Project”, which are not abundant project funds, the team of the Institute of Computing Technology of the Chinese Academy of Sciences, the predecessor of the marketization of Godson China Science and Technology, released the first domestic general-purpose chip Godson No. 1, which is also the first domestic independent chip. The developed processor announced the end of China’s coreless history.

In 2010, with the support of the Chinese Academy of Sciences and the Beijing Municipal Government, Loongson Zhongke officially started its market-oriented operation. In 2015, it achieved break-even and ushered in CDH Capital. In 2016, Loongson 3A2000/3B2000 was mass-produced and iteratively applied in promotion and application. Until 2020, Loongson 3A5000/3B5000 was successfully developed, and its performance has approached the mainstream products in the market.

In April 2021, the new generation of independent command system architecture released by Godson will push China’s core autonomy to a new level.

For 20 years, Hu Weiwu, chairman of Loongson Zhongke, and the “big boat” at the helm of him have worked hard in the integrated circuit industry, which is rarely seen in the media and the public. As the country pays more and more attention to the information technology application innovation industry, as an important member of the “national team” of the chip industry, Godson began to move to the front.

Previously, when Xinhua News Agency interviewed Hu Weiwu, he asked what he thought of ZTE and Huawei being suppressed by the United States and the crisis of supply of components and chips. Hu Weiwu said frankly that the “stuck neck” incident has actually played a great role in promoting China’s information industry. Let the people of the whole country realize that they can’t have any illusions about the introduction of core technologies, and they have to do this by themselves. “Although there are many challenges in the short term, China’s IT industry has given our generation this mission, and we must undertake this mission.”

During the time when Godson fulfilled its mission, an industrial chain of thousands of enterprises was formed around Godson, and an information industry system based on Godson was also gradually formed.

“Maybe we can’t say that we are strong now, but at least we are.” Despite continued international suppression and even domestic misunderstandings, chip practitioners have not relaxed their continued investment in improving China’s chip capabilities.

In fact, from 2020 to 2021, the Xinchuang industry will be increasingly valued by the state. With the favorable new infrastructure and dual-cycle policies, the basic hardware, basic software and industry application software of China’s IT industry are ushering in a wave of domestic substitution. Important industries such as oil, electricity, communications, and transportation will be particularly evident.

In addition to the opportunities brought by patent trolls, the increasingly prosperous environment of China’s Xinchuang industry and the rise of independent research and development capabilities of enterprises have also brought unprecedented pressure to the European and American chip industries that have long been dominant. After all, with the continuous advancement of China’s chip localization process, the United States, which monopolizes nearly 50% of the world’s supply, has long been unable to sit still. Under the passive situation of relying on the X86 instruction set, ARM instruction system, and Android’s AA ecology of the American company Widows for more than 20 years, Godson took the lead in breaking through this barrier.

Therefore, many chip practitioners believe that the malicious slander launched by patent rogue companies at this time is not a provocation to a company, but a provocation to China’s independent innovation.

But obviously, both Chinese chip companies and China Xinchuang Environment have made more efforts to resist malicious competition. After the country has set the goal of achieving a 70% chip autonomy rate by 2025, a number of semiconductor industry support policies have been launched one after another. Domestic scientific research institutions and technology companies such as the Chinese Academy of Sciences have also begun to work together to focus on the development of “stuck necks”. force.

Just as Yang Jiechi, director of the Office of the Central Foreign Affairs Commission, said in the Sino-US Alaska Dialogue three months ago: “History will prove that if you take measures to stifle China and take measures to suppress it, it is yourself who suffers in the end.”

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