Monthly Archives: September 2011

Youyou Tu

Artemisia may not mean much to you nor Youyou Tu for that matter.

Dr. Tu – who was recently awarded the Lasker Prize – is the Chinese doctor who developed an artemisia-based drug therapy that helped saved millions of lives threatened by malaria. The plant has been known for more than 2000 years in China and used to cure diseases as different as hemorroids or malaria.

A little bit like the Internet, artemisinin is the result of a secret military research conducted after the 1950s in China which took time to spread across the world. It is now extensively used (together with another molecule) by the World Health Organization to fight malaria in the developing world.

I wouldn’t be surprised that ancient Chinese medical books help cure other diseases.

Patent 2.0

In China patents come in increasingly surprising forms.

Apple has recently secured Chinese patents on “some of the distinctive elements of its store designs”, including a glass dome. This rather unusual approach to intellectual protection derives in part from the recent discovery of fake Apple stores throughout the country – the one in Kunming looked so real that even the staff thought they were working for Apple.

It is of course quite far away from the more high-tech image that one can have from patenting activity. At the end of the day the technology component of a brand is often quite low.

Plugged

What is the big difference between China and the West when it comes to electric cars? Most Chinese citizens don’t live in private houses and therefore have to rely on external charging stations for their electric cars.

That’s why having a strong top-down approach to rolling out a new technology comes in handy. The State Grid Corporation - China’s (state-owned) largest electric transmission company – is rumored to thinking of introducing an electric pricing system for electric cars (in addition to those used for private, agricultural and industrial purposes) – not a small feat given the heterogenous technologies on the market and its evolutive nature. Help will be provided by the China Electricity Council’s efforts of standardization and by the arrival in the sector of other state-owned firms seeking to diversify.

Industrial policy does come handy at time – electric cars is one of China’s seven strategic emerging industries - something that must give some hope to firms like BYD whose prospects tended to look rather bleak lately.

Quid pro quo

The Chinese Internet sphere is once again the target of a tightening of rules in an attempt to clarify national security reviews of foreign investments in Chinese companies

Variable interest entities (VIE) – a scheme in which a Chinese company holds an operating license but control rests in foreign hands – is bound to come under increased scrutiny from the legislator. The hic? Some of the major players (including Google, Baidu, Sina, Youku or Renren) and thousands of smaller Internet players are using VIEs.

While giving more leeway to the regulator, this new rule is, in essence, not very different from the role played by the Committee on Foreign Investment in the United States (CFIUS) which has in recent years blocked Huawei’s acquisition of two US technology companies (2Wire and 3Com).

An IP culture in China?

Will 2011 mark the emergence of an intellectual property (IP) culture in China?

There are of course the usual suspects, Huawei and ZTE, who happen to rank among the top 5 global patent filers in 2010. But it seems that the two IP champions are building a following at the domestic level. According to Reuters, the number of IP civil litigation cases filed in China in 2010 rose by 37%. Where it used to be MNCs suing Chinese firms, the reverse is now happening – Huawei sued Motorola in a U.S. court – and Chinese firms are also going against each other – Huawei and ZTE are suing each other in a German court (!).

While a sure sign that there is some valuable IP to protect in China, it remains a bit early to rejoice. Having notably improved in the past decade the Chinese court system still requires some capacity-building. In addition, most of the patents filed in China would probably not qualify as inventions in foreign IP offices. But Rome wasn’t built in one day either.