“Patent Trolls” Rampant in China’s LED Lighting Industry

News Source: 
Guzhen Lighting Weekly

Recently, 16 luminaire manufacturers in Zhongshan City in Guangdong Province were sued over patent infringements.

Patent trolls have been rampant in the modern LED luminaire industry, affecting many manufacturers, and highlighting the Chinese LED industry’s lack of intellectual property rights awareness and other shortcomings. Patent trolls strange conduct has confused many manufacturers, and made them victims.

The luminaire industry situation has even been made fun of and reflected in an absurd sayings: “If you succeed at copying, you will be powerful, especially if you are excellent at copying and no one sues you.” “Copying is the mother of creation.” “It is wrong to duplicate domestic manufacturers, but alright to copy foreign manufacturers.” These have been the strange talks in society. These manufacturers do not understand the importance of intellectual property rights, and are solely focused on profits. They hope to use a simple model, which is closely related to distribution channels.

For these manufacturers, being the underdog in prices and marketing channels is not a critical condition, but patent lawsuits affect their survival. Senior industry insiders have indicated, many domestic luminaire manufacturers have acquired market share through price wars, conceptual wars, distribution channels and other marketing methods. Even more manufacturers are just focused on costs and prices. After a new luminaire design is released, many manufacturers will be copying the same model in different places. Patents take a very long time to develop, and whether there is sufficient infrastructure, or lack of well-planned and effective strategic deployments all need to be taken into consideration. All these are related to the industry’s patent protection awareness, and patent features.

Some manufacturers are worn out by this cruel reality, but most manufacturers with strong will to survive are unable to leave their business behind. It is difficult to come up with a good design, and important to respect the product design and intellectual property rights, said Xueshan Cao, Director, R&D, Kinglong Lighting Factory. Only better design respect and defending intellectual property can manufacturers and businesses rights be protected. Without patent infringements, there will be no need to protect rights. Patent protection is just a measurement and not final outcome, the industry hopes patent protection and regulations can spur the markets positive developments, and allow for the emergence of good designs and products.  

Zhongshan City announced the launch of luminaire and other industry’s transition from “manufacturing” to “innovation”, from selling “products” to selling “creativity”. However, in the LED application field greatest shortages has been in optics, luminaire design, electronics, structures, R&D personnel, lighting application designers, and innovators (includes technology innovation and commercial models). Manpower shortages have been a major obstacle for luminaire manufacturers healthy developments. Company culture and management model is key to keeping talent, especially core talents stability will directly impact base employees’ stability, said Yongchen Yi, Chairman of Domin Lighting Industry Group. If manufacturers do not resolve the “personnel shortage” issue, despite the expanding company, or comprehensive industry chain, manufacturers will be unable to enter the chain.

From the lighting industry’s development history, luminaires integration with residential, architectural, home appliances, and light sources multifunctional industry. Manufacturers that want to quickly develop their R&D need to pick up pace.  In response to this, Cao shared his experience on intellectual property protection: Manufacturers can send their new product designs to the post office to acquire the time label and send it back to headquarters or oversea offices to acquire global patent rights. For highlighted products, manufacturers can acquire Chinese certification from Zhongshan Guzhen Chamber of Commerce to protect their products. Manufacturers should also apply for intellectual property rights, for instance through China’s Zhongshan Intellectual Property Protection Fast Track Center to quickly acquire intellectual property protection and patent authorization. Manufacturers should pass domestic and oversea customs and strengthen protection. As for luminaire manufacturers that are establishing their brand image, they should continue advancing their technology, create new designs and make better products to attract consumers.

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