Express Mobile Inc., an enterprise mobility solutions developer in the U.S., recently announced the filing of a patent infringement lawsuit against the Alibaba Group, a Chinese e-commerce company, in the United States District Court for the Eastern District of Texas, Marshall Division. In the statement, Express Mobile accused Alibaba for infringing its patent related to the development of websites.
The case has attracted worldwide attention. According to an inside-watcher, the patent is probably a fundamental patent in platform technology and it will probably extend to 100 more patents. ¡°Nowadays, more and more Chinese companies have listed in the US, while enjoying relative accommodative financial environment in U.S., they also have to face IPR risks.¡± Says this anonymous analyst. He suggests to Chinese that extreme thorough preparatory works should be made before IPO. Firstly, plan ahead. Always be ready to deal with possible patents litigations. Secondly, face it actively. Conduct further analysis on the extent of protection of the patent right and make preliminary estimation whether or not infringement is constituted. Meanwhile, they should also figure out what they really want.
On September 19th£¬ 2014, Alibaba¡¯s shares began trading on the NYSE at an opening price of $92.70 at 11:55 am EST. Alibaba¡¯s market value was measured as US$231 billion on its first trading day, and became world second largest internet company, topping Facebook.
However, Alibaba¡¯s IPR troubles follow up and it has to deal with frequent IPR disputes since then. ¡°Alibaba¡¯s troubles are not exception, most of the Chinese companies listed in U.S. have the same troubles.¡± Says Zhao Chengwei, an IPR attorney from Beijing-based law firm. Zhao analyzes that there are two reasons for this. Firstly, Chinese companies have broken the traditional pattern of U.S. market and the patent litigations have been regarded as important commercial competitive factors and marketing means by the rivals. Secondly, some patent operating companies want to obtain higher patent licensing fees by means of patent lawsuits.
¡°To answer the question mentioned above, Chinese companies should make thorough preparatory works. First and most importantly, no fear of lawsuits, hire at least one professional lawyer team as soon as possible. Secondly, make thorough investigation and analysis of the extent of protection of the patent rights and patent right stability. If infringement is constituted, never give up easily and prepare for the lawsuit actively.¡± Says Zhao Chengwei.
Meanwhile, He Jing, an attorney from a law firm named Anjie, suggests that in case of infringement, Chinese companies should negotiate with the plaintiff before litigation. Also, they should strengthen communication with other defendants to share the information and exchange coping strategies. ¡°Attack is the best method of defense. Chinese companies could also file patent cases against the rivals.¡± Says He Jing.
To those who prepare to be listed in U.S., Zhao suggests that two aspects of preparatory works should be made. Firstly, establish corporate patent early warning mechanism. Carry out patent retrieval in the shortest time and set up the corresponding countermeasures in case infringement constituted. Secondly, Chinese companies should establish patent layout strategy actively.
"Of course, to win the final dispute, Chinese companies should strengthen R&D investment and focus on technology upgrade. To avoid disputes, Chinese companies can sign patent cross-licensing agreements with the rivals or establish joint patent defense fund.¡± Says He Jing.