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.

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.

Interconnected

If anyone needs an additional proof that companies and financial markets are tightly integrated across the Pacific, just look at the movement of share prices in the IT industry following the announcement of Steve Jobs resignation as CEO.

On the one hand, shares of Apple’s direct competitors – Samsung, LG and HTC – rose by 1-2% on their respective stock exchanges. On the other hand, the shares of Apple suppliers – Hon hai/Foxcon, Wintek and Catcher Technology – fell by 4-6%.

The surprise came from the Hong Kong stock exchange where the shares of China Unicom – iPhone distributor in China – gained more than 10%, a reminder that second-guessing the reaction of investors is never easy.

Renew-able

After trusting the top spot for Foreign Direct Investment (FDI), China now leads the world in total investment in renewable energy with USD 50 billion.

The indicators listed in the report by REN21 are telling : in 2010 China was the top installer in wind turbines and solar thermal systems as well as the top hydropower producer. It added 29 GW of grid-connected renewable capacity. Renewables accounted for 26% of total installed electric capacity (18% of generation but only 9% of final energy consumption). China accounts for the world’s half of new installed capacity in wind power. It also leads the list of new capacity in solar hot water/heat.

The country plans to have 362 GW of renewable capacity installed by 2020 (the equivalent of 300 nuclear reactors), including 300 GW hydro, 30 GW wind, 30 GW biomass and 1.8 GW solar PV. Central government’s policy are complemented by initiatives at the local level. For instance, Beijing aimed to have 40% of electric power capacity by 2010 and Shanghai aimed to have 200-300 MW of wind and 10 MW of solar PV by 2010. The city of Lianyangang requires solar hot water in all new residential buildings up to 12 stories.

In spite of this major drive, renewable energy (including hydropower) only fills for 25% of its energy needs. The rest comes from nuclear 1% and thermal 73%.

A global mobile standard

 The chances to have LTE as a global standard for mobile telephony are looking better and better… at last

For sure it has taken some time to clear the Chinese 3G hurdle but business sense is prevailing again and there has been (almost) no loss of face with the  TD-SCDMA standard - Chinese engineers and politicians can rest their case.

China Mobile, who was “entrusted” with rolling out TD-SCDMA, is looking towards deploying LTE before the end of the year. The company has even joined its former strategic partner Vodafone for a pilot trial.

Two questions remain: when will the legacy technologies be decommissionned and who will get the royalties fees? Maybe industrial policy is not dead after all.