Innovation Race China’s Huawei crowned patent king in Europe

For the first time, a Chinese company came first in the number of patent applications in Europe last year. It’s a sign of China’s rapid drive into high tech.
Juggling innovation is a skill.

China’s bid to transform itself from the world’s workbench into a high-tech innovator has been underscored by Huawei applying for more patents in Europe than any other company last year.

The Chinese telecoms giant beat German industrial powerhouse Siemens by applying for 2,398 patents, according to the European Patent Office (EPO). Korea’s LG and Samsung came third and fourth. China is now among the top five patent nations in Europe following a 17 percent increase in Chinese applications.

Experts said Huawei’s ascent was not surprising. It’s been forging into western markets for a number of years and aims to become the world’s leading smartphone maker. Besides, it’s operating in an industry where technology and patents are crucial.

Huawei has made a name for itself with high-quality, affordable hardware. Its innovations include a chip capable of handling artificial intelligence apps such as automatic photo improvement software.

“China has said intellectual property is an important part of its strategic economic policy,” the president of the German patent office, Cornelia Rudloff-Schäffer, told Handelsblatt. “We have the impression that China is striving for innovation leadership in the top technologies.”

She said Chinese patent applications were on the rise worldwide and the quality of innovations being patented by Chinese firms has been steadily improving.

We have the impression that China is striving for innovation leadership in the top technologies. Cornelia Rudloff-Schäffer, president, German patent office

The country’s Made in China 2025 initiative is a bid to upgrade Chinese industry, which continues to suffer from uneven quality and efficiency. The emphasis is on innovation-driven manufacturing, green development and fostering human talent, according to the Center for Strategic and International Studies, a US think tank.

Chinese firms are targeting Europe for patent applications because it’s far cheaper than in the US to sue for patent infringements, and European courts are more likely to issue cease-and-desist orders, said Julia Schönbohm, an expert on patents at Linklaters.

“Patents can be enforced more effectively than in the US,” she said. And a patent infringement ruling in Europe has a big impact on firms in the global marketplace.

The EPO registered a record number of 166,000 patent applications in 2017, an increase of 1.9 percent. “The growing demand for European patents confirms Europe’s attractiveness as a leading technology market,” said EPO President Benoit Battistelli.

China’s success in filing patents coincides with fears in Europe of a sellout of sensitive technologies through Chinese acquisitions. Germany has been pushing the EU to take a harder line on foreign takeovers. The purchase by Chinese electrical appliance manufacturer Midea of Bavarian robot-maker Kuka in 2016 was particularly controversial. Kuka was regarded having strategic significance for the digitization of German industry.

Alexander J. Wurzer, a strategy consultant focusing on intellectual property, said China was in a “dramatic catch-up race” in the field of smart manufacturing, a key focus of German industry.

Axel Höpner is a Handelsblatt reporter in Munich. To contact the author: [email protected].