LED companies in China: cooperation and win-win response to international giants "encirclement and suppression" [full text]

Market Analysis With the continuous progress of global LED technology and the continuous promotion of related policies, the LED industry has become the next “gold mine” to be excavated. As an important production and manufacturing base of the global LED industry, the current trend of how Chinese LED companies take the initiative in global market competition has become a major issue for enterprises.

While the market is developing more and more vigorously, the problems of the LED industry in the fields of technology, patents, standards, and application fields are also becoming increasingly prominent. Global semiconductor patent disputes have continued, and the trend of disputes has begun to develop toward the mainland of China, and continues to increase. The patent cofferdam has become China's LED exporter's largest exporter of overseas markets. On the other hand, international lighting giants have taken their core patents and seized the Chinese market. Although China's LED industry has an advantage in terms of output and price, it is difficult to keep pace with international brands in terms of technology. Foreign brands are under heavy pressure and their patents are too heavy. The LED industry may even repeat the mistakes of the photovoltaic industry. In the face of patent pressure at home and abroad, how should China's LED companies break through?

Plan ahead to collaborate and avoid patent conflicts

At present, the core patent technology of LED lighting has been mastered by Philips, OSRAM, Nichia Chemical, Toyota Synthetic, and CREE. The five major manufacturers applied for a number of patents covering almost all of the entire industrial chain, including raw materials, automatic soldering machine equipment, packaging, and applications, and formed a monopoly through cross-licensing to form a patent pressure on domestic LED manufacturers. Once stepped on the "landmine area", the patent war will be triggered.

While China's LED industry is striding forward, more and more LED companies have also seen the stakes in patent protection, plan ahead, actively seek opportunities for cooperation with international companies, and use patent cooperation agreements to circumvent patent conflicts.

Zhen Mingli and Zhong Ming Semiconductor signed a patent cooperation agreement with Philips in February and April 2012 respectively. This allows the two companies to use all LED-related LED light sources and various patented light bulb technologies that Philips has opened to the industry. In October 2012, Taiwan's first-line chip maker Yuen-Yuan Optoelectronics announced the cross-licensing of its patents with Toyota Synergy. This move will also allow Sanan, a domestic LED company that has staked in Xunyuan Optoelectronics, to gain significant benefits. The company is expected to solve the patents currently faced by domestic companies. The bottleneck problem clears the way for its development in overseas markets.

In recent years, the layout of the crystal in the patent has also changed. Three years ago, Jingyin’s patented layout was passively circumventing patents that infringed upon others. However, in recent years, Jingyin has obtained core technology patents such as self-developed ACLED, HVLED, etc., gaining opportunities for cross-licensing with other international companies, and also let Jingyin The patent layout is more complete. It is reported that currently Jingdian has been cross-licensed with Japanese Toyota Synthetic.

Ensemble a breakout, cooperate and win together to deal with the giant "encirclement and suppression"

As an intangible asset of a company, patents are particularly important for the company's overseas market development. Today, patents have become a weapon of war behind the scenes among enterprises in various industries. Especially for export-oriented SMEs, one or more key LED patent technologies may determine the fate of the entire company. Industry insiders predict that in the next 2-3 years, it is very likely that foreign giants collectively sued local small and medium-sized lighting companies for patent infringement. Enterprises should raise their awareness of self-protection, and should adopt a “bunch” response approach through the establishment of relevant Alliances or agencies that investigate, collect, track, and analyze world LED technology and patents, establish LED patent databases, and provide timely reference to applications to all members of the alliance for research and development of new products, timely retrieval and updating, and establishment of early warning mechanisms to prevent infringement of alliance members. Others' patents.

Related industry sources believe that this is the right time to establish the LED patent alliance. The foreign core patents are about to expire soon. According to the patent law, the invention patent has a protection period of 20 years and the appearance patent protection period is 10 years. A group of LED-related patents that began to be applied in the early 1990s have been gradually introduced. Period or about to expire. The expiration of these patents will bring tremendous opportunities for the development of domestic LED companies. In addition, the current foreign patent barriers are heating up, and there are considerable hidden dangers. Domestic LED companies can strengthen strategic research through alliances, expand patent pools, integrate many patents, cross-license, and cooperate with each other, eventually forming a way to cope with the threat of international LED giants.

Wu Yulin, chairman of the Foshan Lighting Association, stated that when the current core technology of LED is held in the hands of countries such as Europe, the United States, Japan, and other countries, the company has established a patent alliance to strengthen patent strategy research. On the one hand, it can achieve reasonable patent distribution and prevent infringement. On the other hand, the establishment of the alliance, as the beginning of the strategic integration of LED industry resources in the region, the domestic LED industry will break through the bottleneck, accelerate the development of the LED industry, to obtain a number of autonomous intellectual property products, to deal with the international LED giant "Enclosures."

In addition, Wu Yulin believes that a perfect patent insurance system should be established as soon as possible. With patent insurance, since third parties have mediated patent infringement issues, companies can focus more on product R&D and operations. “Compared with large companies, this type of insurance is more important for small companies. In fact, smaller companies need patent insurance, especially those companies with only one or two patents. Once the defendant infringes, it is equivalent to losing the only patent. capital."

Seeking for breakthroughs to enhance their R&D capabilities

In recent years, domestic LED companies have been applying for LED patents in an endless stream. However, if you look closely, you will find that most of the patents are not original. They either pick up human teeth, make some repairs based on the original patents of the international LED giants, or are opportunistic. , Loop on utility models or designs. The degree of patent “shanzhai” is quite high, and the amount of gold is naturally also greatly reduced. Once a global large-scale lawsuit triggered by an international giant, there will be more than 70% of domestic patents will face the risk of failure.

To improve the level of patent allocation, fundamentally speaking, we must rely on the company’s own R&D and innovation capabilities. On the one hand, companies should continue to strengthen technological research and innovation, as a new lighting technology, LED lighting product quality determines whether the market can be healthy and sustainable development, determines the consumer's evaluation and impression of LED products, determines whether the terminal market Can really open. The importance of quality is self-evident, and R&D is the fundamental strategy for companies to ensure product quality from autonomous knowledge products. On the other hand, China's LED companies should also actively seek patent breakthroughs, improve and optimize their core patents, and look for breakthroughs in some of the relatively less-patented technology areas such as heat dissipation and electrostatic protection in the packaging industry. Its own unique patented technology seeks to negotiate with the giant LED industry capital, and then avoid the risk of being accused of infringement.

In addition, companies can also work together to promote the independent innovation capability of the LED industry by strengthening the cooperation of production, education and research. The absorption, mastery, digestion, and formation of independent innovation capabilities of enterprises determine the core competitiveness of enterprises. The combination of production, education and research is a direct and effective way to improve the innovation capability of enterprises. Enterprises through the formation of interactive alliances with relevant scientific research institutions, major universities, to seize the commanding heights of technology, a comprehensive layout of the patent system, promote the healthy, rapid and sustained development of China's LED industry.

At present, the global LED industry is in a “golden period” of development. In the face of a promising overseas LED market, Chinese LED companies urgently need to establish their own core competitiveness, rely on their own research and development capabilities, break through the international patent blockade, and ultimately help China. The LED industry has achieved a big leap from "manufacturing a big country" to "creating a big country."

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