Never underestimate China's ambition to shed its status as a technological backwater. This country is on the rise.

But the drive to internationalize China's technology sector has been overshadowed in recent years by a barrage of lawsuits against Chinese firms over intellectual property rights (IPR) infringements.

A number of these companies have had their rapid growth checked by foreign patent protection systems.

The Chinese developers of celebrated microprocessor Godson are alleged to have violated the IPR of US firm MIPS Technologies.

And the difficulties experienced by Huawei Technologies and GS Magic show just how hard it can be to build a technological powerhouse.

In other recent developments, some foreign companies are now claiming that they have a number of patents for TD-SCDMA, which refers to a 3G mobile communications standard developed in China.

Qualcomm, the pioneer of CDMA technology, says the two major 3G standards, WCDMA and CDMA 2000, are the same as 3G CDMA.

That means any technology with the "-CDMA" suffix, including the Chinese TD-SCDMA, theoretically belongs to Qualcomm.

Meanwhile Hitachi Global Storage Technologies (Hitachi GST) is extending its claims on hard disc drive patents to the realm of mini-hard disc drive technology.

Strengthening the industry

These moves have big implications for China's science and technology industry.

Chinese technology firms need to establish risk-management strategies to deal with possible lawsuits related to IPR disputes.

Companies need to be reminded that if they want to become global players, they must be ready to deal with legal hassles designed by foreign heavyweights to slow down their entry into the market.

IPR disputes or even lawsuits are nothing new for most global technology giants such as IBM, Samsung Electronics and LG.

Even IBM, a well-respected company, has been ordered by US courts to compensate other companies for patent infringements.

Few Chinese firms, with the possible exception of Shenzhen-based flash-disc drive manufacturer Netac Technology Co Ltd, are familiar with patent protection systems.

Netac has put together a tight patent network related to flash-disc drives and other technologies and is aggressively applying for patents in a range of sectors.

The firm has already brought Sony into the courts and is targeting a number of foreign giants.

This is a good example for other Chinese companies to follow.

They also need to take advantage of patent protection systems to fight back.

The tricky thing in the technology sector is that many IPR are highly subjective.

Proprietary protocols, for example, are a non-standard language developed by a single organization.

A number of companies are now using proprietary protocols to enhance competitiveness and become de facto standard-setters.

This is an understandable practice as long as it is legally sound.

But to promote competition, governments need to force those companies to open their proprietary protocols.

It won't be an easy job, but the Chinese Government has already started down this path.

The strong push for the implementation of WAPI (Wireless Authentication and Privacy Infrastructure) as a mandatory wireless encryption standard is a good example.

Although China has generally backed away from the implementation of WAPI, it was nonetheless a crucial bargaining chip for China when pressing the US government to ease high-tech exports.

The Chinese Government, together with domestic firms, need to push to set industry standards. This is the key to maintaining rapid growth in the country's technology sector.

In fact, don't be surprised if the WAPI initiative eventually falls back into favour.

(China Daily 08/08/2005 page6)