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"Huawei's history of business and intellectual property development is a strong testament to the effectiveness of China's intellectual property system. ”
Source: IPRdaily Chinese Network (iprdaily.cn)
Author: Qi Baoxin, Intellectual Property Attorney, Professor of Intellectual Property Management Practice
Xie Peihong is a professor at the School of Business Administration, Shanghai University of International Business and Economics
According to a recent statistical report released by the World Intellectual Property Organization (WIPO), as of 2023, Huawei has ranked first in the world in the number of PCT international patent applications for seven consecutive years, far ahead of South Korea's Samsung and Qualcomm of the United States, which ranked second and third (based on 2023). At the same time, the total number of PCT applications from China has also ranked first in the world for five consecutive years.
Figure 1 The number of PCT patent applications filed by Huawei, Samsung, and Qualcomm in recent years
Behind the world's leading patent filings is a huge investment in R&D. According to a report released by the European Commission, Huawei's R&D investment in 2022 will be 20.9 billion euros, accounting for 24.3% of net sales, and its R&D investment expenses will rank fifth in the world after ALPHABET (Google's parent company), META (Facebook's parent company), Microsoft and Apple.
Figure 2 The top 5 global enterprises in terms of R&D investment spending in 2023
01. Huawei's patent application has been counterattacked
Looking at Huawei's history, we can see that Huawei's emphasis on patents has been throughout. As early as 1995, Huawei has established the Intellectual Property Department, when the understanding of intellectual property rights in domestic enterprises is still in the ignorant period, Huawei filed the first PCT international patent application in 1999, obtained the first authorized invention patent in the United States in 2000, and in 2002, the number of domestic patent applications officially exceeded 1,000, becoming the enterprise with the most patent applications in China. 1,000 patent applications is a difficult challenge and a distant goal, even for many of today's science and technology companies (as of December 31, 2023, the average total number of patent applications filed by 566 listed companies on the STAR Market is about 417).
In the 20 years since, Huawei has experienced major intellectual property events such as patent litigation with Cisco, Samsung, etc., signed patent licensing agreements with British Telecom, Apple, etc., and led the development of 5G technology and became a leading player. TODAY, HUAWEI HOLDS MORE THAN 140,000 VALID PATENTS WORLDWIDE, THE WORLD'S LARGEST 5G PATENTS, THE WORLD'S SECOND LARGEST 6G PATENT APPLICATIONS, AND THE WORLD'S LARGEST NUMBER OF WIFI7 STANDARD PATENTS.
Patents and R&D are inseparable, and Huawei's outstanding patent achievements are backed by equally leading R&D capabilities. According to Huawei's 2023 annual report, Huawei currently has 114,000 R&D employees, accounting for more than half of the number of employees, and has invested more than 1.1 trillion yuan in R&D in the past decade. In 2022, Huawei's R&D expenses alone exceeded the total R&D expenses of more than 500 companies on the Science and Technology Innovation Board. Massive R&D investment and patent applications have also brought real money to Huawei, with revenue from patent licensing alone reaching US$3.16 billion from 2015 to 2022. More importantly, it not only enables Huawei to maintain its technological leadership in traditional fields such as ITC infrastructure and terminal equipment, but also lays a solid foundation for Huawei's development of new fields such as cloud services, digital energy, smart photovoltaics, liquid-cooled supercharging, intelligent driving, and intelligent cockpits. Huawei's emphasis on independent innovation and continuous patent applications enabled it to finally break the technological blockade and eventually grow into a towering giant tree in the communications industry.
Why is it that an excellent company like Huawei is always keen to apply for patents? Why is it that scientific and technological innovation and patent application are always closely related and inseparable? How does the patent system stimulate and protect scientific and technological innovation? The relationship between the two may be answered from the story of mankind's first automatic weapon, the Maxim machine gun.
02. Makqin and machine gun patents
In 1894, there was a war in Zimbabwe with 50 British colonial police officers on one side and more than 5,000 Zulu warriors on the other. The ratio of 1:100 was enough to convince the people of the time that the outcome of the war was unforeseeable, but the end result was unimaginable to all - 50 British policemen were unscathed, while 3,000 Zulu warriors were forever dried in a pool of blood.
And the source of all this lies in the weapons used by the British police. The appearance of this weapon completely changed the shape of human warfare, its appearance made killing brutal and efficient, and also made human sea tactics meaningless. It brought supreme glory to the victors but also left endless sins, it was the first automatic machine gun in human history, the Maxim heavy machine gun.
In the early days of his weapons research, Makqin designed a variety of automatic rifles and pistols, but none of them were commercialized. In 1882, on the basis of the automatic mechanism designed by the American Gadlow, Makqin pioneered an automatic system that uses gunpowder gas energy for automatic circulation, and designed the world's first truly successful automatic weapon mechanism. In 1883, Maxim applied this mechanism to the Winchester rifle and achieved results, and then based on the experience gained from the rifle, he designed and built the Maxim machine gun the following year.
Figure 3 Makqin and his machine gun (picture from the Internet)
Since the emergence of the patent system in human society, every epoch-making invention may bring endless honor and wealth to its inventors. But there are many epoch-making inventions in human history, and their inventors did not apply for patents for various reasons, but Makqin, who used to be a businessman, is obviously not among them.
Makqin is very aware of the meaning and value of his inventions, and he is also well versed in the way of patents. Before publicly showing the Maxim machine gun to the world, he had applied for relevant patents in the United States, the United Kingdom and other countries and regions to ensure that his patents would not lose their novelty. Not only that, Makqin has also applied for patents for many machine gun design details and components, including canvas cartridge belts, setting up "patent barriers". Even from today's perspective, Maxim's patent strategy is undoubtedly successful and advanced.
Spanning more than 100 years of history, 130 patents applied for by Maxim are still searchable in patent databases, some of which can even be found in the patent texts of the time. In the end, with his far-sighted patent thinking, Maxim successfully used the patent of the Maxim machine gun to make a huge fortune, and became one of the richest inventors in the world at that time.
03. Why is there no solution to "Joseph Needham's question"?
We don't have a Maxim machine gun, but in the long history, we also have four major inventions, and we have also had brilliant science and technology. Why is it that in modern times, our science and technology and military affairs have lagged far behind those of the Western powers, and the country and nation have been reduced to their plates? Not only have the Chinese people have doubts, but the famous British sinologist Joseph Needham has also put forward the famous "Needham Question" -- Although ancient China has made many important contributions to the development of human science and technology, why did the scientific and industrial revolution not take place in modern China?
The author believes that scientific and technological innovation and intellectual property protection are twins, and if you look at intellectual property rights from a macro perspective at an altitude of 10,000 meters, you can see the national intellectual property policy management. Chinese civilization has a long history, and as one of the four ancient civilizations, we have never lacked the ability to innovate in science and technology, but we lack a system to protect and encourage innovation, and this lack may be the key to answering "Joseph Needham's question". What is the relationship between the intellectual property system and scientific and technological innovation? The answer to this question may be found in the link between the development of the patent system and the shift of the world's science and technology centers.
The phenomenon of the transfer of the world's science and technology center was proposed by Professor Mitsuaki Yuasa of Kobe University in Japan on the basis of the research of the famous British scholar Bernard, that is, if the number of scientific achievements of a country in a certain period of time accounts for more than 25% of the total number of the world at that time, then the country can be defined as the center of world scientific activities. In human history, there have been at least five significant shifts of science and technology centers: Italy (1540~1610), Britain (1660~1730), France (1770~1830), Germany (1810~1920), and the United States (1920~) have successively taken over the baton and become the palace of scientific and technological innovation in the world. It is very interesting to note that the occurrence of these five transfers is closely related to the development of the patent system.
The nearest center of the world's science and technology is the United States. Although the United States passed its first patent law in 1790, the U.S. patent system had its "darkest hour" in the early days. Due to the crisis of the world economy in the last quarter of the 19th century, there was some criticism and reflection on the patent system in the United States, and in 1890 the first antitrust law, the Sherman Act, was enacted, giving the courts a reason to prohibit large corporations from abusing patent rights. By the end of the 30s of the 20th century, the United States ushered in an unprecedented period of Great Depression. During this period, the patent system was seen as an accomplice to monopolistic behavior and was seen as one of the factors contributing to the economic crisis. This attitude of questioning patents was retained after the Second Century War, and patents were often invalidated by the courts until 1952, when the United States Patent Law was amended to improve the basic framework of modern American patent law. On the whole, although the patent system in the United States in the 20th century experienced some twists and turns, it still effectively promoted the scientific and technological progress and development of the United States, making the United States the current center of science and technology in the world.
The mainland's patent system sprouted during the Guangxu period. In 1898, the Qing government promulgated the "Regulations for the Revitalization of Craft Awards", but with the failure of the "Hundred Days Restoration", the first attempt at the patent system in mainland China also failed. The Patent Law of the Republic of China promulgated by the Nationalist Government in 1945 was the first patent law promulgated in the history of the mainland. After the founding of the People's Republic of China, although the mainland successively promulgated the "Interim Regulations on the Protection of Invention Rights and Patent Rights" and the "Regulations on Inventions", it was not until the official promulgation of the "Patent Law of the People's Republic of China" in 1984 that the mainland's patent system was on the right track. From the birth of the British Monopoly Law to the promulgation of the Patent Law of the People's Republic of China, the mainland lagged behind the West in terms of patent system for more than 300 years. What the absence of 300 years has brought us is clear to everyone who knows China's modern history.
From the perspective of the phenomenon of the transfer of the world's science and technology centers and the development of the patent system, there is a clear correlation between the two, and the author believes that this can answer the "Needham question" to a certain extent, that is, China's lack of patent system may be one of the reasons why we have gradually degenerated from a glorious country with four major inventions to a modern sword.
04. If you don't pay attention to intellectual property rights, don't talk about the right to speak in the world
Mr. Song Liuping, Huawei's Chief Legal Officer, once said: "Today's world pattern is that US patents are the price of diamonds, European patents are the price of gold, and Chinese patents are the price of cabbage and radishes. ”
Why is there such a big gap between China's patents and the developed countries in the world? This starts from the fact that China has lacked awareness of patent protection and a patent protection system since ancient times.
The Maxim machine gun is inseparable from gunpowder, and gunpowder is one of the four great inventions of China, and not only did we not charge foreign countries patent fees for gunpowder, but in turn, they used gunpowder to invade our country. China's long-standing lack of a patent system has not only brought about the decline of the modern state and nation, but also deprived us of the possibility of collecting patent fees from the world at the height of scientific civilization, so as to further maintain and expand the leading edge in science and technology.
Compared with the Maxim machine gun, which was born with original sin, China's four major inventions were born earlier and had a greater impact on human society. The theory of the four great inventions was first put forward by the British sinologist Joseph Needham mentioned above in 1943, and before that, Bacon's "New Tools" (excluding papermaking) was the most widely circulated. Since then, some scholars have believed that silk and porcelain should also occupy a place and be combined into the "six great inventions". British Chancellor of the Exchequer Jeremy once proposed that pottery (14,000 BC) and shovels were also the six great inventions of China. Among all kinds of theories, it is the four great inventions mentioned by Joseph Needham that are the most widely circulated, and the world's recognition and acceptance are the highest.
The period of the origin of the four major inventions was at least 500 years before the promulgation of the Venice Patent Law, and at that time, there was no patent system in China or the world, and the free outflow of the four major inventions was an unstoppable trend. Papermaking was introduced to Japan via Korea in the early 5th century, but during the Battle of Talas in 751 AD, several mainland papermakers were captured in war, and the technical secrets of papermaking were forced to flow into Arabia. Subsequently, in the 12th ~ 13th century, papermaking was introduced to Europe by the Arabs. Printing was introduced to Japan in the 8th century with Tang envoys, and then to Korea and the Middle East, and to Europe in the 14th~15th centuries with the rise of the European Renaissance. Gunpowder was introduced to Arabia in the 13th century, and the Mongol conquest led to the introduction of gunpowder and firearms to Europe during the same period. The compass was introduced to the Arab world and Europe in the 12th century, and became widespread in Europe.
Fig.4 Outflow of the Four Great Inventions (based on Pan Jixing's Four Great Inventions of Ancient China: Origins, Transmission and World Influence)
It can be found that the four major inventions were very close to the birth of the Venice Patent Law when they entered Europe. In addition, unlike today, the monopoly patent system in the early days did not focus on the technical aspects of the product, and as long as it was a product or technology that had not been used in the country, whether it was a new invention or imported from abroad, it could be patented. In fact, most of the early patents were granted to foreign businesses that introduced new products to their countries. For example, a number of early UK patents were granted to foreigners who imported textile technology to the UK.
At that time, would Westerners apply for their own patents for the four major inventions that belonged to us?
Combined with the purpose and nature of the early patent system and the clues of the patents related to the four major inventions, it may be reasonable to suspect that Westerners at that time could have applied for their own patents for the four major inventions of the mainland. Objectively speaking, the Chinese society and even human society at the time of the birth of the four great inventions did not have the conditions for the birth of the patent system, and even if there was a patent system, with the production capacity, political system, information dissemination capacity, and document preservation ability of the society at that time, the patent system may not be able to operate normally. If we had already used the ruler of the patent system at that time to collect licensing fees from the whole world by virtue of the four great inventions, would China have always maintained its leading edge and continued the glory of an ancient civilization? Would China's modern history be different? Will the humiliation suffered by the Chinese nation in modern times be rewritten?
The Maxim machine gun and the four great inventions, the same invention and creation, but have a completely different fate. The former made its inventors earn a lot of money, fame and fortune, while the inventors of the latter could hardly even find a few words in the history books; the former effectively enhanced the military strength of Western countries, while the latter made a wedding dress for the development of civilization for all mankind; the deeds of the former greatly stimulated the interest of other inventors at that time in the research on the improvement of the Maxim machine gun, which made the development of automatic weapons enter a high-speed period, and also inspired the enthusiasm and motivation of future generations to pursue innovation and progress in other fields, while the appearance of the latter did not stir up greater waves in China's scientific and technological development。 The root of the difference lies in the fact that behind Makqin is the strong support of the intellectual property system for scientific and technological innovation, and the continuous scientific and technological innovation is transformed into the improvement of national competitive advantage and comprehensive national strength, and finally evolves into a dimensionality reduction attack of one civilization against another civilization at the level of science and technology and military affairs.
Today, the Patent Law of the People's Republic of China has been amended four times, and China's patents have been created from scratch, and in 2023, the number of patent applications filed in the mainland has ranked first in the world for many consecutive years. But behind this, the quality of patents in mainland China is far from the world's first-class level. Junk patents and irregular patent applications are by no means uncommon in the patent world, and too many patents are applied for the sake of application, and granted for the sake of authorization, which has long been detached from the essence of protecting innovation.
"Innovation is the first driving force to lead development, and the protection of intellectual property rights is the protection of innovation." The intellectual property system is not only a law, but also a system design, which aims to guide and encourage people to give full play to their wisdom and talents in all walks of life and fields, and contribute to the progress of scientific and technological civilization and spiritual civilization of the whole society, the world and all mankind.
Huawei's history of business and intellectual property development is a strong testament to the effectiveness of China's intellectual property system. Today's intellectual property system is not only a tool to protect the intellectual property of individuals, but also a powerful weapon for scientific and technological competition between major countries. In the face of the "technological bottleneck" and "decoupling of science and technology" of Western hegemony, we must take the sustainable path of innovation-led high-quality development, and promote the development of new productive forces with scientific and technological innovation, so as to achieve the great rejuvenation of the field of science and technology.
(Original title: Huawei's patent application is "far ahead" in the world, do Chinese companies have the right to speak in the world?)
Source: IPRdaily Chinese Network (iprdaily.cn)
Author: Qi Baoxin, Intellectual Property Attorney, Professor of Intellectual Property Management Practice
Xie Peihong is a professor at the School of Business Administration, Shanghai University of International Business and Economics
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