Joint patents with China pose pitfalls in U.S.-led decoupling

Nikkei Asia ^

[FarCenter]

TOKYO -- The increasingly global nature of intellectual property development could provide Beijing some protection from the U.S.-led push to cut China out of supply chains, as companies worry about losing access to key technology in such areas as electric vehicles.

American entities jointly applied for 125 patents in China with Chinese universities or companies over the three years through 2022. Japanese-Chinese joint applications were close behind, at 115.

Though U.S. and Japanese applicants account for fewer than 1% of all patent filings in China, many cover advanced technologies in areas such as batteries, telecommunications or key industrial metals, for use in electric vehicles or smartphones. Around 40% have dual-use potential, meaning they could have military applications.

Chinese law treats any joint filings involving Chinese nationals or organizations, even those with foreign partners, as Chinese technology. If Beijing retaliates against Washington's export restrictions on advanced technology with similar measures of its own, companies with such patents could find themselves unable to develop or produce technology using them outside China.

Many of the Japanese filings involve automobiles. Toyota Motor leads the pack with around 30, centering on core technologies for next-generation vehicles such as autonomous-driving control systems and fast-charging batteries. Hitachi has about 10, including self-driving technology and EV charging systems. Both submitted a number of applications with partners like Tsinghua University.

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Competition between the U.S. and China for cutting-edge technology -- a central part of their greater rivalry -- is growing, as both sides tap legislation and export curbs to gain an advantage.

China has become a major intellectual property player in recent years, producing more patent applications than any other country since 2011. It is also weaponizing IP, with the number of patent infringement suits against overseas companies growing 150% from 2019 to 2021.

A Chinese business sued Apple in 2012, claiming that the U.S. company's virtual assistant Siri infringed on its artificial intelligence-related patent, and the two have been locked in a legal battle ever since.

Chinese courts have upheld the patent's validity in a blow to Apple, which could be forced to stop producing and selling products loaded with Siri in China depending on how the case plays out.