Saturday, March 11, 2006

The price of arrogance

The Fortune Magazine reports that "[o]n Feb. 10, Shenzhen's Netac Technology sued PNY Technologies of Parsippany, N.J., in federal court in Texarkana, Texas, alleging infringement of Netac's U.S. patent relating to USB flash memory drives. While the case may strike Americans as a man-bites-dog story -- a Chinese firm accusing a U.S. one of violating Chinese IP -- many specialists see it as a harbinger". But when the magazine's analysis focus on the lack of foresight from many American companies on China's swift industrial boom, what led them to miss the 30 months window that they have to file a patent in China after it has been granted in US, the success of their campaign to globalise the IP standards may explain a part of it. Having spent a considerable amount of money in lobbying for the internationalization of US IP standards, it seems (strangely) that this mega-companies have forgotten that IP rights are territorial rights. The situation described at the end of the Fortune's article, where an American company tries to collect royalties outside US from a domestic company on a US patent that it never got in that jurisdiction, is not completely new. Taking into account that those huge companies, as powerful as being the ones that dictated most of the US legislation on the topic and TRIPS, clearly can hire the legal expertise to know the basics of IP law (e.g. territoriality of the rights), ignorance cannot explain the described situation; arrogance could.

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