Rights protection plan aids global expansion

When a delegation from Nuctech flew to Singapore to participate in a project bid eight yearsago, they never expected to be hit with bad news as soon as the plane landed - a Europeancompetitor had filed a lawsuit claiming Nuctech's product for the bid violated its patents, thustrying to keep it out of the Singaporean market.
These days, such a patent dispute would not leave the delegation scrambling, for Nuctech haslearned to deal with many intellectual property "traps" during the past decade, includingantidumping duty and countervailing duty investigations and US patent interference proceedings,the company said.
Nuctech, based in Beijing, is a world-leading security inspection equipment and service provider.Founded in 1997, the company was often questioned by overseas customers in its early daysabout its capacity for innovation.
In 2001, for example, the company introduced its two mobile large container inspection systemsto the Turkish market, but prospective customers doubted a Chinese company could create suchadvanced products. Those doubts were put to rest when the customers visited Nuctech'sresearch and production base.
"As Chinese companies continue to grow, some developed countries are increasingly using theIP and international trade rules to fight us," said Chen Wei, vice-president of the company, who isprimarily in charge of the IP sector.
"During the process, Nuctech has gradually transferred the focus of its IP strategy from theprotection of market operations to the promotion of corporate innovation and businessdevelopment," Chen told Intellectual Property News.
He said the patent lawsuit in 2007 finally ended with a victory for Nuctech, as the company hadalready conducted comprehensive analysis of potential local patent infringement risks before itdecided to enter the Singaporean market.
"We also won the bid, which gave us more confidence to further expand the product's overseasmarkets," Chen added.
Overseas IP pre-warning analysis is part of the efforts Nuctech has made to continuouslystrengthen its patent layouts in international operations.
"The company has world-leading core technologies in the industry, and its scanners andmonitoring machines have been sold to more than 130 countries and regions, with overseassales revenue accounting for over 70 percent of the company's total. In addition, its major foreignrivals, who are concentrated in the United States and Europe, are adept at operating andmanaging IP rights," Chen said.
These factors required that Nuctech formulate a comprehensive and effective IP strategy to dealwith such challenges and gain a competitive edge amid fierce global competition, he added.
In recent years, the local IP agencies have become mandatory destinations for Nuctech's seniormanagers when they conduct investigations abroad. The company has also sent several IPmanagers to intern at overseas patent offices and agencies to gain experience, and thus helpimprove the quality and management capacity of its overseas patents.
Years of efforts have helped Nuctech win many IP lawsuits during its "going global" process.
In August 2011, for instance, the United States Patent and Trademark Office found that a patentapplication from a British research institute was similar to a Nuctech US patent.
To solve the problem, the US patent authorities applied the so-called interference proceeding, asystem used in US patent law, to determine which applicant was the first to invent.
At the time, the US still used the first-to-invent system, which meant companies or individuals whowere the first to invent the technology owned the patent rights.
"The patent involved was a very important one, so losing it would have caused a huge negativeimpact to the company in terms of internationalization," Chen said.
Thanks to its strong international patent layout and appropriate measures, Nuctech succeeded inmaintaining the patent rights in 2012, after investing financial resources and many hours ofmanpower into gathering evidence.

A model of Nuctech's security inspectionequipment for vehicles is shown at a technologyfair in Beijing.