Chinese electronics company sues in U.S. courts to protect patent rights

Changzhou Asian Endergonic Electronic Technology Co., based in Changzhou, China, claims the retailers are infringing its patent on a design for the dashboard mounts by selling products made by a competitor. It wants cash and a court order to prevent further use of the design. The patent was issued in March.

The complaint, filed July 2 in U.S. District Court in Texarkana, Texas, reflects the rising use of the U.S. patent system by Chinese companies. U.S. patent applications by residents of mainland China, which excludes Hong Kong and Macau, surged 12-fold between fiscal years 2000 and 2008, according to the U.S. Patent and Trademark Office.

“The Chinese are becoming sophisticated enough to take advantage of the patent system in the U.S.,” said Brian Nester, a lawyer with Fish & Richardson in Washington, who often represents South Korean companies in U.S. patent fights.”You will see more Chinese companies filing suit in the U.S.”

Closely held Changzhou Asian aims to build a market in the U.S. and filed the complaint to deal with”the typical Chinese knockoff,” said Chad Nydegger, a lawyer for the company. It also is suing the manufacturer in China, accusing it of infringing two Chinese patents, Nydegger said.

Michelle Bradford, a spokeswoman for Wal-Mart, said the company hasn't been served with the complaint, and had no comment. Kelly Groeler, a spokeswoman for Best Buy, didn't return messages seeking comment on the suit. Nester said the case may be the first time a Chinese company has sued in the U.S. over a patent obtained by a Chinese resident. Lenovo Group Ltd., China's biggest maker of personal computers, has sued companies over patents it acquired when it bought International Business Machine Corp.'s PC division in 2005.

Nydegger, of Workman Nydegger in Salt Lake City, said Changzhou Asian, which makes Sianbag GPS mounts, lost a bidding war to a company, which he didn't name, that makes the Nav-Mat mounts sold by the retailers. He said his client is willing to negotiate with the stores.

“They were bidding against this other company that has copied their design,” he said.”Their goal is to capture U.S. market share.”

Nydegger said his client predicts there will be more patent-infringement lawsuits by Chinese companies in the U.S.

“The Chinese government is taking steps to assist companies into enforcing their patent rights both inside China and elsewhere,” Nydegger said.”My client's view is China is starting to emerge as a first-world country. There's been a significant influx of technology and they are starting to make improvements -- they are becoming innovators, not just copiers.”

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