In a patent infringement dispute with South Korean photovoltaic module manufacturer HanwhaQ-Cells (hereinafter referred to as “Hanwha Q-Cells”), Chinese companies won the final victory in the lawsuit.

A few days ago, Longji issued an announcement to disclose the latest progress of Hanwha’s prosecution of the company’s patent infringement. After an investigation by the US International Trade Commission, the company’s products did not infringe Hanwha’s Q-Cells patent rights and did not violate Section 337, terminating the investigation.

Jinko Energy, another protagonist involved in this dispute, also ushered in the same ruling.

In addition to Hanwha Q-Cells, American companies may be the protagonists of patent offense and defense.

On March 31 of this year, Solaria Corporation, a US photovoltaic module supplier, said it had filed a lawsuit in the Federal District Court for the Northern District of California, accusing Artes Sunshine of infringing its patent on shingle modules in the United States.

In the opinion of the industry, these lawsuits against Chinese photovoltaic companies are exactly the same as the anti-dumping and anti-subsidy investigations initiated by German photovoltaic manufacturing giant SolarWorld eight years ago-delaying the development of Chinese photovoltaic companies.

The business world has never been calm. After nearly 30 years of development, China’s leading photovoltaic companies have become leaders in terms of market share and technological innovation capabilities.

In the ranking of global module manufacturer shipments in 2019, eight of the top ten are Chinese companies. Among them, Hanwha Q-Cells ranked sixth, and American photovoltaic giant First Solar ranked eighth.
Patent war

Hanwha Q-Cells’ prosecution began early last year.

In March 2019, Hanwha Q-Cells filed a patent infringement lawsuit against China’s JinkoSolar, Longji and Norway’s REC in the United States, Germany and Australia.

Hanwha claimed that the three competitors used their patented passivation technology to improve the efficiency and performance of solar cells, and demanded that these companies be prevented from exporting infringing products to the United States, Germany, and Australia, and conducting marketing and product sales in these countries.

Subsequently, the United States International Trade Commission launched a “337 investigation” on China-related photovoltaic cells and their downstream products in response to the incident.

“337 Investigation” means the investigation conducted by the US International Trade Commission in accordance with Section 337 of the US Tariff Act 1930 and related amendments, prohibiting any unfair competition or any unfair trade in products exported to the United States.

In fact, China has become the biggest victim of the US “337 investigation”. In the related cases that have been judged, the failure rate of Chinese companies is as high as 60%, far higher than the world average of 26%.

Compared with court patent infringement litigation, the 337 investigation has the characteristics of convenient filing and rapid examination. If the 337 investigation finally adopts a general exclusion order, it will prohibit all similar infringing products from entering the United States.

It is worth noting that before the lawsuit was filed, Hanwha Q-Cells opened a 1.7 GW monocrystalline half-chip module manufacturing plant in Dalton, Georgia.

Coincidentally, its largest competitor in the international photovoltaic market, JinkoSolar’s new photovoltaic module factory in Jacksonville, Florida, also opened at the same time.

Since the launch of the “531 New Deal” in China, domestic photovoltaic companies represented by Jinko and Longji have intensified their efforts to expand overseas markets and become the strongest competitor of Hanwha Q-Cells.

For many years before, Hanwha Q-Cells was once the world’s leading manufacturer of photovoltaic cells. After 2013, the company has consistently ranked 4th or 5th among global photovoltaic module companies, and fell slightly to 2018, ranking sixth.

The strong rise of Chinese photovoltaic companies has obviously put pressure on other players around the world, including Hanwha Q-Cells.

In response to the “declaration of war” from Hanwha Q-Cells, Longji said that there is no evidence that the company’s related products infringed relevant patents. From a technical point of view, the technical methods adopted by Longji’s products are not consistent with the patents involved.

Subsequently, JinkoSolar also issued a public statement stating that “the company believes that these lawsuits lack technical or legal basis. Therefore, JinkoSolar opposes Hanhua’s allegations.”

In fact, it is not only Longji and JinkoSolar that have been suppressed by patents.

Solaria’s lawsuit against Artes requires the latter’s infringement compensation and permanent injunction. In response, Artus responded that the claims in Solaria’s complaint were unethical and unfounded.

Since the outbreak of the Sino-U.S. trade war in 2018, the United States has been making a big fuss about Chinese companies on intellectual property protection.

In the “301 Investigation Report” against China, the United States stated that after China’s accession to the WTO, it failed to fulfill its commitments in intellectual property protection and enforcement. Some practices in related fields have led to the forced transfer of technology from American companies to China, hurting the intellectual property rights of American companies.

China denies this. “People’s Daily” said in an article titled “Theft of Intellectual Property” out of nothing, China has both the ability to create intellectual property and the determination and action to protect intellectual property.

The road ahead

The patent litigation between Hanwha Q-Cells and Longji shares is only a microcosm of the situation of Chinese photovoltaic companies. The patent battle between Chinese companies and European and American companies started as early as 2010.

From the perspective of the industry, solar photovoltaic has always been one of the main battlefields of the Sino-US trade war.

As early as October 2010, in response to the issue of China’s clean energy subsidies, the former US President Barack Obama’s government announced the launch of a “301 investigation” on China’s clean energy policies and measures, and decided to request consultations with China within 90 days.

The Obama administration’s “301 investigation” against China covered 154 companies in China’s wind energy, solar energy, high-efficiency batteries and new energy automotive industries to find out whether the interests of related US companies have been harmed.

Since then, the US Trade Representative has made recommendations to President Obama that China’s wind energy subsidy program violates WTO rules. In December of that year, the United States announced the final decision of the investigation and filed a request for consultation under the WTO dispute settlement mechanism. Eventually China agreed to modify the content of the policy’s suspected prohibitive subsidies.

The field of solar photovoltaic cells is a typical capital and technology-intensive industry, and patent applications and patent litigation are extremely active. The United States has initiated multiple 337 investigations on patent issues related to photovoltaic products.

Over the past 18 years, the number of “337 investigations” cases has generally fluctuated and increased, while the majority of Chinese companies involved in the case are patent infringements.

What is more serious is that with the increasing awareness of enterprises’ independent intellectual property rights, the patent war has become an upgraded version of the traditional price war, technology war and marketing war. Not only determines the fate of the enterprise, but also triggers changes in the industry.

To fundamentally resolve the dilemma encountered by domestic enterprises in patent litigation, the first thing to do is to determine the actual scope of protection for the alleged infringement of patent claims and search for non-infringement defense evidence.

In this process, the industry associations were strengthened to respond to the complaint mechanism and solve the investigation problems they faced.

In addition, in order to avoid industrial patent disputes and promote the industrialization of patented technology as early as possible, it is particularly important to respect and share patented technology.

Liu Hanyuan, chairman of Tongwei Group’s board of directors, once emphasized that intellectual property rights must be supported and protected, otherwise the confidence and future investment of the corporate research team will be affected.

Liu Hanyuan also said that on the basis of respecting technology innovators, it is also necessary to actively promote licensing agreements to jointly promote cost reduction and product quality improvement.

In fact, China manufactures more than half of the components worldwide. China’s photovoltaic industry has already gone through the era of barbaric growth, but when Chinese photovoltaic companies enjoy the feast, they often ignore the hidden dangers caused by the lack of patent protection.

“Technical patent disputes have risen to the political level, or the technology has always been closed to the outside world, which is unwilling to see the entire industry.” Wang Wei, global general manager of DuPont Solar Solutions believes that an enterprise’s R&D investment is related to its contribution to the industry and itself The sustainable development of enterprises with intellectual property rights deserves respect.

Photovoltaics is one of China’s strategic emerging industries with international competitive advantages. In the context of the trade war, overseas intellectual property lawsuits facing photovoltaic companies may continue to increase in the future.

On this road full of thorns, only when you are strong can you be afraid of harm.