Remember the old adage about the weather? Everyone’s talking about it, but nobody’s doing anything about it.
Well, the opposite is true of handset or even wireless service clones: Few are willing to talk about it, even when they’ve done something about it.
Two recent cases, one in South Korea, one in China, seem to reflect that action against cloners may well depend on the nature of the markets where legal remedies are sought. Solid insights are difficult, however, given aggrieved vendors’ reticence to discuss the issue.
Motorola Inc. last week announced that it had reached a settlement with South Korean vendor KBT Mobile Co. Ltd. in which the latter agreed to stop making and selling Razr look-alikes-or enabling other companies to do so-after the American vendor filed suit alleging infringements of patents, trademarks and designs. KBT had marketed its look-alike Razr in China, Hong Kong and Taiwan.
Motorola’s news followed a March report that the South Korean government recognized that cloning-defined as a device that is illegally programmed with an electronic serial number identical to a legitimate handset-exploded in the country last year. The South Korean government, citing the threat of identity theft rather than protection of intellectual property rights, offers up to 10 million won, or about $10,000 to those reporting on producers of clones.
“Around the world we are committed to protecting our investments,” said Motorola’s Yvonne Verse, vice president of global intellectual property management and licensing, in a terse press release on the matter, “and we are prepared to vigorously defend our innovations through enforcement of our intellectual property rights.”
Given several days to provide a spokesperson to address basic questions on the press release, Motorola declined at RCR Wireless News’ deadline to comment further. Issuing a press release in the United States-where Motorola leads in market share-may well have been directed at reassuring domestic investors potentially concerned about the integrity of Motorola’s brand as it pursues its fundamental challenge overseas to catch up to rival Nokia Corp., which dominates global handset market share.
A different and unrelated case in China was brought into stark relief by the announcement last week that Research In Motion Ltd., the Waterloo, Ontario-based company offering BlackBerry e-mail service, finally inked a deal to offer its service on China Mobile Communications Co. Ltd.’s network. The announcement, though expected, may have been hurried along by the news in late April that China Mobile’s state-owned competitor, China Unicom Ltd., would host an e-mail service, “Uni PushMail,” from vendor Facio Software Inc., reportedly founded by a Microsoft veteran named Tony Chan. The service is being marketed by Facio (though apparently not by China Unicom) as “Redberry” service, a blatant hijacking of RIM’s world-recognized BlackBerry brand.
After initialing responding to press inquiries-Jim Balsillie, RIM’s co-chief executive officer, told the Associated Press the ploy was “strange,” “brazen” and a “poke in the eye”-RIM also did not respond to requests for comment on whether it would pursue any legal remedies in China. A number of American companies, including Google and Microsoft Corp., have made news this year for refraining from challenging the Chinese government on piracy issues in their eagerness to get a foothold in the country’s vast market.
Despite a recent visit to the United States by Chinese President Hu Jintao, in which he reassured American officials that China was moving to protect foreign vendors’ intellectual property rights, no domestic initiatives have been issued, according to Sandy Shen, a Shanghai-based analyst with Gartner. “Despite the Chinese government’s recent assurances, we’ve seen no new domestic laws as a result,” she said in a telephone interview. “China has a less established legal framework for resolving these issues. If an international vendor can produce sufficient evidence to establish violations of intellectual property rights, they should pursue them.”
In late March, Chinese authorities in Shanghai did make more than a dozen arrests of vendors alleged to have sold clones of handsets by Samsung Electronics Co., Sony Ericsson Mobile Communications L.P. and Nokia.
Shen, perhaps inadvertently, gave an indication of local sensibilities on cloning-a term that seems to have disparate meanings in different markets-when she commented via e-mail on the Redberry issue and reports that China TechFaith Wireless Communication Technology Ltd. had displayed what appeared to be a direct clone of Motorola’s upcoming Q handset at CTIA 2006 in April. “It is common in the industry that vendors borrow concepts from each other if they prove to be well-received by the market. But it is my feeling that either [RIM and Motorola] cannot sufficiently prove the infringement, or the competition is too small to bother.” RCR
