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A vendor arranges made-in-China batteries in her booth in Shanghai. Seven Chinese battery makers are being sued by two American firms for infringing their intellectual property. They will be banned from the US market if found guilty.
Allegations by the United States against Asian battery makers for patent rights violations could block Chinese exports of an environmental-friendly battery there and cause a devastating impact on China's battery industry.
US battery giants, Energizer Co Inc and Eveready Co Inc, applied to the US International Trade Commission last month to investigate the patent right infringement of the mercury-free alkaline batteries made in China's mainland, Hong Kong, Japan, Singapore and Indonesia.
China is the world's largest manufacturer and exporter of primary zinc manganese battery with 75 percent of the output bound for overseas markets.
Last year, the output of alkaline batteries totaled about 3.5 billion pieces, and almost all of them were for export. Insiders say the prices of Chinese batteries are usually a third to a 10th lower than the American-made ones, making them very popular in overseas markets.
Seven mainland companies are named in the charge - Fujian Nanping Nanfu Battery Co Ltd, Zhongyin (Ningbo) Battery Co Ltd, Ningbo Baowang Battery Co Ltd, Guangzhou Tiger Head Battery Group Co Ltd, Sichuang Changhong Electric Co Ltd, Zhejiang 3-Turn Battery Co Ltd and Guangdong Chaoan Zhenglong Enterprise Co Ltd. All the companies declined to give comment regarding this issue.
The US International Trade Commission will launch investigations against the alleged battery makers on Wednesday.
According to US Section 337 of the 1930 Tariff Act, all goods, if ruled as violating American patent rights, are banned from being shipped to the United States.
The section could deal a heavy financial blow to the defendants because they would not be able to sell their goods there even if they wished to pay the royalty fees, lawyers say.
"It's unfair for domestic companies as most of them have paid for related technologies. But the problem is that the technology sellers are also on the defendants' list," said an official surnamed Cao with the China Battery Industry Association.
"The US companies are trying to keep competitive Chinese goods away, since they are eroding US makers' profits," Cao said.
Wan Zhengfu, a lawyer with Kroll Association (Asia) Ltd, said, "It's likely the outcome will be against the interest of the Chinese side since domestic companies don't own patent rights at the moment."
Wan acknowledged that it's possible the US companies want to use the act to defeat Chinese companies.
But he also cited Chinese companies not attaching much importance on patent issues which have caused them in this situation.
He urged that Chinese companies should learn from this case and protect themselves with legal rights to their product patents.
(Eastday.com May 24, 2003)
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