China’s Xiaomi Building Patent ‘War Chest’ in Preparation for U.S. Launch

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Xiaomi international head Hugo Barra said on Thursday that the Chinese electronics company is looking to file more patents and strike more deals ahead of a launch into the U.S. market.

The move is essential if Xiaomi really wants to play in the U.S. and Europe, where intellectual property issues are taken seriously.

Barra said at the Code conference that Xiaomi was laying the groundwork for an eventual entry into the U.S. market, but gave no time frame. Industry watchers have said that it would need a far stronger patent position to do so.

The company has thus far stuck to markets like China and India where patents tend to be less strictly enforced. Even so, Xiaomi is already being sued by Ericsson, and it is expected the company would face legal action from others were it to enter more developed markets.

Xiaomi has already filed for 2,000 patents, Barra said in an interview with Bloomberg TV.

“Think of it as, like, a war chest of sorts,” Barra said, adding that the company is also systematically taking patent licenses, especially for standards-essential patents.

“Basically, there’s two things that we’re doing — and which take time,” he said. “One is systematically taking patent licenses — around the world. You know, if it’s a patent and it’s an essential patent then, of course, it needs to be licensed. Secondly, we’re building our own portfolio of patents, you know, for defensive purposes because you kind of have to have that.”

There are two types of patents that are important: Those held by companies like Nokia, Ericsson, Qualcomm and others related to wireless standards, and those covering design and features on modern smartphones. In the Apple-Samsung case, for example, Apple sued over the latter type of patents, alleging Samsung’s designs and features too closely resembled the iPhone.

Even if Xiaomi takes licenses for standards-essential patents from Ericsson and others, it still could face the type of legal action that Samsung faced from Apple.

In the interview, Barra also downplayed the notion that Xiaomi is simply an Apple copycat.

“So this whole copycat melodrama all boils down to one chamfered edge on one particular phone model, which was Mi 4, which people said looked like the iPhone 5,” Barra said. “And I’ve been the first one to admit it. Yes, it does look like the iPhone 5. And that chamfered edge, by the way, is present in so many other devices.”

Not everyone agrees that the similarities end there, a debate that could spill over into the courts if Xiaomi follows through on its promise to launch here.

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