Two emerging innovative dragons: An analysis of the IPR strategy of China's Huawei and ZTE

Abstract

China has been experiencing a historical take-off iin its use of intellectual property rights (IPR). This paper discusses the IPR strategy of two leading high-tech Chinese firms, Huawei and ZTE, analyzing how they are moving to global leadership in the telecom equipment market. Specifically, the paper addresses their IPR performance with respect to patenting and trademark registration in the most relevant global IPR systems. By 2008 Huawei had already reached world leadership in the international PCT patents applicants’ ranking, while in 2011 Huawei was substituted by ZTE in that position (with Huawei dropping to 3rd place). The paper shows how both firms have developed dynamic capabilities in innovation by investing strongly in R&D. This investment has reflected in a dramatic growth of patent applications. Even if a direct correlation between patent applications and capacity to innovate is not assumed, the growing demand for patents (and more recently trademarks) in different IPR systems reveals an aggressive technological and commercial stance of both firms on the global market.

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