CCID Consulting's Viewpoints:
This news brings a clear signal that the European MPEC-2 Alliance is now brandishing the big patent stick, trying to make Chinese STB makers pay a large toll in their product exportation.
With the finalization of China's digital TV ground transmission standard, the relevant industry chains have been developing fast. It is precisely this reason that the European MPEC-2 Alliance, which owns core technology patents in this field, has paid growing attention to China's STB industry. The alliance has done so because it has seen the tremendous business opportunities in China's STB market.
This battle does not only involve the manufacturers concerned; it is also a war between two factions. In this standoff, Chinese enterprises leverage cost and price advantages as their weapon, while the powerful weapon for multinational giants are standards and patents. Statistics show that the average profit rate in the STB industry is now around 10%, namely about $2-3. The profit level of low-end machines is even lower. Even for STBs with multiple functions and high-added values, the level of profit per set is still no more than $4. If most of such profits are taken away in the form of patent fees, China-made STBs will be forced to withdraw from the European market altogether.
Regarding the above situation, CCID Consulting thinks that Chinese STB makers should adopt the following strategies to respond to the charging of patent fees.
1. Domestic enterprises need to band together and collectively engage in face-to-face negotiations with the European MPEC-2 Alliance. If Chinese manufacturers have infringed on the patent, they need to negotiate actively and properly solve the problem. If they have not infringed, they need to safeguard their rational interests and resist the abuse of intellectual property rights.
2. Step up efforts on core technology development. In the fiercely contested market environment, whoever creates core technologies will hold the rights for the product market and attain a monopolistic position. Therefore, stepping up core technology development and seizing market opportunities in a new round of competition has become an urgent need for manufacturers.
3. STB makers should pool together and jointly contribute funds to establish a third party company to conduct research on intellectual property as well as form collective negotiation and coordination mechanisms to deal with intellectual property. While pursuing synergy between industries and associations, STB makers need to implement intellectual property strategies and fully enter the fields of standards and patents.
