Section 337 Investigation Sparks Fears of Patent War

US company iRobot claims six of its patents for robotic vacuum cleaners have been infringed

 

A recent Section 337 investigation application filed with the United States International Trade Commission marks the start of a "patent war" concerning robotic vacuum cleaners that is expected to affect the industry worldwide, industrial insiders said.

 

Leading manufacturer in consumer robots iRobot, headquartered in the US, filed the complaint against 11 rivals - including three from the Chinese mainland - in April, claiming they had infringed its six patents and requesting the commission to issue a limited exclusion order and cease and desist orders.

 

Pursuant to Section 337 of the Tariff Act 1930 of the US, the investigations launched by the ITC are often related to claims involving intellectual property rights.

 

As the largest robotic vacuum cleaner provider in the US, iRobot has roughly 300 patents granted on its home turf and more than 900 patents issued worldwide.

 

The patents include technologies for obstacle detection, autonomous floor cleaning and remote control scheduling for autonomous robotic devices.

 

"As a pioneer in consumer robots for the home, iRobot has invested significantly in the development of robotic technologies and the protection of our intellectual property," Colin Angle, chairman and CEO of iRobot, said in a statement.

 

Section 337 investigation sparks fears of patent war

 

"The filing of this litigation signals our commitment to protecting our investments," Angle said.

 

Zhou Nan, secretary general of the consumer electronics branch at the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, told Shanghai-based China Business News at a news conference in early May: "Generally, a Section 337 investigation involves two to three patents, yet this case concerns six, evidence that iRobot is well prepared."

 

"We encourage the Chinese companies to actively respond to the investigation," Zhou said. "Otherwise, they might be prevented from entering the US, a huge market with enormous potential."

 

One of them is Shenzhen Ilife Technology, which has exported its proprietary brand to the US.

 

The other two companies, Shenzhen Silver Star Intelligent Appliances and Suzhou Realpower Electrical Appliance, are original design manufactures for brands such as Hoover, Bobsweep and Black & Decker, the US and Canadian companies also involved in the investigation.

 

Liu Gang, a senior analyst with Iptalent Consulting, based in Beijing, told Chinese media: "Some outstanding ODMs are expanding their businesses, building proprietary brands and thus competing with previous collaborators, generally with their high-cost performance, which has significantly affected the market."

 

"The move of iRobot aims to elbow its potential competitors out," Liu said.

 

According to the company, iRobot has captured approximately 60 percent of the global robot vacuum cleaner market and generated $660 million in business revenue last year.

 

Yet its market leadership is challenged in China, where domestic manufacturer Ecovacs has held the No 1 position in recent years, with a market share of nearly 70 percent, according to Beijing Business Today newspaper.

 

To date, Ecovacs has filed more than 1,000 patent applications, including 120 international filings via the Patent Cooperation Treaty.

 

Data from market research firm GfK show that robot vacuum cleaners worth about 5 billion yuan ($735.85 million) were sold retail in China in 2015. The amount was forecast to rise to 7.5 billion yuan this year and 12 billion yuan in 2018.

 

Chinese brands accounted for 80 percent of the domestic market last year, where online deals contributed 89 percent of the total transactions in the country, according to GfK.

 

In China, a key market with growing opportunities for iRobot, Angle told CBN his company needs to improve its local teams for better management of distribution channels, especially in e-commerce.

 

A growing number of cost-effective China-made robot vacuum cleaners are popular with overseas buyers on major sales portals including Amazon, along with increasing exports from Chinese ODMs.

 

Currently, around 300,000 robot vacuums are exported to the US and Europe every month, a marked jump from some 50,000 units a year ago, China Electronics News reported.

 

By Zhuan Ti

zhuanti@chinadaily.com.cn


Source: China Daily