Asia Is Getting Its Own Patent Police

For most of its six years, Xiaomi didn’t worry much about patents. The Beijing company built its business selling cheap smartphones in China. But as the country’s economy slows and rivals nip at its market share, Xiaomi is trying to expand overseas, giving it a greater incentive to grab hold of intellectual property. In June it bought about 1,500 wireless, cloud, and multimedia patents from Microsoft for an undisclosed price. “If we find ourselves in litigation,” says Hugo Barra, Xiaomi vice president of international, “we will use our IP portfolio to defend ourselves.”

Xiaomi is among a growing number of Chinese companies—PC maker Lenovo, screen maker BOE, appliance maker Midea—“looking to get their hands on good, solid IP that can be used against multinationals,” says Guy Proulx, chief executive officer of advisory firm Transpacific IP Group. “Used against” often means extracting fees via angry letter, negotiation, or lawsuit. It’s a shift for Chinese companies, which have more often been the defendants in patent suits. They’re catching up with a trend in Japan and South Korea, where government-backed funds are fighting on behalf of big tech companies’ IP.