“Sister Yutong, everyone, this is the finalized exterior design for the first-generation prototype of Longyao Mobile.” As she spoke, Yu Xin advanced through the PPT, displaying more details of the phone.
“Isn’t this design a little too similar to… well, you know?” Yang Xin hesitated before voicing the question on everyone’s mind.
“You mean an iPhone?”
Yang Xin nodded.
“A few days ago, I saw some leaks online. Aside from the logo, our phone looks almost exactly like the new iPhone shown in the leaked photos. General Manager Yu, can you explain that?”
Yu Xin smiled. “It’s very simple. The exterior design patent for Longyao’s first-generation phone was registered before the iPhone 4’s exterior design patent.”
Her words were shocking.
For a moment, everyone in the meeting room thought they had misheard her.
What did she mean, their phone’s exterior design patent had been registered before the iPhone 4?
Did she mean what they thought she meant?
Seeing the confusion on everyone’s faces, Yu Xin smiled and said, “Yes, it means exactly what you think it means. Literally.”
“Hiss…”
Everyone’s eyes lit up.
Now this was interesting. Very interesting.
Back when Liu Yutong had chosen to have someone register the phone’s exterior design patent, she hadn’t told anyone about it.
Yu Xin had only found out after taking over the phone project. Sister Yutong had actually prepared the phone’s design drawings long in advance.
At first, Yu Xin hadn’t paid much attention. She had assumed Sister Yutong simply wanted to give the first-generation phone a distinctive appearance.
That was, until the leaked photos of the iPhone 4 began circulating online.
She was stunned.
Sister Yutong really was something else. She had somehow known the iPhone 4’s exterior design ahead of time.
Even more astonishingly, when had Sister Yutong planted a mole inside Apple? Not a single member of the Wanlong Society, including those close to Yu Xin, had known about it.
It was simply incredible.
What was even more amazing was that they had managed to register the exterior design patent before Apple had even finalized its own design.
It was nothing short of a divine move.
Yu Xin could already imagine the enormous media storm that would erupt next year when the iPhone 4 was officially released and collided head-on with Longyao’s first-generation phone.
“Holy crap! Our phone’s exterior design patent was registered before the iPhone 4’s! That’s insane!”
“I’m suddenly looking forward to Apple’s launch event next year.”
“Same here!”
“Plus one…”
The meeting room erupted with excitement.
This was Apple they were talking about—one of the hottest technology companies in the world in recent years. Ever since the release of its first-generation phone, the company had attracted countless eyes. The entire industry was holding its breath, waiting for the next revolutionary product.
After leaks of the iPhone 4’s exterior design surfaced, who knew how many people had already prepared their money and were waiting for the phone to be released?
Everyone present was an experienced businessperson. They all knew what this exterior design patent meant.
It meant that if Apple wanted to enter the domestic market, it would have to either obediently pay licensing fees, change the phone’s design and start over, or face Apple’s day in court and risk having the phone forcibly banned from sale.
Any of those options would be a devastating blow to Apple.
Paying licensing fees would mean admitting that it had copied someone else’s design.
Changing the exterior would mean that an entire year of preparation had gone to waste. There would also be the problem of what to do with all the phones that had already been manufactured.
And if the phones were banned from sale, the losses would be equally enormous.
“General Manager Yu, did you only register the basic shell design, or did you also…” Yang Xin couldn’t help pressing for details.
“Domestically, we registered every exterior design element we could think of. That includes the rounded-rectangle body, the single physical button on the front, the arrangement of the rear camera and flash, the layout of the side buttons, the symmetrical openings on the bottom, and even the flip-top structure of the packaging box. We registered all of it.”
“Overseas, we also applied for exterior design patents through offshore companies in the major markets, covering the key countries and regions across both the Eastern and Western continents.”
“How much did it cost?”
“The patent application fees themselves weren’t particularly high. The real expense came from the breadth of the patent strategy and from defining the scope of protection for every individual detail. That required the legal and design teams to repeatedly discuss and refine everything.”
“The total cost was roughly twenty million.”
When they heard that it had cost only twenty million, everyone in the room could no longer sit still. They began exclaiming that the money had been incredibly well spent.
What was twenty million?
Once the iPhone 4 was released, the licensing fees or compensation alone could amount to tens of billions.
To give everyone a more direct sense of the differences—or rather, the similarities—between the iPhone 4 and Longyao’s first-generation phone, Yu Xin switched the presentation to a comparison image.
On the left was a rendering of the Longyao phone. On the right were several leaked photos of Apple’s new phone, collected from various sources.
The two images were placed side by side. They couldn’t simply be described as similar. Once the logos were covered, they were practically identical—even the curvature of the buttons and the number, spacing, and arrangement of the openings on the bottom matched perfectly.
“Interesting. This is really interesting.”
“Then can’t we strike first? The moment Apple dares to release its new phone, we can sue them for infringement. We’d have the upper hand in the court of public opinion from the very beginning.” Lin Muyang was visibly eager to make a move.
Zhao Tianyi nodded. “It’s not just a matter of suing them for infringement. Exterior design patents fall under the category of industrial design patents, and their protection period is roughly ten years. If Apple releases a product with an exterior design that substantially overlaps with our patent without knowing about it, we can apply to the court for an injunction prohibiting them from selling the infringing product in the relevant markets. If that injunction is granted, it will deal them a devastating blow.”
“Most importantly, Apple’s great myth will be shattered overnight. Jobs would never tolerate having his reputation ruined.”
“I’m really looking forward to seeing the expression on his face when he finds out he copied someone else’s design! Hahaha…”
In China, exterior design patents generally undergo only a preliminary examination. They are not subjected to a substantive search. As long as the application meets the formal requirements, it is approved.
Only when two patents come into conflict do the authorities go back and determine which one was filed first. For exterior design patents, priority is determined by the application date. The rights of the patent filed earlier take precedence.
Even in the West, there is a patent examination period during which related patents cannot be found through searches.
Liu Yutong had also made arrangements in this regard. Not only had she arranged for the patent examination period to be extended, she had deliberately filed the exterior design patent under other classifications rather than under mobile phones.
It was an especially underhanded move.
When Apple’s lawyers handled patent registration, they would normally search databases related to mobile-phone patents. But if the design patent wasn’t filed under the mobile-phone category, they could turn the database upside down and still never find it.
They would have to search in completely unrelated fields before they had any chance of uncovering this exterior-design “bomb.”
So Apple was bound to step on the land mine.
Of course, even if Liu Yutong had registered the patent overseas in advance, that did not necessarily mean they would be able to do anything to Apple.
After all, things are different at home and abroad.
“Domestic matters are easy enough to handle, but what about overseas?” Yang Xin happened to raise the key question.
“The rules overseas are different. When it comes down to it, the intellectual property litigation environment in those countries is influenced by politics, and they’re experts at playing dirty. My suggestion is that we enforce the restrictions domestically for the short term, while completely opening things up overseas. Unless they stop suppressing our products and chips, we can freely license the design patents to them as a bargaining chip.”
“That’s what you call making progress together!” Zhao Tianyi said with a laugh.
“I think that works.” Zhang Dalong was the first to voice his support.
“I agree,” Ma Da said with a nod.
“Agreed!”
“Agreed +1.”
“...”
