Power of intellectual property boosts ZTE’s business in Europe and North America; ZTE’s 3,906 patents greatly exceed other telecommunications vendors

21 March 2013, Shenzhen, China – ZTE Corporation (“ZTE”) (H share stock code: 0763.HK / A share stock code: 000063.SZ), a publicly-listed global provider of telecommunications equipment, network solutions and mobile devices, was ranked first in international patent applications by World Intellectual Property Organization (WIPO) in 2012, the second consecutive year the company achieved top position in the annual gauge of the world’s most prolific innovators.

According to WIPO’s data, ZTE filed applications for 3,906 patents under the Patent Cooperation Treaty (PCT) in 2012, 37 percent more than a year earlier, making it the first company from China to top the tables for two successive years. ZTE’s patent applications in 2012 were more than double the total of Huawei Technologies(1801), and greatly exceeded other companies in the telecommunications equipment industry such as Ericsson(1197), Nokia Siemens(326) and Alcatel-Lucent(346). Japan’s Panasonic, ranked second by WIPO, filed for 2951 patents, almost one thousand fewer than ZTE.

ZTE’s PCT filings in 2012 were 37 percent more than a year earlier, according to the data from WIPO. In 2011, ZTE was also ranked top by WIPO with a total of 2,826 filings. At the end of 2012, ZTE has filed applications for more than 11,000 PCTs, covering markets including the United States, the United Kingdom, France and Germany. More than 60% of ZTE’s filings were related to new technologies such as 4G/LTE, cloud-computing, the Internet of Things, and smart devices.

"It is a landmark achievement for ZTE, which is a standard-bearer for Chinese companies with international operations and a culture of innovation,” said Mr. Zhao Tianwu, Director of Intellectual Property Center at the Ministry of Industry and Information Technology. “Faced with pressure in its operations last year, ZTE’s unwavering commitment to research and development showed the company’s courage. We need to foster more Chinese ICT companies to emulate ZTE, and collectively accelerate China’s development as an innovative nation.”

"In the past two years, ZTE experienced explosive growth in PCT filings,” said Mr. Guo Xiaoming, 　Chief Legal Officer at ZTE. “As a relative late-starter, we still have a lot of room to improve in our intellectual property strategy. The tremendous growth in ZTE’s patent applications has been important in safeguarding the development of our operations in Europe and North America.”

It generally takes between two to three years for patents to be granted after applications are filed, and the cost for each patent is over RMB100,000. A company’s portfolio of PCTs represents its most valuable intellectual property. By 2015, it is expected that thousands of ZTE’s PCTs will be granted in Europe and North America. ZTE’s portfolio of PCTs has become a powerful resource as the company’s international operations grow.

Following the practice of our international counterparts, ZTE will explore avenues such as patent pools and licensing to generate increased value from our rich portfolio of domestic and international patent assets. The company will work with intellectual property exchanges, intermediaries and industry organizations to promote healthy competition and development in the sector.

ZTE has a long-held commitment to technology innovation, devoting 10% of annual revenue on research and development each year. In the face of pressure in its business operations, ZTE nevertheless increased its R&D spending by 3% to 9 billion RMB last year. In the past four years, ZTE has committed more than 30 billion RMB on R&D. At present, ZTE has 18 R&D centers globally, employing more than 50,000 engineers and technical staff. ZTE has also set up innovation facilities jointly with internationally leading telecommunications operators to further strengthen its R&D resources.

ZTE is one of the leading patent holders among vendors in the telecommunications industry internationally, having filed applications for 48,000 patents globally, with more than 13,000 patents granted. More than 90% of ZTE’s patents are invention-related, including a large number of basic patents covering international telecommunications technical standards and core patents covering essential telecommunications technologies. ZTE is the most-decorated company in China in technology innovation, capturing national awards including four China Patent Gold Awards, 12 China Patent Awards of Excellence, and four Major Invention Awards.