In March 2026, Japanese patent licensing firm IP Bridge initiated a Standard Essential Patent (SEP) lawsuit against Geely Auto in the Rio de Janeiro State Court, Brazil. Earlier, the same firm had secured a preliminary injunction in Brazil against a domestic automaker using the same patent, a move that effectively pressured the automaker into settling with the Avanci patent pool—a key entity behind IP Bridge. This litigation strategy, leveraging Brazil’s expedited ‘fast-track’ procedures, appears designed to suppress Chinese automakers through unilateral applications for preliminary injunctions, exploiting procedural loopholes for competitive advantage.

Recent public disclosures reveal that Geely’s appeal against this preliminary injunction has garnered support from Brazilian courts, which suspended its enforcement. By deploying a multifaceted defense—combining technical rebuttals, procedural challenges, and public interest arguments—Geely disrupted the industry’s entrenched pattern of ‘injunction-driven settlements,’ setting a precedent for proactive legal engagement.

This overseas patent dispute marks a pivotal shift for Chinese automakers, transitioning from passive defense to strategic resolution, and offers critical lessons for navigating global IP challenges.

Overseas SEP Blockade: A ‘Critical Chokepoint’ for Chinese Automakers’ Globalization

As Chinese automakers accelerate global expansion, SEP-centric IP disputes have emerged as a formidable barrier to internationalization.

Key characteristics of overseas patent challenges include:

1. Biased Judicial Environment with High Ambush Risks
Jurisdictions like Brazil employ ‘fast-track’ procedures that disproportionately favor rights holders, enabling preliminary injunctions within 48 hours based solely on unilateral claims, without prior notice to defendants. This system is vulnerable to abuse by Non-Practicing Entities (NPEs), facilitating ‘patent ambushes’ that exploit procedural inefficiencies.

2. Concentrated Litigation Entities Targeting Chinese Automakers
NPEs such as IP Bridge and Sun Patent Trust, alongside patent pools, form a closed-loop ecosystem of ‘litigation-injunction-settlement,’ specifically targeting Chinese automakers with strong global momentum. These entities weaponize litigation to coerce exorbitant licensing fees, leveraging systemic vulnerabilities for financial gain.

3. SEP-Centric Conflicts with Zero Pricing Power
Communication technologies like 4G/LTE and 5G are indispensable for intelligent vehicles, yet related SEPs are monopolized by overseas firms and patent pools. Chinese automakers lack influence in determining Fair, Reasonable, and Non-Discriminatory (FRAND) terms, forcing them to accept standardized, often inflated, licensing fees.

A deeper challenge lies in the automotive industry’s relative inexperience with SEP litigation compared to the mobile phone sector. Chinese automakers lack both an understanding of communication technologies and proprietary SEPs for counterclaims or cross-licensing, leaving them vulnerable to foreign injunction threats. Geely’s case epitomizes the systemic patent hurdles Chinese automakers face globally.

Triple Defenses: Crafting a ‘Chinese Solution’ for Overseas Litigation

Confronting Brazil’s biased judicial landscape and aggressive NPE tactics, Geely rejected the conventional ‘settle-for-peace’ approach, instead launching a meticulously planned counteroffensive. Its strategy hinged on three breakthroughs:

(I) Technical Defense: Dismantling ‘Infringement Claims’ with Rigorous Evidence
The threshold for a preliminary injunction is demonstrating a ‘high likelihood’ of infringement. IP Bridge submitted expert reports alleging patent violations by Geely’s vehicles. Geely countered with technical analyses from top Brazilian experts, proving that while its vehicles support 4G/LTE standards, their implementations fall outside the disputed patents’ scope. The appellate court ruled that conflicting expert conclusions raised ‘serious doubts,’ undermining the infringement claim and destabilizing the injunction’s technical basis. This breakthrough shattered the assumption that NPE-commissioned reports are irrefutable.

(II) Procedural + Precedent Counterattacks: Exposing Judicial Flaws
Geely identified two critical flaws in the initial ruling. First, it highlighted procedural violations: the court had mechanically replicated a BYD case judgment without independent case review, violating civil litigation’s adversarial principle and denying Geely’s right to defense. Second, Geely leveraged precedent by revealing that the same court had denied a preliminary injunction request in a Great Wall Motors case involving the same patent. This strategy dismantled the NPE’s narrative of the patent’s ‘invincibility,’ weakening the original ruling’s legitimacy.

(III) Public Interest Elevation: From Corporate Dispute to Societal Welfare
Geely reframed the issue as a matter of public safety and consumer rights, arguing that 4G/LTE is the ‘nervous system’ of intelligent vehicles, enabling critical functions like OTA updates, real-time navigation, and emergency calling (e-Call). A preliminary injunction would impair vehicle functionality, endangering lives and harming consumers. The appellate court agreed, stating that without conclusive infringement evidence, the injunction’s ‘reverse harm’ was unacceptable. This approach highlighted the broader societal impact, prompting judicial caution and shifting the debate from legal technicalities to ethical values.

Insights from Geely’s Victory: A Blueprint for Chinese Automakers

Geely’s interim success in Brazil transcends individual corporate victory, signaling a leap in China’s automotive industry’s ability to counter overseas patent threats.

(I) Abandoning ‘Settlement Inertia’ for a ‘Dare to Win’ Mindset
The belief that ‘injunctions necessitate settlements’ has long led Chinese automakers to accept unreasonable fees, perpetuating a cycle of vulnerability. Geely’s case proves that overseas patent blockades can be overcome through rigorous defense, even in rights holder-friendly jurisdictions. This mindset shift is essential for shedding the ‘easy target’ label.

(II) Addressing Systemic Gaps: Building a ‘Technology + Legal + Localization’ Defense
SEP litigation risks demand a holistic response. Technically, automakers must stockpile expert talent to bolster litigation support. Legally, familiarity with target markets’ judicial rules and proactive risk anticipation are vital. Locally, deep market integration, building technical-legal teams, and engaging judicial resources can mitigate cultural and regulatory barriers. A synergistic approach across these dimensions creates a robust defense against overseas patent risks.

(III) Fostering Industry Collaboration and Rule Negotiation
SEP disputes are an industry-wide challenge requiring collective action. Internally, strengthening collaboration to establish industry-wide FRAND rate-setting power is crucial. Externally, proactive participation in rule-making—shifting from passive acceptance of overseas standards to promoting independent systems in areas like intelligent connected vehicles—can transition Chinese automakers from ‘rule takers’ to ‘rule shapers.’

The path from ‘market-for-technology’ to ‘technology-for-market’ demands perseverance. Chinese automakers must enhance technological prowess, legal acumen, and global discourse power to reshape the automotive landscape and secure fair competition.

As Chinese automakers deepen their global footprint, overseas patent challenges will intensify. Only through technological innovation, compliance system reforms, and industry unity can they secure a level playing field and industry leadership.

(By Zhang Yi, Feng Ming)