Chinese Medical Enterprises Navigate Global Patent Battles: From Defense to Strategic Offense

Patents are a raw nerve for many Chinese enterprises. For a long time, domestic medical companies have been passively responding to intellectual property issues. Giant brands, armed with intellectual property rights, can easily silence latecomers seeking a share of the market with a single strike.

On November 1, BMC Medical, the first Chinese homegrown ventilator brand, listed on the ChiNext board of the A-share market. Its prospectus provided a detailed account of the ITC Section 337 patent litigation battle between BMC Medical and ResMed, the global ventilator giant, which began in 2013. This marks the first recorded ITC Section 337 case in China’s medical device sector.

In the memories of most people, there was little worth remembering between 2015 and 2017. Yet in the history of global patent wars, these years marked a turning point in the role played by Chinese enterprises. VCBeat revisits the extraordinary patent battles of those years through the patent stories of three companies.

Tian Zirui, who has now entered a new chapter of his investment career, also recalls that it was in 2017.

After more than three years of intense legal battles, BMC Medical, invested in by Tian Zirui, reached a comprehensive settlement with ResMed, the global giant in ventilators, in the ITC Section 337 patent litigation. This marked the first time a Chinese medical device company had responded to an ITC Section 337 investigation. ResMed likely never anticipated that, in a case where most competitors were intimidated into retreat, this Chinese enterprise—with annual revenues of only tens of millions of yuan at the time—would choose to fight back. For BMC Medical and Tian Zirui, 2017, as the storm subsided, was a rare period of calm.

After nearly a year of intensive cycles of hypothesis, validation, re-hypothesis, and re-validation, the CRISPR/Cas12 protein trans-cleavage hypothesis proposed by Wang Jin and his team finally accumulated sufficient experimental data in the summer of 2016. Building on this discovery, they subsequently developed a novel CRISPR-based diagnostic technology called HOLMES. At that moment, he seemed to envision a bright future in which a Chinese team would drive the widespread adoption and prosperity of this groundbreaking technology. Consequently, they promptly filed for domestic and PCT invention patents and, leveraging ToloBio—a life science total solution provider specializing in CRISPR diagnostics—embarked on the path toward the industrialization of CRISPR diagnostic technology.

At virtually the same time, Jennifer Doudna, who was awarded the 2020 Nobel Prize in Chemistry for her work in deciphering CRISPR gene-editing technology, was pursuing a similar strategic layout. Wang Jin likely never imagined that his closest connection to the Nobel laureate would arise from their competition to file global diagnostic patents for CRISPR/Cas12, in which he secured a decisive advantage by filing just a few months earlier, thereby gaining absolute initiative in patent rights.

Shao Jinhua, based in the Wuxi National High-Tech Zone in southern Jiangsu Province, clearly remembers the period from 2014 to 2019 as six years of arduous progress. Although his non-invasive liver fibrosis detection product, iLivTouch, developed during his doctoral research at Tsinghua University, filled a domestic gap and received acclaim from customers both in China and abroad upon its market launch, his company, Hisky Medical, simultaneously faced a protracted intellectual property dispute with its French competitor, Echosens.

The intellectual property disputes between the two parties have not been confined to multiple cities in China, such as Beijing and Shanghai; related conflicts have also arisen overseas. In 2015, Echosens filed an application for a preliminary injunction against Hiskell in Germany, alleging patent infringement. Although Hiskell promptly received a ruling from the Regional Court of Düsseldorf dismissing Echosens’ application for a preliminary injunction, Shao Jinhua was well aware that this interim victory was far from the end. More significant legal battles lay ahead, and the lawyers and team might soon need to prepare for subsequent first-instance proceedings, and potentially even second-instance appeals.

Anyone who has personally experienced the global patent wars knows that there is no end to them; each victory or defeat is merely a footnote to the ongoing battle.

"Contrary to the swift and decisive rulings seen in courtrooms, nearly all patent wars are protracted battles of attrition."

In late October, the U.S. International Trade Commission (ITC) ruled that flocked swabs produced by five Chinese companies, including Shenzhen Mai Rui Ke Lin and Jiangsu Changfeng Medical, did not infringe upon the relevant patents cited by Copan. In this patent infringement case, Copan named a total of eight Chinese enterprises as defendants, but only the aforementioned five actively responded to the lawsuit. Their eventual victory came after two years of litigation and at a cost of more than RMB 75 million.

Yet this represents a rare and straightforward scenario in patent wars. Shao Jinhua told VCBeat that Hisky has endured years of domestic and international disputes, including challenges to patent and trademark validity, as well as allegations of patent infringement, trademark infringement, and unfair competition. Foreign enterprises often come well-prepared; once they perceive the emergence of potential rivals or threats to their market share, they typically deploy a comprehensive set of strategic maneuvers, aiming to eliminate Chinese companies that are often insufficiently prepared in the realm of intellectual property.

In October 2007, Echosens’ self-developed non-invasive liver fibrosis detector entered the Chinese market. In China, a country with a high prevalence of liver disease, the clinical demand for such diagnostic equipment is evident. However, due to its high cost, non-invasive liver fibrosis detection technology has yet to achieve widespread adoption, despite Echosens establishing a near-monopoly position globally.

According to Shao Jinhua, at the launch of the iLivTouch product series, Aikesen’s annual installation volume in China was approximately 100 units, yet Hisky quickly overtook them as the market leader. Aikesen grew highly wary of this development. “They expressed interest in acquiring Hisky on multiple occasions,” Shao Jinhua revealed to VCBeat. However, for Hisky’s founding team, the company was not merely a business venture; it represented a life pursuit dedicated to translating basic research into industrial applications and transforming clinical practice through independent innovation.

In 1993, under the leadership of Professor Bai Jing, a renowned expert in the field of biomedical engineering in China, the Tsinghua University team pioneered fundamental research on elastography technology in the country. With continuous support from multiple national scientific research funds, by around 2004, the elastography method studied by Shao Jinhua, who was pursuing his doctoral degree under Professor Bai Jing, demonstrated excellent clinical performance in detecting liver fibrosis, laying the foundation for subsequent industrial translation. During nearly the same period, French research teams also validated the clinical value of elastography technology and took the lead in initiating result translation in Europe, leading to the emergence of Echosens and its related products. Dr. Shao Jinhua graduated and founded Hisky Medical in 2010.

Having entered the commercialization race a step behind, Shao Jinhua anticipated potential intellectual property disputes and strategically secured patents for core underlying technologies at the inception of Hisky Medical. Consequently, when their relationship with Aixson soured into hostility after a failed acquisition attempt, Hisky faced a barrage of lawsuits spanning nearly every area of IP dispute—including false advertising, patent invalidation, patent infringement, trademark invalidation, and trademark infringement. Despite immense pressure, the company remained confident that ultimate victory would be theirs.

Since 2014, the opposing party first published public videos on internet platforms, alleging functional defects in Haiscale’s products. Subsequently, after initiating a series of lawsuits against Haiscale, they sent lawyer’s letters to Haiscale’s customers, aiming to cast doubt on Haiscale’s ability to continue as a going concern. Haiscale sued the opposing party for “commercial defamation.” The court ultimately ruled that the opposing party had committed commercial defamation, ordering them to immediately cease the unlawful conduct, eliminate the adverse impact, and compensate for the losses incurred.

Shao Jinhua told VCBeat that during the prolonged back-and-forth with Aikesen, Haiskell’s development was inevitably affected. Some orders were forced to be delayed, and some customers quietly drifted away. The Haiskell team had to put in significantly more effort than usual to rebuild customer trust in the Haiskell brand, and at times, they were not even given the opportunity to explain.

“Being targeted by international giants also reveals the positive side behind the negativity; it indicates that our products are already outstanding and demonstrates the company’s promising growth prospects.” The strategic rivalry between Hisky and Echosens has persisted for many years. Hisky was fortunate to prevail in the majority of intellectual property litigations, and Shao Jinhua gradually adapted to this rhythm. “However, at specific junctures, each contest is a matter of life and death for the particular enterprise involved.”

Nowadays, Hiskel’s global strategy is still unfolding in a steady manner. In Shao Jinhua’s view, competition based on intellectual property as the underlying logic is just another battlefield in commercial competition among enterprises. As long as Chinese innovative companies continue to move upstream in the industrial chain and technological chain

As more and more Chinese enterprises go global, intellectual property disputes between domestic companies and overseas giants will not disappear.

Tian Zirui has also gained deep insights from the patent tug-of-war with industry giants. A similar back-and-forth struggle once occurred between BMC Medical and ResMed.

Shortly after being served with ResMed’s Section 337 lawsuit before the U.S. International Trade Commission (ITC), BMC Medical filed invalidation proceedings against five of ResMed’s invention patents covering masks and ventilators with the Patent Reexamination Board of the China National Intellectual Property Administration (CNIPA) in October 2013. Among these, four petitions were upheld by the CNIPA within a few months.

In November of the same year, ResMed accused BMC Medical of infringing the German portions of three of its European patents related to ventilators and masks in Germany, filed a patent infringement lawsuit against BMC Medical, and successfully obtained a preliminary injunction. This directly led to the seizure of BMC Medical’s exhibited products by local police at a trade show in Düsseldorf, Germany, and the immediate closure of its booth, escalating the patent dispute between the two parties to a fever pitch.

To this day, whether it is Hisky Medical, whose patent was ruled valid by China’s Supreme People’s Court, or BMC Medical, which reached a five-year settlement with ResMed, the patent disputes are far from over. This is a protracted battle that requires constant readiness for confrontation.

As previously mentioned, when facing the patent threats posed by industry giants, companies that choose to confront them head-on are never entirely unprepared in terms of patents; nevertheless, they often feel inadequately prepared when the crisis actually arises. Reflecting on the patent dispute with Jennifer, Wang Jin expressed some regret for not having initiated the patent application process immediately after completing the collection of core technical data, as success in patent litigation largely hinges on the advantage of filing date (i.e., priority right).

The battleground of patent wars has shifted upstream; indeed, the outcome is often determined long before products hit the market—a fact beyond dispute.

As the Cas12 protein sequence was disclosed early on, its multiple functions were gradually discovered. Notably, Professor Feng Zhang’s team at the Broad Institute was the first to demonstrate that this protein could be used for gene editing. Subsequently, while studying the in vitro cleavage of single-stranded DNA (ssDNA) by the Cas12 protein, Wang Jin’s team observed that the protein generates a large number of short nucleic acid fragments upon recognizing and cleaving its target sequence.

Through repeated experiments, they hypothesized that the Cas12 protein, upon recognizing target nucleic acids guided by guide RNA, is activated to exhibit indiscriminate single-stranded DNA (ssDNA) cleavage activity. This activity allows it to fragment any sequence in the system without requiring complementarity with the guide RNA. Subsequently, Wang Jin’s team proposed the “trans-cleavage” hypothesis and, between late 2015 and mid-2016, validated this hypothesis through a series of rigorous experiments, demonstrating that this activity is prevalent among Cas12a family proteins. Notably, this activity represents the first such discovery not only within CRISPR systems but also in nature. Building on this foundation, Wang Jin’s team further developed a CRISPR-based diagnostic technology named “HOLMES” (an allusion to the famous detective Sherlock Holmes) and accelerated its application and promotion through Tolo Harbour Company.

The trans-cleavage activity of Cas12 can rapidly and specifically convert the sequence information of target nucleic acids into fluorescent signals detectable by instruments, while amplifying the signals during the conversion process to enhance detection sensitivity. Thus, it represents a novel, specific, and highly efficient method for molecular diagnostics. In 2018, Science magazine hailed CRISPR-based diagnostics as “next-generation molecular diagnostics,” which further strengthened Wang Jin’s confidence in promoting the industrialization of this technology. This year, Nature magazine also listed CRISPR-based diagnostics among the seven most noteworthy technologies of the year, signaling that this emerging diagnostic technology is on the verge of an explosive breakthrough.

In May 2020, the U.S. FDA granted Emergency Use Authorization (EUA) to the CRISPR-based diagnostic kit developed by Sherlock Biosciences for detecting SARS-CoV-2, the virus that causes COVID-19, marking the first CRISPR-based test approved by the FDA.

In November 2022, Tulip Bio and Sherlock Biosciences signed a cooperation agreement to further establish a global “CRISPR Diagnostics Patent Cross-License” partnership, building upon their existing collaboration in the Greater China and U.S. markets.

The rapid advancement of application-side developments has also made the underlying patents for CRISPR diagnostics particularly critical. While Dr. Wang Jin’s team was advancing international patents for Cas12 and strategizing their global market presence, Jennifer’s team filed a patent application for similar technology in the United States, with claim scopes that were remarkably similar between the two patents. Although Dr. Wang’s team had an earlier priority date by more than four months, Jennifer’s U.S. patent application was granted rapidly before Dr. Wang’s team entered the U.S. market via the PCT route. This situation has posed certain challenges to Tolo Harbor Biotech’s globalization efforts.

Under the Patent Cooperation Treaty (PCT), an enterprise must decide whether to file a PCT application within 12 months after its domestic patent is granted. Subsequently, the enterprise typically has another 18 months to enter the national phase of the international patent application under the PCT framework. The patent dispute between Wang Jin and Jennifer in the United States stemmed from this 30-month window. If Tolo Harbour Company had ultimately abandoned entry into the U.S. market, Jennifer would have been able to maintain her U.S. patent rights; however, since Tolo Harbour has now entered the U.S. market, Tolo Harbour is poised to prevail in the U.S. patent dispute by virtue of its earlier priority date for the patent application. In addition to the United States, Tolo Harbour Biotech has filed patent applications in nearly 20 countries and regions worldwide and has already obtained patent grants in multiple jurisdictions.

“This process was extremely tense. Both teams made identical foundational discoveries, developed the same application technologies, and filed patent claims with substantially overlapping scope. Ultimately, priority hinged solely on who filed earlier, granting that party the initiative,” Wang Jin told VCBeat. Due to filing its patent application several months ahead of its competitor, Tolo Harbour Biologics holds a stronger position in securing patent rights. “We are highly confident, as patent laws in various countries now clearly stipulate the ‘first-to-file’ principle, which basically ensures our advantage.”

Indeed, events have unfolded precisely as Wang Jin predicted. After the patents held by Wang Jin and Jennifer were successively disclosed, the Broad Institute, which holds the foundational diagnostic patent for Cas13, chose to partner with Tolo Harbor Biotech for a strategic alliance, given that Wang Jin’s patent priority date was established earlier than Jennifer’s. “Currently, there are two main technological pathways in CRISPR diagnostics: one is the Cas12 pathway, represented by our HOLMES technology, and the other is the Cas13 pathway developed by Professor Feng Zhang of the Broad Institute, known as SHERLOCK technology. Under the promotion of Professor Feng Zhang, Tolo Harbor Biotech and Sherlock Bio, a company co-founded by Professor Zhang, successfully signed a cross-licensing agreement for patents in both China and the United States in 2020. Tolo Harbor Biotech exchanged its exclusive patent rights for Cas12-based diagnostics in the United States for Sherlock Bio’s exclusive patent rights for Cas13-based diagnostics in the Greater China region,” Wang Jin told VCBeat. In November of this year, the two parties signed a new agreement extending their collaboration to global markets beyond China and the United States. “These two patent cross-licensing agreements with Sherlock not only enable Tolo Harbor Biotech to hold all foundational patents in the field of CRISPR diagnostics, thereby ensuring that Chinese companies are not constrained by others in this area, but also further strengthen Tolo Harbor Biotech’s cooperation with top-tier international teams. This allows Tolo Harbor Biotech to maintain a certain degree of initiative in future international competition, rather than fighting alone.”

No company would ever initiate a patent war solely to safeguard its legal rights, nor would any firm engage in reckless, impulsive counterattacks. The underlying logic of patent wars remains rooted in the consideration of commercial interests.

In the patent wars, the offensive and defensive tactics have shifted from products and channels to more fundamental priority rights in technology. In VCBeat’s view, patent disputes are no longer merely a daunting challenge to be endured; rather, they present a rare opportunity for Chinese medical innovation enterprises with robust technological capabilities to compete for global market share.

During the period when foreign giants controlled technological patents, domestic innovative enterprises had no choice but to pay hefty licensing fees. If they wished to avoid missing market opportunities by waiting for patents to expire, they could only attempt to design around these patents—a strategy that often inadvertently fell within the patent protection scopes meticulously laid out by the giants. The market barriers constructed in this manner were highly unstable; once a patent war was initiated by the incumbents, those accused of infringement had no choice but to retreat in disarray. Today, however, they can take more robust measures to build stronger and more resilient market barriers.

On one hand, domestic medical innovation enterprises can initiate the construction of intellectual property barriers at an earlier stage, adhering to the principle that “speed is paramount” in patent wars characterized by a forward-shifted battleground. In Wang Jin’s view, precise timing was critical during the tense back-and-forth struggle with Jennifer’s team.

He believes that Tolo Harbour Biotech learned two minor lessons from this incident. First, the application for the domestic patent on CRISPR diagnostic technology could have been filed earlier. “Our patent data are very comprehensive and largely consistent with our published paper data. In fact, the patent application could have been submitted at an earlier stage, which might have avoided the competition with Jennifer’s team.” Second, for key patents, it is advisable to accelerate the PCT patent application and national-phase entry, or even file directly in certain important countries. Had Tolo Harbour Biotech filed directly in the United States at that time, it might have preempted Jennifer’s team from securing patent rights in the U.S., thereby eliminating the subsequent competitive challenges.

The patent competition with Jennifer has undoubtedly further strengthened Wang Jin’s confidence in R&D investment. “Companies need to strengthen their R&D efforts, particularly at the level of original foundational technologies. Our competitive advantage over Jennifer stems from the lead time in patent filings achieved through our R&D initiatives. We have already established a solid foundation in technology and patents, and we will continue to reinforce our leadership in the CRISPR diagnostics field through sustained R&D investment. By securing control over core technologies and maintaining initiative in patent holdings, we can avoid being constrained by others in international market competition.”

As the inventor of CRISPR-based diagnostic technology and the holder of its foundational patents, Tolo Harbor is currently collaborating closely with peers in the in vitro diagnostics (IVD) industry to jointly promote the healthy development of the CRISPR diagnostics ecosystem. We firmly believe that with the Chinese government’s increasing investment in basic research and development and its strengthening of intellectual property protection, more innovative enterprises like Tolo Harbor, equipped with core foundational technologies, will continue to emerge in China. This will further drive the transition from “Made in China” to “Intelligently Created in China.”

On the other hand, domestic medical innovation enterprises can build more comprehensive intellectual property barriers, thereby gaining a greater advantage in the long-term patent competition. Shao Jinhua told VCBeat that, in reality, patents differ not only in their presence or absence but also in their quality. In the technical field, some elements are originally public, such as certain principles. During the productization process, transforming these principles into products involves specific technical routes and solutions, which patents typically protect. A well-drafted patent has the potential to cover all technical pathways, or comprehensive coverage can be achieved through a portfolio of several patents.

Tian Zirui also pointed out that in the past, companies mostly tended to apply for patent protection specifically for the core technologies of their flagship products. As patent wars have prolonged and expanded, an increasing number of enterprises are attempting to build patent pools, incorporating key technological nodes that will not be applied to products in the short term into their patent moats, thereby blocking competitors. “Whether a company possesses global competitiveness is an important investment criterion for us. Although building a patent portfolio is time-consuming and labor-intensive, we still hope that companies can gradually establish internationally aligned patent capabilities during their development process.”

Admittedly, there are no winners in patent wars, only ever-vigilant combatants. We hope to see future patent battles serve not merely as a drain on corporate resources, but as strategic tools for market expansion and dominance.