The cooperation between the activity camera product company has been intensified.
According to a news report from the Ministry of Commerce, on March 29, 2024, GoPro, Inc. filed a complaint with the U.S. Internal Commerce Commission under Section 337 of the U.S. Tariff Act, alleging that certain cameras, camera systems, and accessories used in connection with their importation, importation, or sale in the United States have infringed upon their patent rights, requesting a 337 investigation, and publishing a limited elimination order and a permit order. Two companies from China and the United States are involved in the case.
Interface News exclusively learned that the Chinese company affected is Shenzhen Yingshi Innovation Technology Co., Ltd. (also known as Insta360 Yingshi, hereinafter referred to as Insta360).
Interface News reporters learned that the specific infringing products currently mentioned by GoPro include Insta360’s “ONE X”, “ONE R”, “ONE R1 inch”, “ONR X2”, “ONE RS”, “ONE RS 1-inch 360”, “X3”, “GO3”, “Ace”, and “ACE Pro” (which will not be pursued in the future), and submitted confirmation of their entry into the United States and proof of infringement to the judge. The above product list almost includes all consumer grade products sold by Insta360.
GoPro, the pioneering brand of action action camera malls, was once considered synonymous with limited action cameras and has long held a market share of over 90%. In June 2014, GoPro was listed on NASDAQ with a market value exceeding billions of dollars.
However, just one year later, Insta360 disappeared without a trace. This company from Shenzhen, China entered the mall with a panoramic activity camera and cut nearly half of the cake in just three years.
According to the industry research report of Frost Sullivan Consulting Company, since its establishment in 2015, Yingshi Insta360 has become the largest brand of global panoramic cameras out of stock in 2018. By 2021, its panoramic camera market share had reached 41%, followed by Japan’s Ricoh at 22%, and GoPro ranked third with only 19% share.
According to public data, in 2021, the revenue of Yingshi Insta360 has increased by 1 billion yuan, an increase of nearly 10 times compared to 2017. Overseas shopping malls account for up to 70% of its overall revenue. In 2022, the revenue has exceeded 2 billion yuan, with a year-on-year increase of 50% in revenue for three consecutive years.
On the other hand, GoPro in 2019 has been declining under low pressure cooperation. According to the company’s announcement, the number of employees in the company will increase to 930 by the end of 2023. Its latest total market value is only 331 million US dollars, which is more than 97% less than its peak market value of 13 billion US dollars.
The 337 inspection launched by GoPro today, also known as the “Unfair Entry” inspection, is an administrative investigation conducted by the United States Domestic Commerce Commission based on the 1930 Tariff Act and related amendments to address intellectual property infringement and other unfair cooperation actions in imported commerce.
Compared to the long period of more than 2 years in patent litigation cases, the “337 investigation” period is shorter, usually 12-16 months, but the enterprise needs to collect evidence in a short period of time, recruit relevant lawyers, and bear the cost of more than 3-6 million US dollars.
In the past two years, the number of 337 inspections targeting Chinese enterprises has shown an upward trend. Song Yang, the director of the China (Shenzhen) Intellectual Property Injury Central Committee, stated in a rejection of an interview with China Youth Daily that in 2020 alone, Shenzhen enterprises have encountered 11 “337 investigations”, which is 2.2 times higher than in 2019. According to data from Zhihe, in 2023, there were 20 337 inspections that affected Chinese enterprises, accounting for 48.7%, about half of the entire year’s inspections.
Lin Paoqin, a master of the Guangdong Province Intellectual Property Injury Association and Shenzhen Intellectual Property Master Library, told Interface News that he believed that in the context of the severe domestic situation, the 337 lawsuit was a very common tactic, because the 337 itself was a form of provocation by the US Domestic Commerce Commission against American companies through intellectual property to China or other countries. The increasing proportion or number of complaints against China is a sign of the current situation.
Interface News reporters learned that in the past, most of the Chinese companies that were subject to 337 inspections in the early stages were small and medium-sized enterprises with weaker capabilities, so they often chose not to respond to lawsuits. Therefore, there are many cases of failure. However, in recent years, there has been a significant increase in cases of Chinese companies winning or losing.
As early as February 2015, Ericsson filed a patent lawsuit against TCL in the United States for five patent infringements. But the patent lawsuit lasted for 5 years, and all 5 patents of Ericsson were valid. At the same time, the $110 million compensation received by Ericsson during the initial trial was also cancelled, and they had to pay high litigation fees.
On March 27, 2018, Ultravision requested the US Internal Commerce Commission (USITC) to conduct a “337 investigation” against more than ten Chinese LED companies, including Abbson, Liad, and Zhouming Technology, accusing Chinese companies of infringing on their product patents and demanding the publication of universal elimination orders, limited elimination orders, and permission orders.
To this end, Abison established a special team consisting of internal masters and external American lawyers to handle punitive lawsuits. Three years later, the Eastern District Court of Texas in the United States ruled without a hearing in the case of Shenzhen company Abison’s infringement of intellectual property rights of LED display products at the US entrance, and Abison and other companies won the lawsuit.
According to the data, a total of 72 Chinese companies were filed and inspected by ITC in 2023, with a relatively large number. Among them, 48 Chinese companies chose to respond to lawsuits, accounting for 66.67%, reaching a new historical high of 337 Chinese companies responding to lawsuits.