Hiring talent does not equal innovation; protecting intellectual property is the true remedy to "involution" | Beijing News Column

Patent-based litigation isn’t scary. What you need to watch out for is the “involution-style” competition signals behind it.

▲The occurrence of a patent lawsuit also means China’s drone industry has entered a mature stage of development. Photo/IC

By / Hai Chao

On March 23, DJI (Shenzhen) Innovations Technology Co., Ltd. officially filed suit against Zhiying Innovation Technology Co., Ltd. in the Shenzhen Intermediate People’s Court in Guangdong Province, covering six patent ownership disputes. Several of DJI’s core R&D personnel are alleged to have been involved. At present, the court has officially accepted the case.

This is also the first patent ownership lawsuit in China’s drone industry. The news quickly drew market attention, and many domestic and international media outlets reported on it.

In terms of nature, this patent lawsuit is not a major case, yet it attracted a lot of attention mainly because it happened between two well-known Chinese image companies—actually, two globally renowned image leaders. DJI’s main business is drones, while Zhiying’s main business is action cameras. But this dispute occurred at the intersection of their consumer imaging businesses.

In 2025, these two companies, which were expanding rapidly, entered each other’s main battlegrounds in succession and sparked a price war, which then led to this case: DJI’s first patent ownership dispute brought in China.

In other words, the larger backdrop of this case is an escalation in market competition between the two. Competition has moved from product upgrades to patents, and it also involves issues like organized poaching. It touches on certain gray areas of industry competition and areas of legal dispute—factors that have increased attention to the case, and there are plenty of aspects worth discussing.

Organized poaching raises “involution” concerns

It is common for different companies that operate in overlapping areas to have patent ownership disputes. But the difference in the DJI case is that nearly all reports mention one point: the patents may have been completed by former DJI core R&D personnel who left the company not long ago.

According to DJI’s publicly disclosed information, the inventors of the six patents in question had all worked in DJI’s R&D department and directly participated in technical development in areas such as drone flight control, structural design, and image processing.

And according to the Implementing Rules of the Patent Law of the People’s Republic of China, for inventions created within one year after an employee leaves employment, and that are related to the employee’s job duties at the original unit, the patent right belongs to the original unit. This provision is commonly referred to in the industry as the “one-year rule.”

Zhiying, however, issued an announcement stating that although the employees involved all joined the company within one year after leaving DJI, “the patent applications filed by the relevant employees as inventors during that period are, based on the existing evidence, all independent innovation achievements generated during their employment at the company.” The R&D process was lawful and compliant.

Since the case is still under review, it is difficult for outsiders to determine the outcome. But from an industry perspective, the occurrence of this case itself can be seen as a sign that the consumer imaging sector—once a latecomer—has entered a period of market maturity. In emerging markets, companies have been busy “grabbing market share,” with relatively little business overlap, making it hard for conflicts to arise in a short time.

“Patent litigation,” meanwhile, means overlap of business territory, a basic stabilization of technical routes, and innovation beginning to take on “micro-innovation” characteristics. Competition then shifts toward attacking patent barriers and ecosystem barriers.

When an industry begins to see a large number of patent lawsuits, it generally means it has entered a mature stage. For example, after the mobile phone industry matured back then, lawsuits occurred between Apple and Samsung, and also between Qualcomm and almost the entire industry.

Clearly, the consumer imaging industry is also moving into a phase of patent-intensive competition. But different from the past is that this is not happening as late-moving Chinese companies challenge international giants; instead, it’s a game of chess among China’s leading firms.

On the one hand, this reflects that China’s tech industry is moving from the “catch-up” stage into a stage where internal competition determines the overall competitive landscape. On the other hand, it also easily triggers external concerns about “involution” among Chinese tech companies—unnecessary industry in-fighting.

Clearly, if in the future all excellent Chinese tech companies put their efforts into price wars, poaching each other, and litigation-driven attrition, it will inevitably affect industry innovation capacity, allowing overseas rivals to benefit like fishermen reaping the profit.

Industry development should not assume “poaching = innovation”

This case has also drawn attention from some overseas media. Because the core of this lawsuit is quite “Silicon Valley”-like—specifically, how should we view technical spillover caused by talent mobility? Does technology belong to the company, or to the “people”? Should we protect company innovation, or protect the mobility of talent?

This kind of narrative is common in Silicon Valley, and it has also produced cases often regarded as textbook-level examples—such as the Google Waymo v. Uber case.

A key member of Google’s Waymo self-driving team left to found Otto. Otto was then acquired by Uber. Google subsequently sued, claiming trade secrets were misappropriated and used in Uber’s self-driving project, seeking damages and an injunction to prohibit Uber from using the related technology.

The case had far-reaching impact and was dubbed the “first global case of self-driving knowledge property.” It ultimately ended in a settlement in which Uber paid about $245 million in equity compensation and promised not to use the disputed technology. Meanwhile, the individual involved was criminally charged and was ultimately sentenced to 18 months in prison for stealing trade secrets.

Google’s case is typical because it clearly drew three lines: when employees leave and switch jobs, what they can take away is knowledge and experience, but the specific technical route and implementation details must remain with the original company. Trade secrets are absolutely forbidden.

In this DJI case, Zhiying’s team includes former DJI personnel. Whether they only took knowledge and experience—or also took more—still needs the court to determine. In fact, it’s not easy to judge these cases, because there are many gray areas. For example, how to define “experience” versus “trade secrets” tests the wisdom of judicial practice.

For the industry, it doesn’t really matter who ultimately wins or loses between DJI and Zhiying. In market competition, it is normal for companies to offend each other and create conflicts. What truly needs to be wary of is organized poaching to obtain core technology—perhaps even filing patent applications.

After all, if an industry simply assumes “poaching = innovation,” it will result in no one being willing to invest for a decade sharpening a sword in R&D. The outcome would be a double loss where everyone gets stuck in “involution-style” competition in the market’s red ocean.

In fact, China’s domestic judiciary has already had precedents in this regard, such as the case of Geely vs. WM Motor concerning intellectual property.

On June 14, 2024, the Intellectual Property Tribunal of the Supreme People’s Court released the final judgment in that case. It ruled that the infringer should compensate for economic losses and reasonable expenses for rights protection totaling about RMB 640 million, setting a historical record high in China for compensation amounts in intellectual property infringement litigation.

The case began because Geely’s subsidiary, with 40 executives and technical personnel, “jumped” to WM Motor in sequence. WM Motor, without technical accumulation or legitimate sources of technology, used Geely’s chassis parts blueprint drawings technology to quickly launch a certain series of electric vehicles in the short term, causing Geely massive losses.

And both before and after this case, it was also exactly the period when competition in China’s electric vehicle industry became intensely heated and profits plunged. For instance, Geely’s stock price had once peaked at 35 yuan, but at the time of judgment it was only 9 yuan. WM Motor then fell into bankruptcy reorganization. Such “involution-style” poaching by enterprises has negative effects on both sides that should not be ignored.

Returning to the DJI v. Zhiying case: as a pair of Chinese image giants moving toward international markets, both have previously had lawsuits with international competitors during their overseas expansion. Yet that did not affect their development and growth. From that perspective, patent-based litigation is not truly scary. What needs to be watched out for are the “involution-style” competition trends behind it.

In international competition, many Chinese companies don’t fear opponents because they rely on strong competitive advantages with Chinese characteristics. But once the competition switches to between Chinese companies, because they know each other too well and are too similar, it becomes easy to use some relatively lower-level tricks outside the rules—forming “involution.”

To address this issue, it is necessary to make good use of the key of the rule of law—to crack down on “involution-style” competition among enterprises, safeguard the order of industry development, and also contribute to building a unified national large market.

Written by / Hai Chao (media practitioner)

Edited by / He Rui