Red Flag - Doing Business in China? Using Your Intellectual Property? Take Note...

Knowles, a supplier of microphones to Apple and Samsung Electronics, said its lawyers were shut out of court proceedings in an intellectual property suit filed by a Chinese rival, highlighting the uncertainties foreign companies can face in China’s legal system.

Itasca, Ill.-based Knowles is the world’s largest supplier of micro-electrical-mechanical systems (MEMS) microphones, which are widely used in smartphones. The company has a factory in Suzhou, near Shanghai. Since 2012, Knowles has faced stronger competition from business with Apple from Chinese competitors Goertek and AAC Technology Holdings. Knowles and Goertek have been locked in legal battles in the U.S. and China since June, with each accusing the other of patent infringements...

Knowles said Wednesday the Weifang Intermediate People’s Court in China denied its lawyers access to the courthouse as the trial against Goertek proceeded on March 31.

“The Weifang Court’s decision to bar Knowles from the legal proceedings makes a fair trial impossible,” said Knowles Chief Executive Jeffrey Niew.

Intellectual property has long been a major issue for foreign companies that operate in China...

Lawyers in China said the situation Knowles is alleging is unusual and raises questions of whether other companies could face such a situation. (more)