(By You Yunting) Recently, a lawsuit filed by Chinese drone giant DJI against its rival Insta360 has drawn attention from both the tech and legal communities. The core dispute is straightforward: several engineers who had left DJI for Insta360 filed multiple drone-related patent applications within one year of their resignation. While the inventors’ names were kept anonymous in domestic patent filings, subsequent disclosures under the Patent Cooperation Treaty (PCT) revealed that all the patents were invented by those former DJI employees. DJI has since sued Insta360, seeking for the corresponding patent rights to be transferred to itself.
In response to the lawsuit, Insta360 CEO posted an eight-point statement on Weibo. His key argument was that these patents were all independent innovations generated at Insta360 through legitimate and standardized R&D process and even some core ideas (such as leap flight function) were proposed by him personally. However, a closer look at China’s relevant laws will show that very few of these eight points constitute valid legal defense. Now we will deconstruct what the Insta360 CEO’s response actually signals from a legal perspective.
I. Identification ofService Invention Within One Year of Resignation
In his response, Insta360 CEO repeatedly emphasized that the disputed patents were “independently created at Insta360”, attempting to cut their technical ties with DJI. However, under the Chinese Patent Law, such a defense is unlikely to succeed. The Rules for the Implementation of the Patent Law stipulates that:
Any invention-creation made within one year from his/her retirement, resignation or from termination of his/her employment or personnel relationship with the entity to which he/she previously belonged, where the invention-creation relates to his/her own duty in the entity or the other tasks entrusted to him/her by the entity to which he/she previously belonged, belongs to service invention-creation. This clause is designed to prevent core technical staff from transferring nearly completed R&D results to new employers by rapid job-hopping after mastering the technological accumulation and R&D ideas of their former employers.
Four key elements define a post-resignation service invention: (1) the individual was once an employee of the former company; (2) the invention was completed within one year of resignation/retirement; (3) the individual made a substantive and creative contribution to the patent’s key features; (4) the invention is related to the individual’s own duties or assigned tasks at the former company. In this case, the one-year timeline is undisputed—the real core is the “relevance” requirement. Accordingly, even if the former DJI employees have utilized Insta360’s funding and facilities, or completed the inventions under the direction or inspiration of Insta360 CEO, DJI can still claim the patent rights if it can demonstrate that such employees were engaged in drone-related R&D and the disputed patents fall within the scope of their duties during their employment in DJI.
For Insta360 to prevail in a patent ownership dispute, the only viable legal pathway will be to establish that the disputed patents are entirely unrelated to the employees’ own duties or assigned tasks at DJI. Based on publicly available patent information concerning drone flight control technologies currently, this defense may face substantial challenges.
II. Legal Risks of Concealing or Substituting Inventors
In his response, Insta360 CEO stated that the inventors’ names were concealed in domestic filings in order to delay the exposure of technical staff, and to prevent them from being targeted by headhunters, which is common practice in the industry. But under the disclosure mechanism of the PCT, it instead became a key to evidence collection for DJI. Many may wonder: if Insta360 had directly listed third parties (such as executives, other employees, or even non-industry individuals) as inventors, would DJI have missed it?
Such an approach may carry significant legal risks. First, under the Provisions on Regulating Patent Application Conduct issued by China National Intellectual Property Administration, fabricating or concealing the identity of actual inventors constitutes “abnormal patent application activities”. Once established, the company may incur the rejection of patent application or the invalidation of granted patents and may also face administrative punishments, including penalties and inclusion in the list of parties with serious illegal and dishonest acts, while patent agencies and agents involved may even be subject to license revocation.
Second, in judicial proceedings, courts focus on the R&D evidence chain. In previous patent ownership disputes, some companies have tried to circumvent the identification of service invention within one year of resignation by applying for patents in the name of acquaintances, spouses, or even newly hired graduates.
However, such nominal inventors, often lack of technical knowledge, are unable to withstand judicial scrutiny. Courts may examine a wide range of evidence, including code submission records, R&D records, internal emails, meeting minutes, and testing data. These materials are typically interrelated and can corroborate each other, making fabrication extremely difficult. Any inconsistency in the evidence chain may lead the court to form a personal opinion as to the true inventorship.
In theory, Insta360 can also choose to delay patent application until one year after the employees’ resignation from DJI, but this approach also carries risks. Legally, as for patents, the completion date of the invention matters. If evidence shows a long delay between completion and application, it may be construed as an intentional attempt to circumvent service invention ownership rules. Such delay may also result in Insta360’s failure to claim a right of priority. For these reasons, Insta360 appears to have opted for concealment of inventors rather than delay in application.
III. Strategic Options Remaining for Insta360
Besides legal disputes, Insta360 CEO’s response also infers broader commercial strategies, which can be summed up as two strategies.
1. Defensive Strategy: Stop Losses and Avoid Infringement
Insta360 CEO has emphasized that “leap flight function” has not been implemented in its drone products, and that most of the patents, filed four to five years ago, are no longer applied in its current products due to major changes to product definition, aiming at mitigating the risk of losing the lawsuit. If the patents are ultimately awarded to DJI and Insta360’s products are found to have applied the patents, DJI may subsequently claim for cessation of infringement and damages. Preemptively asserting non-use and updating products during litigation are standard loss mitigation measures.
However, this strategy may be less effective in overseas markets. Given regulatory constraints on drone operations in China, the primary market for such products lies abroad. If DJI prevails in China and secures ownership of the underlying patents, it will also obtain rights to related PCT international patent applications, which will directly threaten the legitimate sales and expansion of Insta360’s drone products in overseas markets, considering market competition, such technologies are indispensable for Insta360’s overseas products.
2. Bargaining Chip: Cross-Licensing
Insta360 CEO has also asserted that DJI’s panoramic and action cameras may fall within the scope of Insta360’s patents in terms of structure, software, and control methods. In patent wars between giants, success often depends not on absolute non-infringement but on the strength and breadth of patent portfolio. While Insta360 may not match DJI in underlying drone technologies, revealing these patents shows its capacity to counterclaim and convert the ownership dispute to cross-licensing negotiations.
However, commercial patent bargaining depends not only on the existence of leverage, but also on its scale and significance. As a latecomer in the drone field, Insta360’s patent portfolio may be hardly comparable to DJI’s in terms of volume, relevance, and technological depth. Nevertheless, having patents is better than having non—they serve as bargaining chips and give Insta360 leverage in future negotiations.
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