Current situation in China regarding the enforcement and protection of patent rights
Specialized IP Courts in Beijing, Shanghai and Guangzhou
Most litigious country in the world in terms of IP cases
Intellectual Property Litigation in China
2016: 136,534 civil IP litigation cases in the first instance and 131,813 concluded. Compared to 2015, growth of 24.82% in the number of first instance cases received, and increase of 30.09% in the number of decisions issued. In comparison with the US, the total number of IP litigation cases in the United States in 2015 is 16,448, which is equivalent to the total number of IP litigation cases in Beijing alone in 2016.
Why? The increase in IP litigation may be related to China’s new policy on encouraging innovation in technology to achieve sustainability. The government supported the initiative with various subsidies and incentives. Alternatively, the ever-rising IP litigation cases could be a reflection of growth in the size of patent portfolios of many large enterprises in China. Increasing numbers of Chinese enterprises are recognizing the commercial importance of IP and treat patents as a source of their core competitiveness and competitive edge.
Patent litigation represents a small percentage of all IP litigation in China.
Predominant type of IP infringement: copyright infringement, such as software, writing, music, movies, and designs; then followed by trademark infringement. The small proportion of patent infringement in China compared to copyright and trademark infringement may support the assertion that IP owners should worry more about their brand being copied rather than their technology. Infringers are more likely to copy the package and the brand exactly to produce a counterfeit product containing a different device than to risk patent infringement by making an identical device.
China’s specialized IP Courts
2014: IP Courts in Beijing, Shanghai and Guangzhou: symbol of China’s commitment to enhancing IP protection.
As long as the dispute involves one of the abovementioned subject matters, the specialized IP Courts have jurisdiction, regardless of whether the dispute also contains other IP issues:
All first instance civil and administrative IP cases;
Civil cases which involve well-known trademarks.
Moreover, when a foreign party is involved in a dispute, three special principles will be applied: The principle of national treatment, the principle of minimum protection standard and the principle of public interest.
How did foreigners fare in patent litigation in 2016 in the whole of China?
Invention Patent Dispute Cases: 160 invention patent dispute cases in China (6 cases in which both the parties are foreigners; 154 cases involving a foreign party and a Chinese party on opposing sides).
Findings based on cases analysis: no evidence of bias or prejudice can be seen against foreign party.
Chinese patents are enforceable
Foreign parties do not receive prejudicial treatment when trying to enforce their patents in China. However, if a foreign party lacks the understanding of the specific requirements of the Chinese legal system when planning enforcement strategies then their ability to enforce their patents would be markedly compromised (ex: evidence collection). In addition, foreign applications require translation for filing in China while their Chinese counterparts are drafted originally in Chinese. Clearly, the need for translation is a disadvantage as any ambiguity created during translation or any misunderstanding by the translator that is not rectified could affect the quality of the resultant Chinese patents. In fact, translation problems may be one factor resulting in the relatively low number of foreign-originating patent litigation. It is therefore imperative that a good translation be used for filing the patent applications.