Yes, China Does Protect Intellectual Property

From the Wall Street Journal:

Among the most common misperceptions is the notion that patents are useless in China. In reality, patent law is a booming area. The Chinese Patent Office issued more than 580,000 patents in 2009, up 41% from a year earlier. New patent applications grew to 947,000 in 2009 from 252,000 in 2002. The Chinese Patent Office is now the third-busiest patent authority in the world, after Japan and the United States. Meanwhile, China surpassed the U.S. in 2008 to become the most litigious country in the world for IP disputes—with 24,406 suits filed, a 4.6-time increase over 2001. That compares to about 8,000 in the U.S. in 2009.

Yet foreign companies are leaving themselves out of this legal progress. Only about 10% of those patent applications were filed by foreign companies, and a foreign company was one of the parties in less than 5% of IP lawsuits filed in 2008.

This is partly because they believe the Chinese legal system will favor local companies in litigation with foreign competitors. Certainly the largest patent-infringement damages award in China’s history, in 2007, saw French company Schneider Electric ordered to pay around $48.5 million to Chint Group, a Chinese company, for infringing a Chinese patent on a low-voltage circuit breaker. The suit settled for around $24 million in April 2009 as the appeal was underway. In 2008, another court hit Samsung with damages of $7.4 million for infringing a mobile phone patent held by Holley Communications.

See past CDT posts on intellectual property.


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