Intellectual Property Protection in China is NOT an Oxymoron

By Michael Lin
March 15, 2011

Certainly those of us involved with international IP protection have heard the horror stories about how IP protection in China is a waste of money, effort, time, etc. or how such a phrase may even seem to be an oxymoron. Honestly, when a study comes out showing that most government computers are running pirated Windows® software then the headlines are easy, and the politicians start pounding their fists to make political capital while the sun shines.

And certainly one can not pretend that IP in China is issue-free. However, as one who has been working in Asia for over a decade on IP matters, I tell you it is getting better.

Believe it or not, Patents are enforceable in China. Trademarks are enforceable in China. Copyrights are enforceable in China. The devil is in the details. Certainly if you are trying to enforce your patent against a company in the boondocks far west of Chengdu, and that company happens to be the largest employer in the district, then you are going to have problems. No one can / should tell you differently. However, can you tell me with a straight face that these same problems would not occur in the US if the situation was reversed – where a foreigner is asserting a patent against a local, respected employer in a rural area of the US? As Gene said recently “To some extent that is human nature and the judicial system is made up of human actors.”

The good news is that in the big cities – Beijing and Shanghai especially – IP enforcement is faster and cheaper than in the US, even when the extra cost of translations are taken into account. Recently, it has become quite predictable as well with true trials on the merits – which is a major boon for business. The specialized IP courts have received a lot of practice recently, and the big city judges are getting better all the time. While the foreign litigant still needs to be aware of any political concerns, my impression is that more foreigner-involved cases fail due to legal mis-steps (e.g., Chint v. Schneider Electric) and bad advice than because of political pressure.

But of course, before you can enforce, you need to have granted/registered IP. The Chinese Patent Office (SIPO) is now, in my experience, world class. And I hear the same from my colleagues handling Chinese Trademark prosecution. In my experience, if the Chinese Patent Examiner really believes that there is an invention there, then s/he will work with you to come up with claims that you can both be satisfied with.

That being said, practice in front of the SIPO is NOT the same as in front of the USPTO – there are many Chinese regulations which will drive the US practitioner crazy (new matter and support objections being at the top of my personal list). However, that is a function of the local laws. Just as little things like “Best Mode” requirement and “Duty of Disclosure” are virtually US-only requirements, China has perhaps the world’s strictest new matter, support and clarity requirements.

If you file in China a chemical patent application “written for” the US, with little (or no) data and only one hypothetical example, you will have problems getting it granted in China. But with a little foresight and planning US practitioners can write applications that will grant in China. This hypothetical application contains a sound technical basis and explanation for the invention, data showing a surprisingly good result/benefit over the nearest prior art, and a claim breadth that is reasonably (in Chinese terms) supported by the data and/or the technical explanation.

As a business strategy, I know that even though they could, many companies/individuals don’t file this hypothetical application because it would “give up too much to their competition” or because “efficacy data is confidential”, etc. That is FINE – it is a business decision and part of their global IP strategy. However, if you’ve consciously made such a decision, then you have to live with it, perhaps even recognizing that by doing so you are likely giving up your protection in China.

If you haven’t considered how you will need to modify your patent drafting practices to satisfy international requirements – then I suggest that you get competent advice, or honestly – save your money and don’t file internationally, especially in China.

China’s Patent Law is only 26 years old, and it is regularly revised every 5 years. China’s Trademark Law is being updated right now. Also, while local protectionism may play a part in smaller cities, IP litigation in big cities is relatively reliable.

So if you are serious about getting IP granted and enforcing it in China, then things are looking up. The situation is not perfect by any means, and I will not pretend it is. However, it’s probably not as bad as you’ve heard. Patents last 20 years, and trademarks potentially forever. China and its legal system will change a lot in the next 20 years, so my advice is to think about what your company and/or your clients need now and in the future – and base your IP strategy on reality not just hearsay.

The Author

Michael Lin

Michael Lin

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