Despite many (often emotional and unsupported claims) to the contrary IPR enforcement in China does happen – even for foreign companies. Granted, the threat of IPR abuse is real (and is consistently one of the top challenges reported by businesses in China) but, despite developmental challenges , the situation is improving – and the courts are playing a positive role.
Dan Harris at China Law Blog notes:
“Today’s China Daily, in an article, entitled, “International Laws Applied in Local IPR [Intellectual Property Rights] Cases,” notes that from 2002 to 2006, the Beijing No 1 Intermediate People’s Court “ruled in favor of overseas parties in 60 percent of the 670 IPR cases.” If someone were to say that the foreign companies that brought these 670 cases probably had really strong cases and the success rate should actually should have been greater than 60 percent, I would not dispute that. I would also not dispute that this 60 percent rate is almost certainly lower in most other cities in China –though it also would not surprise me if it were actually higher in Shanghai. I also will not dispute that collecting on Chinese judgments is an arduous task unto itself.”
So the track record is not quite as bad as some might think. Recent successful cases (reported on by China Law Blog) include:
• Taking On Patent Infringment In China : 3M successfully sued a Chinese company over patent infringement. “The trial took only two hours and within a month, the court issued its ruling finding the respirator Dasheng sold had infringed 3M’s patents and awarding 3M approximately $31,000 in damages”.
• Hollywood Wins China Copyright Case Against Sohu.com Subsidiary : “Beijing First Intermediate Court just ruled in favor of the Motion Picture Association of America in its copyright infringement lawsuit against a subsidiary of Nasdaq-listed Sohu.com. Sohu offered an online subscription service through which customers could download American movies. The Court ordered Beijing Sohu Internet Information Service Co., a Sohu.com subsidiary, to pay 1,085,000 yuan (US$138,850) and publish a statement acknowledging its having engaged in infringement.
• Chinese Court Holds Firm On Viagra Trademark Infringment : “The [Beijing Number 1] Intermediate People’s Court ordered Beijing Health New Concept Pharmacy Company and Lianhuan Pharmaceutical Company to stop making their little blue pills and ordered Lianhuan to pay Pfizer 300,000 yuan ($38,000) in damages. Pfizer commenced this lawsuit in September 2005.”
And the legal environment is not standing still. In addition to a Supreme People’s Court announcement that “copyright and patent law violators would face longer jail terms and higher fines” another China Daily article notes:
“China’s top court effectively strengthened the intellectual property rights of famous brands and products yesterday when it issued a judicial interpretation rendering the Anti-Unfair Competition Law applicable to a wider array of cases.
The interpretation, published on the website of the Supreme People’s Court (SPC), detailed the clauses covering counterfeiting, false or exaggerated advertising, and infringements of commercial secrets. It was the first interpretation of the Anti-Unfair Competition Law since it was enacted in 1993.”
It seems clear (not only to the editors of China Daily, who seem keen to get the message out) that the Chinese government is taking the issue of IPR enforcement seriously, and that they want to get it under control. While foreign companies are among the beneficiaries of this policy, it is unlikely their lobbying has caused it. As I have reported before, it is more likely to tie in with the (rather unwieldy) “innovatisation” of the economy – and the provision of a secure environment in which Chinese companies can develop their own brands and technologies.
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