The IPR landscape of China

It is becoming increasingly clear that both the Chinese Government and Chinese companies are taking intellectual property rights (IPRs) much more seriously today than in the past.

For example, in 2008, over 800,000 patent and design applications were filed in China.  This is a four-fold increase since 2001.  The vast majority of these applications are made by Chinese companies, and not US or European companies.  This is a little surprising and shows how far intellectual property awareness and use has come in China in a short period of time.  In tandem, the number of patent infringement cases filed at the Peoples Court of China has shown a similar rate of increase.

Further, according to Mr HE Zhonglin (Presiding Judge of the Supreme People's Court), who spoke at an international meeting of patent attorneys recently in Shenzhen, much effort is being made in developing a strong and highly specialised judicial system in China.  As one example of this process 1,935 new IPR Judges were trained between 2005 and 2009.  Also, Mr HE said that a goal of the Supreme Peoples Court is to "build up a more transparent and powerful judicial system".  Recently, we learned that the Chinese Government have begun to subsidise patent applications made by Chinese companies, both in China and abroad.  Even without this subsidy, China can boast that largest filer of international patent applications in 2008, Huawei, who make and install mobile telecommunications systems.  It appears we are beginning to see signs of a serious shift in the mind set and focus of the Chinese in relation to IPRs.

This effort appears to be working, as one recent success story involving a British electric kettle control manufacturer Strix, illustrates.  In February 2010, Strix managed to win a lawsuit in Beijing against several Chinese manufacturing companies and were awarded an unprecedented amount of damages.  Strix chief executive Paul Hussey was quoted in the Financial Times as saying the company had "increasing faith in China's legal system".  Yin Xintian, spokesman of the Chinese State Intellectual Property Office, commenting on the case pledged to increase awareness of IPRs in China, "the awareness including both respecting others' IPR and protecting our own".  Dr John-Paul Rooney of Appleyard Lees adds that "during my recent trip to China the importance of European businesses owning IP in China was stressed repeatedly".

So, what does these mean for British companies doing business in China?  Well, it appears that companies can do business in China with more confidence.  Further, it would appear to be prudent for British businesses to treat China no differently to the US in relation to IPRs.  Enforcing IPRs in China will involve time, effort and money.  However, with a more transparent judicial system, and with much more sophisticated and IP-aware Chinese companies, the process is getting easier, and will most likely become even easier in the future.