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IP Rights on Chinese Agenda

IP Rights on Chinese Agenda

This article titled” IP Rights on Chinese Agenda” authored by Lim, Esther H., Puknys and Erik R that was carried by the “Executive Counsel” elaborates on the concrete measures adopted by China for the protection of IP rights. What would be the specific IP strategies adopted by foreign companies operating in the Chinese markets?

We were recently part of various meetings that involved senior level private sector officials and government leaders hailing from California and China as part of an ongoing trade mission headed to the Shanghai region. The initiative was driven by Arnold Schwarzenegger, who was the governor of California, then. The purpose of the mission was to encourage cooperation between these nations, both of whose technological innovations are responsible for a chunk of their economic growth.

What surprised a first timer was the emphasis conferred upon IPRs by China, who made it the dominant topic of discussion. China has always been criticized by the US, particularly Hollywood for being lackluster towards IP violations. Interestingly, not only did the Chinese express interest in an open discussion on IPRs, they also appeared keen in trying out ways to enforce and expand them. And for those who have been closely associated with the Chinese IP community, this seemed like a logical progression of events.

China has been relentlessly trying to emerge free of its reputation of a nation that ignores protection of IPs. It has been putting in efforts to reposition itself as a breeding ground for innovations instead. China is not alone in its efforts. There were other countries too like UP itself that grossly violated IPRs till they realized that IPR protection was immensely necessary for garnering foreign investment.

A Rise in Patent Filing

China’s efforts to emerge from its foul reputation can be clearly visible in the speeding up of patenting activity in the nation. In a matter of one year, China elevated itself from the 6th to the 4th position as the world’s highest patent filers, under PCT or Patent Cooperation Treaty, which is a vehicle for global invention protection. In addition to this, Chinese companies filed over one million local patents with the patent office or the SIPO. And the number is slated for unabated growth in the years to come according to Tian Lipu, the commissioner of the SIPO. According to him, by the time the 12th 5-year plan draws to a close in 2015, the number of invention applications is likely to double.

The phenomenal growth registered by the Chinese economy in the recent times has been attributed to IPs. In fact, China has overtaken Japan, becoming the country with the second largest economy, in the whole world. As many as 30,000 IP cases in civil category were filed in 2009! Most of them are about trademark and copyright infringement. However, a sizeable number can also be attributed to patents, unfair competition and technology contracts.

Patent Strategies for China

With IP assets in China registering phenomenal growth, companies operating here must abide by the following IP strategies:

  1. Early Filing: Gone are the days when companies operating in Chinese markets could ignore procurement of local IP rights. Today, owners of foreign patents find it easier to approach Chinese law enforcement mechanisms. Therefore, obtaining Chinese patents for protecting their R&D investments seems the best move. Furthermore, patent filings in China has increased manifold. Once these are patented, foreign companies run the risk of getting trapped into charges of infringement. Having a strong patent portfolio will certainly provide for the required protection. Having local Chinese patents will help them to defend their cases assertively and avoid negative judgments. As China awards patents on a first come first serve basis, it would be advisable to file first before anyone else can stake claims on a given invention.
  2. Maintain Quality: Patents would vary from each other in terms of quality. When a company is in its inception stages, there would be an emphasis on the number of patents you have filed rather than the quality of each. No matter how predominantly high the rates of patent filing might be, a focus on quality would always be essential. This is because an invalid patent or one that’s too narrow in scope could eventually carry no value. Therefore, a patent should be filed only after strong evaluation of invention strategies, in a way so that strong patent protection can be achieved for withstanding future challenges.
  3. Preventing the Loss of IPs: IPs can be lost for several reasons including late filing and weak application. This could hint at insufficient disclosure and improper claiming of too much or too little. Inaction of employee oversight could be another primary reason. Therefore, it would be important to develop and implement strong IP procedures for maintaining company information and confidentiality inclusive of R&D information, and ensuring proper ownership of ensuing property rights are considered critical in maintaining and developing a valuable portfolio. Preventing the loss of IPs can ever be overemphasized in countries like china where the investments on research and development continues to scale new heights and technological advancements leads to faster growth of intellectual property.
  4. Avoiding Infringement: Avoiding infringement is as good as building intellectual properties. Planning to avoid infringement must start on the initial stages of product planning.

As China picks up pace in terms of IP development, strong IP protection becomes more and more of a necessity. IP protection has become mandatory for being a part of this phenomenal growth process called China.

Note: The preceding is a summary of an article found though our research, and is provided here with editorial comment for members only. Please see the full article at the following link for full original content-

The New Asia Innovation Team