Will Lewis, student at the University of San Diego School of Law, engaged in some recent number-crunching to get a sense on the state of IP enforcement in China. Basically, Lewis took IP cases from the Beijing Courts, Guangzhou Intermediate People's Court, Jiangsu Courts, and Zhejiang Courts, segregated cases having domestic-only parties from cases having at least one foreign entity, and tabulated the outcomes of the cases. A summary of his findings appear below:
Lewis' analysis looked at cases from Beijing No. 1 Intermediate People's Court, Beijing No. 2 People's Court, and Beijing High People's Court between November 2005 and January 2007. In total, 24 of the published patent cases were litigated to a final judgment in the lower courts, where the patent holder prevailed 67% of the time. However, on administrative review (i.e. appeal), the reviewing court found the patent at issue invalid 52% of the time, valid 27%, partially valid 6%, and remanded 15% of the cases.
In the 15 patent cases that damages are reported, the average damage award was RMB 158,457 plus injunctions. The largest damage award was RMB500,000 for infringement of a patent. The company who won this award claimed RMB37,500,000 in damages.
Here, foreign patent holders prevailed in 100% of the 3 published cases (domestic disputed were adjudicated in favor of the patentee in 71% of 14 published cases).
Of the 3 patent case involving at least one foreign party, the average damage award was RMB56,666 plus an injunction.
Again, foreign patent holders prevailed in 100% of the 3 published cases. However, the Jiangsu courts had a heavier domestic docket, but also found in favor of the patentee in 71% of 84 published cases.
Injunctions were issued in all three of the decisions for foreign patent holders, but the damages award was reversed on appeal for one of the cases. The average damages award for other two cases was RMB275,000.
Here, the courts only heard 2 cases involving a foreign patent holder and found in favor of the patentee 505 of the time. With regard to domestic cases, Zhejiang appeared to have a heavy patent dockets, publishing 107 cases, where the patentee prevailed in 86% of the cases.
To view all the findings, click here (link)
Overall, Lewis concluded that (1) the winning rates are similar whether the plaintiff is domestic or foreign; (2) trade secret is the most difficult IPR to protect; (3) a higher percentage of cases involving foreign parties went to trial than cases involving only domestic parties; and (4) IP rights appear to have a surprisingly good chance of being protected, with the plaintiff prevailing over 75% of the time over all IP disciplines (patent, trademark, copyright).
- See also, Mei Ying Gechlik, "Protecting Intellectual Property Rights in Chinese Courts: An Analysis of Recent Patent Judgments," Carnegie Paper No. 78, January 2007 (link)