Patent Protection and
Enforcement in the PRC
28 January 2014
Including analysis from
A report commissioned by Huawei Technologies
Contents
Introduction ........................................................................... 4
Executive Summary ................................................................ 5
Legal Landscape in the PRC ................................................... 6
Foreword ......................................................................... 6
1.
Legal framework ........................................................7
2.
Patent protection and prosecution ............................ 9
3.
Patent Enforcement ................................................. 13
Conclusion ..................................................................... 23
An Assessment of Developments over the Last Decade ........ 24
Foreword ....................................................................... 24
1.
Introduction ............................................................ 25
2.
Patent prosecution .................................................. 25
3.
Patent enforcement ................................................. 34
Conclusion ..................................................................... 42
Patent Protection and Enforcement in the PRC
Introduction
This report aims to provide an in depth description and assessment of the current status of the
protection and enforcement of intellectual property rights (IPRs), more specifically patents, in
the People's Republic of China (PRC).
The first chapter, authored by Bird & Bird LLP, provides a qualitative analysis of the legal
framework governing patents in the PRC, including its evolution, legislation in the making and
remaining areas for improvement. On certain topics, comparisons have been made with the EU,
German and US legal systems to provide a broader context and perspective to an assessment of
the PRC legal system.
The second chapter, authored by The Economist Intelligence Unit, offers a quantitative analysis of
how patents are actually protected and enforced in the PRC through the analysis of key statistical
data. These data have been validated through structured interviews with legal practitioners
experienced in patent registrations and/or enforcement in China. The methodology and the data
used are explained in more detail in this chapter.
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Patent Protection and Enforcement in the PRC
Executive Summary
Previous studies already showed the significant progress booked with respect to IPRs'
protection and enforcement in China1. This dual survey by Bird & Bird, an international
law firm, and The Economist Intelligence Unit, the world's foremost provider of country,
industry and management analysis, shows that progress has continued and that we are
probably nearing the point where China's protection and enforcement regime is only
different in some respects, but not any more of a lesser standard, as compared to many
other countries.
On paper, the law contains all the elements, at administrative and judicial levels, which
are needed to allow proper procurement and enforcement of patents (other types of IPRs
were not surveyed).
On the enforcement front, all usual measures are now available in China, including
nullity and infringement procedures, but also sometimes less obvious declaratory
judgments and interim injunctions. China is now also compliant with the WTO
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS
Agreement). Damages remain on the low side, but the introduction of punitive
damages in the coming amendment to the Patent Law should hopefully strengthen
enforcement.
In fact, figures clearly show a tremendous and continued increase in patent filings, in
almost all categories and sectors. Feed-back shows that quality of the examination and
prosecution is now considered to be at a very good level, probably not the least as a result
of Chinese examiners having been trained by, amongst others, European Patent Office
(EPO) specialists.
Enforcement is increasingly sought through administrative cases as they are quicker and
more efficient in simple patent cases. Civil procedures continue to be used resulting
notably in injunction and damages (including for loss of profit).
Of course some elements could be improved further, such as the absolute level of
damages granted, the technical competence of the judges and the discrepancies between
provinces as to the uniformity and quality of court decisions.
A very important element identified by The Economist Intelligence Unit is that even if
damages awarded to foreign plaintiffs may on average still be lower, statistics show a
higher proportion of foreign companies winning their intellectual property cases in
China.
A. Cox, K. Sepetys, “Intellectual Property Rights Protection in China: Trends in Litigation and Economics Damages”,
NERA Economic Consulting, 2009, http://www.nera.com/extImage/PUB_IPR_Protection_China_0109_final.pdf
1
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Patent Protection and Enforcement in the PRC
Legal Landscape in the PRC
by Bird & Bird LLP
FOREWORD
In this part of the report we aim to provide the reader a general sense of the legislative
framework on patent in China, to review the recent developments in patent prosecution
and enforcement, and to compare the status achieved today with international practices.
Modern intellectual property (IP) laws in China have a short history of 30 years. They are
a complete rebuild based on international treaties with elements modelled after the legal
systems of other countries, most notably Germany.
The three pillars of PRC IP laws: Trademark Law, Patent Law, and Copyright Law, have
all undergone two to three major amendments since their inception. China continues to
assimilate the experience of other countries, including US, Europe, and Japan, with the
stated goal of creating an IP regime that encourages innovation. The speed of change is
remarkable.
The idea that China’s legal system is distinct from that in the West is usually overstated.
In a recent interview with Managing IP Magazine, UK High Court Judge Colin Birss
commented that it was the similarities rather than the differences between the Chinese
and the UK patent systems that caught his attention during his visit to China. In a
discussion on preliminary injunction, Mr Justice Birss observed that China's Supreme
People's Court (SPC) were wrestling with the same concerns and balancing similar
interests as a UK judge would have done.
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Patent Protection and Enforcement in the PRC
1. Legal framework
1.1
Sources of patent law
The PRC Patent Law was first enacted in 1984 and became effective on 1 April 1985. The
PRC Patent Law has been amended three times since then. The First Amendment in 1992
was driven by the Memorandum of Understanding on the Protection of Intellectual
Property signed between China and US. Some scholars described this as a “quantum
leap” in the law to stimulate technology transfer into the country. The Second
Amendment in 2001 was enacted to meet China’s obligations under the TRIPS
Agreement, in preparation for China’s accession to the World Trade Organization. The
Third Amendment in 2010 was prompted by issues peculiar to China, both in an attempt
to encourage indigenous innovation and to strengthen patent protection. Just two years
after, the State Intellectual Property Office (SIPO) released the draft for the Fourth
Amendment for public consultation in August 2012, and the next draft is forthcoming.
With each amendment to the PRC Patent Law, the Implementing Regulations of the PRC
Patent Law are also updated, elaborating and supplementing the provisions of the PRC
Patent Law.
In addition to the PRC Patent Law and its Implementing Regulations, judicial
interpretations and opinions issued by the SPC are another source of legal authority in
China. Judicial interpretations and opinions mainly serve two functions. First, the SPC
uses this as an opportunity to answer questions from lower courts regarding disputes
with common fact patterns. Secondly, it aligns the application of the law by different
courts. In the patent arena, the most important judicial interpretations issued by the SPC
are the “Guidelines on the Application of the Law regarding Trials of Patent
Infringement Cases” (2001 Judicial Interpretations) and the “Interpretations on Several
Issues Regarding the Application of Law in Patent Infringement Disputes” (2010
Judicial Interpretations).
Moreover, to promote judicial consistency in patent cases, the Higher People’s Courts in
several provinces also issue comprehensive trial guidelines from time to time. For
example, the Beijing Higher People's Court issued the latest "Guidelines on the
Determination of Patent Infringements" in September 2013. The Guidelines have 133
sections covering aspects of claim interpretations, infringement analysis, as well as
defences.
By Article 3 of the PRC Patent Law, the SIPO is empowered to promulgate administrative
regulations. The SIPO rulemaking encompasses “Examination Guidelines” and other
measures relating to patent administration such as “Measures for Compulsory Licensing
(2012)”, “Measures on Patent Marking (2012)”, and “Measures for Administrative
Enforcement of Patent (2010)”.
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Patent Protection and Enforcement in the PRC
1.2 Administrative system
Founded in 1980 as the Chinese Patent Office, SIPO is responsible for patent
examination, invalidation and maintenance. SIPO has its central office in Beijing and
regional accepting offices in 26 cities. It has seven technology divisions: mechanics,
electricity,
telecommunication,
pharmaceuticals
and
bioscience,
chemistry,
optoelectronic technology and materials engineering.
Internationally, SIPO is a member of IP5, which is a forum of the five largest intellectual
property offices in the world set out to facilitate the examination process for patents
worldwide.
Sitting within SIPO, the Patent Re-examination Board (PRB) is responsible for
reviewing patent applications rejected by SIPO examiners and presiding over patent
invalidation proceedings. PRB panels are selected from SIPO’s more experienced
examiners. The PRB decisions are subject to administrative appeal to the Beijing No. 1
Intermediate Court and on further appeal to the Beijing Higher People’s Court.
1.3 Judicial system
China has a four-level court system, comprising Grass-Root Courts, Intermediate
People’s Courts, Higher People’s Courts and the SPC. By Article 2 of the 2001 Judicial
Interpretations, only designated courts would have first-instance jurisdiction over patent
cases. By the end of 2012, there were 83 intermediate courts that are so designated.
Given the importance attached to cases involving foreign parties, the threshold of
monetary claim is lower for foreign-related disputes to be brought in a higher level of
courts when compared with domestic disputes. For example, in Beijing, if the patent
dispute is between domestic parties, the amount of monetary claim needs to exceed RMB
200 million in order for the case to begin at the Beijing Higher People's Court rather than
the lower courts, whilst the threshold for foreign-related dispute is RMB 100 million.
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Patent Protection and Enforcement in the PRC
2. Patent protection and prosecution
2.1 Scope of protection
There are three types of patents recognized under Chinese law, namely, invention, utility
model and design patents. The term of protection for invention patents is 20 years from
the filing date. Utility model and design patents are both protected for 10 years.
In line with Article 27 of the TRIPS Agreement, Article 25 of the PRC Patent Law sets out
subject matters that are excluded from patent protection in China. They are: scientific
discoveries, rules and methods for mental activities, methods for the diagnosis or
treatment of diseases, animal and plant varieties, and substances obtained by means of
nuclear transformation and designs of two-dimensional printing.
(a) Novelty
By Article 22 of the PRC Patent Law, a patent must be novel, inventive, and have
practical applicability in order to qualify for protection. Novelty requires an invention to
be new compared to the prior art. As regards the test on novelty, the Third Amendment
of the Patent Law adopts the absolute novelty standard under Article 22(2), which
expands the scope of prior art to worldwide publications, public use or disclosure.
(b) Inventive step
The test on inventive step is set out in Part 2, Chapter 4, Section 3.2.1.1 of the
Examination Guidelines. It requires the examiner to conduct a three-step analysis: (i)
determining the closest prior art, (ii) determining the distinguishing features of the
invention from the prior art and the objective technical problem solved by the invention,
and (iii) determining whether or not the invention, starting from the closest prior art and
the objective technical problem, would have been obvious to a person skilled in the art. In
this way, China has adopted the same test as the European Patent Office's problem and
solution approach to inventiveness.
By contrast, the respective tests adopted in Germany and the US are slightly different.
The German Patent Office draws a comparison of the claimed invention to the prior art
considering the totality of knowledge as disclosed in the prior art. It then evaluates
whether the person skilled in the art could have easily obtained the claimed invention
when considering the prior art without being inventive himself. What is decisive is the
overall effect of the invention (so-called “Gesamtwirkung der Erfindung”). The German
approach is less formalistic than the problem and solution approach applied by the
European Patent Office. In the US, the US Supreme Court set out the following factors
(Graham et al v John Deere Co., of Kansas City et al., 383 U.S.1 (1966)): (i) the scope
and content of the prior art, (ii) the level of ordinary skill in the art, (iii) the differences
between the claimed invention and the prior art; and (iv) objective evidence of nonobviousness.
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Patent Protection and Enforcement in the PRC
Similar to the US, China also takes into account the objective evidence of nonobviousness in assessing inventive step. The list of the so-called "secondary indicia to
inventiveness" (as distinguished from the primary test set out above) can be found in
Part 2, Chapter 4, Section 5 of the Examination Guidelines, being evidence that the
invention (i) solves a long-felt but unresolved technical problem, (ii) overcomes technical
prejudice, (iii) produces unexpected technical effect, or (iv) achieves commercial success.
In the European Patent Office, similar secondary indicators for inventiveness are defined
in Part G, Chapter VII, 10.1 to 10.3 of the Examination Guidelines. The secondary
indicators are similarly applied by the German Patent Office and the German Court when
assessing inventiveness.
(c) Practical applicability
Article 22(4) of the PRC Patent Law requires that “the invention or utility model can be
made or used and can produce positive results”. The requirement is analogous to the
industrial applicability requirement under the European Patent Convention (EPC).
The practical usefulness constitutes a mandatory requirement of the invention as defined
in Section 1 German Patent Act (PatG) and article 52 of the EPC, i.e. the invention must
satisfy a need whereas completely useless proposals cannot be regarded as patentable
even if they turn out to be novel and inventive. Technical curiosities may however not be
regarded as useless, as they can for instance serve for entertainment purposes (c.f.
Schulte/Moufang, Article 52 EPC, margin-no. 47).
US patent law does not have a separate requirement on practical applicability, but the
basic statement of what is patentable can be found in Section 101 of the patent statute,
which requires that the invention be "new and useful". "Useful" has been held to mean
that it provides some identifiable benefit and is capable of use.
2.2 Patent examination procedure
Procedures and rules relating to examination of invention patents are set out in details in
the Examination Guidelines issued by SIPO.
The administrative procedures for patent examination and invalidation are similar to
that in the other major patent offices. The following comparison graph is taken from
www.fiveipoffices.org:
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Patent Protection and Enforcement in the PRC
2.3 Pilot programs to leverage fast-track patent examination
To facilitate work sharing with other patent offices, a Patent Prosecution Highway (PPH)
has been implemented among major patent offices. SIPO has actively participated in the
pilot programs, reaching PPH agreements with patent offices in Japan, Korea, USA,
Germany, Russia and Canada. Consequently, for applications claiming a priority from
those countries, an applicant may request for accelerated examination under the
agreements if it receives a written opinion that at least one claim has satisfied
patentability requirements.
In 2012, SIPO also issued “Measures on the Administration of Priority Review of
Invention Patent Applications” that allow applicants to seek accelerated examination,
aiming to complete examination within one year after the approval of the applicant’s
priority examination request.
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Patent Protection and Enforcement in the PRC
2.4 Efforts to promote transparency
Statistics on patent filing, invalidation and maintenance have been frequently updated
on the SIPO website at http://www.sipo.gov.cn/tjxx/. The PRB also maintains a website
providing
access
to
the
invalidation
decisions
at
http://app.siporeexam.gov.cn/reexam_out/searchdoc/search.jsp.
To substantiate this effort of promoting transparency, SIPO has released drafts of
administrative measures and examination guidelines on its website for public
consultation before the enactments.
2.5 Utility models
Article 2(3) of PRC Patent Law defines utility model as “any new technical solution
relating to the shape, structure or their combination, of a product, which is fit for
practical use”. It has a shorter term of protection (10 years) but is a faster way to get a
fully enforceable patent right. To obtain a utility model patent, there is no need to go
through substantive examination on whether the patent is novel or inventive. This is
identical to the practice in the German Patent Office, as the utility model regime is
largely borrowed from the German system to provide a low cost alternative of patent
protection.
The utility model regime has attracted concerns in recent years. They have been
criticised as “junk patents” due to lack of substantive examination before grant. SIPO has
actively responded to this criticism. Specifically, the 2010 Examination Guidelines
provide that if utility model applications clearly lack novelty, examiners are encouraged
to conduct patent search on their own initiative. In order to fully address the quality
issue, SIPO has engaged in another round of amendments to the Examination
Guidelines. In a draft released in February 2013, relevant provisions have been revised
such that examiners are encouraged to conduct prior art search in examining utility
model applications.
2.6 Scope of amendments
Of the list of common complaints by the patent owners, one of which used to be that the
SIPO examiners and the PRB have traditionally adopted a mechanical approach to
allowing amendments pre- and post-grant. Article 33 of PRC Patent Law was interpreted
very strictly. Pre-grant amendments are only allowed if they can be directly and
unambiguously derived from the original specification. Post-grant amendments are only
allowed if they are merely a combination or deletion of individual claim in the original
wording as granted.
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Patent Protection and Enforcement in the PRC
However, two recent SPC cases, Ink Cartridge case (2012) and Simcere case (2012),
relaxed rules on permissible amendments pre- and post-grant. The SPC affirmed that the
underlying principle of Article 33 is to ensure that applicants have an opportunity to save
their patent applications by making amendments in light of newly identified prior art.
The SPC held that if the amendment is obvious to one skilled in the art, it should be
deemed within the scope of the original disclosure.
3. Patent Enforcement
Modelled after the German Patent Law, China employs a bifurcated system for patent
litigation, under which patent validity and infringement are adjudicated separately.
There are three routes of enforcing a patent in China, namely judicial, administrative, or
criminal route, whilst validity is determined centrally by the Patent Re-examination
Board (PRB).
3.1 Scope of Protection
(a) Claim construction
China mostly borrows claim construction doctrines from the US, such as the doctrine of
equivalents, file wrapper estoppel, and construction of means-plus-function claims. The
2010 Judicial Interpretation issued by the SPC codified rules for claim construction
under Articles 1 to 7. The Higher People’s Courts in provinces in Beijing and Jiangsu have
also issued patent trial guidelines, which promulgate uniform rules within the province
to promote judicial consistency.
Article 59 of the PRC Patent Law states that the scope of protection for invention or
utility model patents is defined by the patent claims. Article 2 of the 2001 Judicial
Interpretation stipulates that the content of the claim is determined by the
understanding of a person skilled in the art after reading the specification and drawings.
Article 3 goes on to state that extrinsic evidence such as reference books and textbooks
may be used in cases where the meaning of a term cannot be clearly determined
intrinsically, i.e. by using the specification, drawings, relevant claims and examination
file wrapper. Those general principles on claim construction are consistent with claim
construction law in other countries.
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Patent Protection and Enforcement in the PRC
(b) Doctrine of equivalents
Article 7 of the 2010 Judicial Interpretation recognizes both literal infringement and
infringement by equivalents. Literal infringement arises where the alleged infringing
technical scheme includes all the technical limitations of the asserted claim, whilst the
doctrine of equivalents extends this to catch infringement by feature as one that “uses
basically the same means, perform basically the same function, and produce basically
the same result as the stated technical features, which can be contemplated by one
skilled in the art without any inventive labour”.
The doctrine of equivalents was first recognized under Article 17 of the 2001 Judicial
Interpretation, using the same test as that under the US law. The SPC has discussed the
application of doctrine of equivalents in a number of recent cases. It also cautioned
against mechanical application of the doctrine of equivalents. Most recently, Articles 41
to 55 of the Beijing Patent Infringement Guidelines delineate detailed rules regarding the
doctrine of equivalents to be applied by lower courts in Beijing.
(c) File wrapper estoppel
Modelled after the US claim construction jurisprudence, file wrapper estoppel is codified
under Article 6 of the 2010 Judicial Interpretation. Under a file wrapper estoppel, a
patentee is estopped from claiming one construction in prosecution or invalidation stage
and later claiming the contrary in an infringement suit.
3.2 Restricted acts
In line with Article 28(1) of the TRIPS Agreement, the PRC Patent Law provides under
Article 11 that it is an infringement to manufacture, use, offer to sale, sell, or import a
patented product. In relation to a patented process, it is an infringement to use the
patented method, or to use, offer to sale, sell or import the product directly obtained
through the patent process. The scope of restricted act under Article 11 is commensurate
with what is required under Article 28(1) of the TRIPS Agreement.
3.3 Defences
Article 30 of the TRIPS Agreement stipulates the basic principle that member countries
may make provision for limited exception to patent rights. In addition to the defence of
non-infringement, the PRC Patent Law also sets out a list of affirmative defence
including prior art defence, prior use, exhaustion of rights, temporary entry into China,
scientific research and experiments, clinical trials, entitlement of a compulsory licence,
and violation of the Anti-Monopoly Law.
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Patent Protection and Enforcement in the PRC
The list of defences is largely similar to that available in Germany and in the US. In the
US there is a further possible defence, inequitable conduct by the patentee during patent
prosecution making the patent unenforceable. However, recent developments have made
this defence harder to establish.
3.4 Administrative Procedures
China provides a unique patent administrative enforcement regime. Pursuant to Article
60 of the PRC Patent Law, administrative authorities for patent affairs are empowered to
enforce patents. Such administrative authorities comprise SIPO on national level and
local intellectual property bureaus on provincial and city level. Administrative
enforcement is intended as a cost and time efficient alternative for patent holders to
eliminate infringement, especially for those straightforward patent cases such as utility
model or design infringement.
According to the Measures for Administrative Enforcement of Patents promulgated by
SIPO in 2010, a patent holder may submit a patent infringement complaint with its local
intellectual property bureau for investigation and enforcement. However, a patentee that
has already brought an infringement suit before the civil court would be barred from
using the administrative route.
Upon finding infringement, the local bureau may order the infringer to cease the
infringement and order the destruction of infringing products and/or tools and
equipment employed to manufacture the same.
An administrative order is subject to appeal to the People’s Court within 15 days from
receiving the notification of the order.
3.5 Court Procedures
Article 28 of the Civil Procedure Law provides that a court designated for adjudicating
patent disputes would assume jurisdiction if it sits in the province of the locus of
infringing acts, or the domicile of the defendant. Article 5 of the 2001 Judicial
Interpretation in turn defines the locus of infringement as the place where the alleged
infringer manufactures, uses, sells, offers for sale, or licenses the infringing product, or
the place affected by said infringement. For cases involving more than one defendant,
Article 21 of the Civil Procedure Law stipulates that the court’s jurisdiction over one
defendant will be extended to all other defendants. The great majority of cases are filed
in Beijing, Shanghai and Shenzhen owing to the experience of the patent judges there.
This is similar to Germany. In Germany, patents are enforced in legal actions before Civil
Courts. In total 12 Regional Courts have jurisdiction for patent infringement disputes.
The great majority of cases are filed in Düsseldorf, Mannheim, Munich and sometimes
Hamburg. This is due to the acknowledged expertise and experience of the respective
judges. Usually, the jurisdiction is determined by the place where a tortious act was
committed which provides the plaintiff a free choice if the infringing product is offered
Germany-wide, e.g. on the internet.
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Patent Protection and Enforcement in the PRC
By Article 6o of the PRC Patent Law, a patentee or an interested party has the right to
bring infringement proceedings. Moreover, an exclusive licensee can bring an
infringement suit in its own name and without giving prior notice to or obtain
permission from the patent owner. This is also true of exclusive licensees in the US and
in Germany.
The PRC Civil Procedure Law governs the patent infringement proceedings before the
civil courts. A patent holder may commence an infringement proceeding by filing a
complaint with a People’s Court. The court will issue a notice of acceptance to the
plaintiff if the complained subject matter is within its jurisdiction and the complaint
complies with the filing requirements. The court is required to serve the named
defendant within five days from accepting the case. Where the defendant resides outside
of China, the court usually makes extraterritorial service under the Hague Convention.
The time limit for a Chinese defendant to file a defence is within 15 days of receipt of the
complaint. For foreign defendants, the response deadline is 30 days. Jurisdictional
objection, if any, must also be brought with the court within the same defence period.
Article 153 of the new Civil Procedure Law allows immediate appeal of adverse decisions
regarding case acceptance and jurisdictional objection.
Once the defendant has been properly served and/ or timely responded, the lawsuit will
proceed to the stage of evidence submission and exchange. The court will usually set a
time limit of 30 days for evidence exchange from the later of the service of the defence or
the acceptance of the case. An extension of time is possible upon application with the
court.
After the evidence exchange hearing, the court will schedule a date for trial hearing. Trial
usually occurs within six to twelve months from filing the complaint for simple cases, but
can take up to years for complicated cases. At the hearing, both parties formally present
their arguments and evidence through opening statements, evidence examination,
debate and closing statements. The court may order for further trial hearings if the case
involves complex or novel issues. A judgment can be expected within a few months from
the trial hearing, depending on the complexity of the case.
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Patent Protection and Enforcement in the PRC
If the defendant intends to challenge the validity of the patent and uses that as a basis to
apply for a stay of the infringement proceedings, it must file the invalidation petition
with the PRB during the defence period, which is 15 days from the receipt of the
complaint (or 30 days for a foreign defendant). An invalidation proceeding before the
PRB is usually presided by a panel consisting of three SIPO examiners. During the oral
hearing, the PRB panel examines each ground of invalidation and evidence supporting or
refuting the same, often by questioning both sides. The PRB usually renders a decision
on the validity of the patent within six to eight months from the commencement of the
invalidation proceeding. It may uphold or invalidate any or all of the claims requested in
the invalidation proceeding or allow post-grant amendments.
One criticism amongst the court users (both domestic and foreign) is the lack of
consistency in case schedule. By Article 136 of the Civil Procedural Law, a party is only
required to be given three day advance notice before the trial hearing. This causes
problem on the part of the parties to plan their case preparation properly, and is a
concern faced by both domestic and foreign litigants.
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Patent Protection and Enforcement in the PRC
In a patent infringement action before a Chinese court, the procedural rules are relatively
simple compared to other jurisdictions. A trial hearing could usually be expected within
eight to twelve months from the commencement of the lawsuit. In some simple cases, it
could be as fast as four months, whilst in some complicated or heavily disputed cases
there could be delays up to two years or more. This is similar to Germany, where an oral
hearing can take place as soon as six to twelve months after the complaint is filed, but in
some cases, it may take almost two years.
By contrast, most US patent litigation is conducted in the federal courts, and validity and
infringement are tried together. Either party has the ability under the US Constitution to
request trial by jury, and over half of all patent cases are decided by juries. However,
claim construction is solely the role of the judge and carried out in a pre-trial hearing
called "Markman hearing". The average time to trial is two and a half years, although in a
few federal districts a patent case can come to trial in about a year. The other venue for
patent cases is in the International Trade Commission (ITC) which deals with imported
goods. Currently about 90% of ITC cases relate to patents. There are statutory time limits
for ITC cases, which are tried by a judge alone and typically go from filing the complaint
to Commission decision in 18 months. All patent cases, district courts and ITC, are
appealed to the Court of Appeals for the Federal Circuit (CAFC), which usually hears
and decides appeals in less than a year.
3.6 Basis of declaratory judgment actions has been affirmed by the SPC
Alleged infringers may institute declaratory judgment action of non-infringement in
limited circumstances pursuant to Article 18 of the 2010 Judicial Interpretation. Such
action is nonetheless only viable where the patent holder issues a warning against the
declaratory plaintiff but fails to bring an infringement suit within a reasonable period of
time after the alleged infringer reputes infringement.
In Germany, the plaintiff has to show a special interest in a declaratory judgment. A
positive declaratory proceeding is generally not admissible, because a full infringement
action would discuss the same questions and has a legal priority as the more effective
means. A negative declaratory action requires a legal relationship between the parties
and the plaintiff’s interest in the requested declaration. These requirements are usually
met only in cases where the patent holder alleges infringement, e.g. by way of a warning
letter or another binding allegation. Before such activities, a negative declaratory action
is inadmissible.
The criteria for bringing an action for a declaratory judgement of non-infringement
and/or invalidity in the US are less strict than in Germany. None of the restrictions
listed in the previous paragraph apply, but the action must satisfy the constitutional test
of the presence of a “case or controversy” as the courts will not answer hypothetical
questions. A 2007 Supreme Court decision widened the basis for bringing such actions,
so that an express threat of litigation is not necessary. Once the constitutional test is met
an action can be filed immediately.
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Patent Protection and Enforcement in the PRC
3.7 Interim measures
Interim reliefs including preliminary injunctions, asset preservation orders and evidence
preservation orders are available under Articles 66 and 67 of the PRC Patent Law. The
new Civil Procedure Law, which came into effect on 1 January 2013, provides a basis for
such interim measures in a civil action generally.
According to Articles 100 and 101 of the Civil Procedure Law, all three types of interim
measures may be sought before or during a civil proceeding. To apply for a preliminary
injunction, a patent holder bears the burden to prove that an infringer is carrying out or
is about to carry out the alleged infringing acts; and that without the injunction it would
suffer irreparable harm. As for evidence preservation orders, a court requires the patent
holder to show that the evidence will likely be lost or become difficult to obtain in future,
or that the plaintiff is otherwise unable to collect the evidence. Asset freezing orders are
granted against a potential defendant to ensure that there will be assets to satisfy the
judgment if ultimately granted. The court is responsible for the execution of the interim
measure if so granted.
The issues faced by the Chinese courts in deciding applications for preliminary
injunctions are similar to that in the other countries. It is understood that the SPC is
working on another judicial interpretation on this topic.
3.8 Stay in utility model and invention patent cases
In a patent dispute involving concurrent proceedings before both the Court and the PRB,
the infringement court may or may not grant the stay pending the validity decision to be
issued by the PRB. Utility model and invention patent cases have been treated differently
in this regard. To alleviate problems relating to potential abuse by utility model patents,
there is a stronger presumption towards stay in utility model cases. By Article 9 of the
2001 Judicial Interpretations, stay in utility model infringement cases is required subject
to three limited exceptions.
By contrast, stays are more difficult to obtain in invention patent cases, as it is a matter
of judicial discretion under Article 10 of the 2001 Judicial Interpretations. However, in
practice, even if the Court does not formally grant the stay, the pending invalidation
proceeding may still influence the timeline and outcome of the concurrent infringement
proceeding.
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Patent Protection and Enforcement in the PRC
3.9 Mechanism of expert witness
Although there is no formal mechanism of expert witness in patent litigation in China,
the Civil Procedure Law has recognized two types of experts, expert appraiser and expert
assessors. For complex technical issues including infringement, courts often rely on
court-appointed experts or reports from neutral Judicial Appraisal Centres. Courts will
usually seek both parties’ assent prior to the appointment of a Judicial Appraisal Centre.
On the other hand, expert assessors are non-parties with specialized knowledge in
scientific or technical fields. By allowing expert assessors to explain the technical
background of the underlying dispute, courts are better informed about the technical
issues for adjudicating patent cases.
There has been criticism from both domestic as well as foreign parties on the mechanism
by which technical evidence is assessed. Judges without technical background tend to
put a lot of weight on reports produced by judicial appraisal institutes. However, in some
technical fields, only a small number of judicial appraisal institute and specific testing
institutes within China are qualified to opine on the subject matter, and there are
concerns with their independence. There are also criticisms from both domestic and
foreign users in relation to the quality, costs and length of time required by these
institutes to produce their reports.
The Civil Procedural Law has already introduced new provisions allowing one party to
cross examine the content of the judicial appraisal reports by appointing its own expert.
Nonetheless, it is hoped that better guidelines would be issued in future on how expert
testimony would be introduced and assessed, and discretions could be given to the
judges to accept analytical reports produced by internationally recognised testing
institutes outside of China.
3.10 Remedies
(a) Damages
By Article 65(1) of the PRC Patent Law, a defendant that is found liable for patent
infringement shall compensate the patent holder for the actual losses suffered because of
the infringement. Article 65 provides a hierarchy of bases for ascertaining the actual
losses, (i) patent holder’s lost profits, (ii) infringer’s illegal profits, and (iii) one to three
times the amount of reasonable royalties. Article 16 of the 2010 Judicial Interpretation
clarified that when damages are calculated based on infringer’s profits, apportionment
must be exercised, i.e., profits of the infringer that are attributed to factors other than
employing the patented technology shall be excluded.
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Patent Protection and Enforcement in the PRC
Article 65(2) of the PRC Patent Law stipulates that where the actual damages are not
ascertainable, the Court may impose statutory damages ranging from RMB 10,000
(approx. EUR 1,212) and RMB 1,000,000 (approx. EUR 121,184). In determining the
amount of statutory damages, Article 65(2) requires the Court to examine factors such as
types of patent rights and nature and circumstances of the infringing act. Moreover, the
SPC stated in a judicial opinion that if the evidence shows that the defendant’s illegal
profits exceed the upper limit of statutory damages, an appropriate amount beyond the
statutory maximum could be assessed. Lower courts have followed this guidance in
judicial practice, although the general level of damages awarded is still considered to be
low.
The draft Fourth Amendment of the PRC Patent Law has proposed the introduction of
punitive damages against wilful patent infringement. This is a common feature proposed
in the next amendments to the majority of intellectual property laws, and the concept of
punitive damages is already introduced in the Third Amendment of the Trademark Law
passed in August 2013.
(b) Permanent injunctions
Upon a determination of patent infringement, permanent injunction would almost be
invariably granted under Article 134 of the Civil Procedure Law. In a 2009 judicial
opinion, the SPC suggested that in some exceptional circumstances, sufficient
compensation may be granted in lieu of an injunction. The Chinese courts so far have
only exercised this power to deny permanent injunction request in two patent cases
notwithstanding a finding of infringement, both on the basis of environmental concerns
and public interests.
(c) Recovery of costs and attorneys’ fees
Recovery of costs and attorney’s fees are available upon request in some circumstances.
Article 65(1) of the PRC Patent Law provides that the damages paid to the aggrieved
patent holder may include reasonable expenses incurred in stopping and eliminating the
infringement. In addition to attorney's fees, reasonable expenses usually also cover
investigation costs, notarization fees and translation fees. The attorneys’ fees granted by
the courts are still relatively low, though this also needs to be considered in light of the
relatively low average salary level in China.
In Germany, the costs of proceedings depend on the so-called “value under dispute”
which should reflect the economic interest of the plaintiff in the case. On basis of this
value under dispute the statutory court costs and lawyer’s and patent attorney’s fees are
calculated. In infringement cases as well as in validity proceedings the total costs include
the court costs, which the plaintiff has to advance, and the lawyer’s and patent attorney’s
fees of each party. Typical values under dispute in patent infringement and nullity
proceedings are e.g. EUR 250,000 for a minor case and EUR 1,000,000 for a medium
case. With a value under dispute of EUR 250,000 the court fees would amount to EUR
5,268 while the lawyer’s fees and patent attorney fees would amount to EUR 20,300 per
party. With a value under dispute of EUR 1,000,000, court fees would amount to EUR
13,368 while lawyer’s fees and patent attorney fees would amount to EUR 22,412 per
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Patent Protection and Enforcement in the PRC
party. However, fee arrangements on hourly fees as alternatives are usual. Generally the
statutory costs and fees are recoverable form the losing party.
In the US in general only costs, such as filing fees, witness fees and copying costs, are
recoverable by the winning party. The largest part of litigation expenditure, lawyers' fees
are not recoverable except in special circumstances. In patent cases there is a provision
in the patents statute, 35 USC §285, which provides for an award of attorneys' fees to the
prevailing party in patent litigation “in exceptional circumstances”; this is rarely used.
One of the most expensive parts of the US litigation process is discovery; this has been
made much worse by the advent of electronic documents and there have been attempts to
discourage excessive e-discovery requests by putting the cost on the requestor. In most
cases the US cost compensation approach is seriously inadequate.
3.11 Sanctions for breach
The courts’ lack of practice to hold litigants in contempt has rendered enforcement of
court orders a problematic area in China civil system. It is nonetheless promising to see
that certain regulations started to impose specific monetary sanctions for breach of court
orders.
3.12 Publication of court judgments
Article 156 of the new Civil Procedure Law mandates that the public shall have access to
judgments issued by the people’s courts except where national secrets, trade secrets or
matters of privacy are involved. The SPC has maintained the official portal for selective
intellectual property judgments of all levels at http://ipr.court.gov.cn/ since 2006. In
addition, the SPC recently enacted a regulation requiring all of its judgments to be
published online.
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Patent Protection and Enforcement in the PRC
CONCLUSION
The PRC Patent Law has evolved remarkably in the past 30 years, particularly in the last
decade.
With the astronomical market growth and the national strategic plan to turn China into a
knowledge-based economy, there is a huge demand to make the IP system work and for
it to work better.
In addition to already being compliant with the TRIPS Agreement, China law has learned
and absorbed from the EU and US patent law jurisprudence.
There is still work to be done and hope for improvement, and the authority is conscious
of the problems. As the majority of the patent system users are now domestic rather than
foreign, the pressure for change comes from both within as well as outside China. In
many aspects leading Chinese companies are indeed restricted in the same way by the
system's inadequacies, and share the same vested interests in seeing the system
improved.
On most aspects where it could be argued that Chinese law still lags behind other (but
not all) legal systems, measures have been taken (amendments to the law, increase of
resources) to improve the efficiency of IP protection and enforcement. To some extent,
these still need to be translated into practice.
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Patent Protection and Enforcement in the PRC
An Assessment of Developments
over the Last Decade
by The Economist Intelligence Unit
FOREWORD
This report has been commissioned by Huawei and independently researched by The
Economist Intelligence Unit. Its main objective is to explore the developments in the
intellectual property (IP) patent protection and enforcement landscape in China over the
past decade.
The views expressed here are based on the official data published by sources such as the
State Intellectual Property Office (SIPO) and the World Intellectual Property
Organisation (WIPO), as well as the IP consultancy specialist Rouse's CIELA database
covering civil IP litigation, although it is important to note that the latter is based only on
published IP judgments from 94 courts in the 35 leading Chinese cities. The data have
been validated through structured interviews with legal practitioners experienced in
patent registrations and/or enforcement in China, of which a total of 12 were interviewed
in September-October 2013. The aim of these conversations was to validate the trends in
the official data with interviewees' experiences, and to provide a more in-depth
understanding of the underlying situation.
The views expressed in this report do not necessarily reflect those of the sponsor.
Written by The Economist Intelligence Unit
24
Patent Protection and Enforcement in the PRC
1. Introduction
"Competition in the future will be competition in intellectual property" - Wen Jiabao,
2004.
In Tianjin, a city in north-east China, every primary school has an IP tutor and children
are taught that "stealing someone’s intellectual property is like stealing their mind". In a
country where copying historically showed respect and admiration, the move by
provincial authorities to educate those in their formative years in IP theory shows the
country’s significant shift in attitude to the rights of innovators.
From its adoption of patent law 29 years ago, China has sought to improve prosecution
and enforcement by identifying flaws, inviting expert opinion and revising the letter and
apparatus of the law. The targets and guiding principles in the State Council’s 2011
National Patent Development Strategy and the former president Hu Jintao’s comments
that he wants to see "made in China" become "created in China" make it clear that IP is
of increasing importance to the nation’s leaders.
This report found that although many areas still require improvement in the prosecution
and enforcement structure, on the whole, China’s patent laws and prosecution and
enforcement infrastructure have improved over the past decade.
2. Patent prosecution
The increase in patent applications in China has drawn attention in recent years. In 2011
a total of 1,111,879 applications were received, a fivefold increase on 2003, and a figure
that vaulted China past the US to become the largest patent office in the world, according
to data from SIPO. The number of patents granted rose at a similar pace, from 106,060
to 580,223, over the same period.
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Patent Protection and Enforcement in the PRC
Figure 1. Number of patent applications received domestically and abroad
Total
Chinese
Non-Chinese
1,200,000
1,000,000
800,000
600,000
400,000
200,000
2003
2004
2005
2006
2007
2008
2009
2010
2011
Note. Invention refers to any new technical solution relating to a product, a process or an improvement
thereof. Utility model refers to any new technical solution relating to the shape or the structure, or their
combination, of a product, which is fit for practical use.
Sources: SIPO Annual Report; calculations by The Economist Intelligence Unit.
Government initiatives have played a part in spurring applications from domestic firms.
For a company to qualify as a "High/New-Tech Enterprise", which allows a reduction in
corporate income tax from 25% to 15%, it has to show that it is sufficiently innovative,
and whether the enterprise holds an invention patent—a patent for any new technical
solution relating to a product, a process or an improvement, which provides 20-year
protection from the date of filing; they are subject to substantive examination unlike
patents for utility models. Application costs for Patent Co-operation Treaty (PCT)
patents, which allow an applicant to protect his invention in contracting states, are
subsidised by the central government if certain conditions are met. In state-owned
companies, employees are rewarded with bonuses or a promotion if they apply for
patents, according to Alex Zhang, a partner at King & Wood Mallesons.
Patent applications from foreign companies have also increased, more than doubling
between 2003 and 2011, a higher pace of growth than in the US, which saw overseas
applicants increase by 67% over the same period, according to figures from WIPO.
Interest in China is buoyed by the country’s relative immunity to the global downturn
and confidence in its long-term economic clout. "In the past, we would be asked to file
internationally, for example, in the US, EU and Japan. Now we’re more often than not
being asked to do so in China in preference to countries such as Japan, which perhaps
historically would have been of more interest to our clients," said David Clark, a partner
at Appleyard Lees, of his British clients.
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Patent Protection and Enforcement in the PRC
2.1 Trends in invention patents
Trends in applications for invention patents, rights that are only granted after
substantive examination, are different from those for utility models—a patent for any
new technical solution relating to the shape or the structure, or their combination, of a
product, which is fit for practical use; these provide ten-year protection from the date of
filing, and are not subject to substantive examination nor require the same extensive
investigation. In fact, patent applications are not spread equally across sectors.
For example, applications for invention patents in the "electricity" category, which
includes telecommunication and IT innovations, have outnumbered those in other
sectors between 2003 and 2011. The number of applications increased by 390% over this
period to 93,992, according to SIPO, making the electricity sector the fourth fastest
growing category out of the eight set out in the graph below.
Figure 2. Patent applications for inventions and utility models by industry
category
250,000
Total
Human necessities
Performing operation & transporting
Chemistry & metallurgy
Textiles & paper
Fixed constructions
Mechanical engineering
Physics
1,200,000
Electricity
1,000,000
200,000
800,000
150,000
600,000
100,000
400,000
50,000
200,000
-
2003
2004
2005
2006
2007
2008
2009
2010
2011
Note. The industry categorisation is based on that of the International Patent Classification (IPC).
Source: SIPO Annual Report.
Some of the leading PCT applicants in this industry are telecoms companies. ZTE
Corporation led the PCT patent applicant charts in 2011 with 2,826 applications, almost
1,000 more than its closest competitor, Panasonic Corporation, while Huawei followed
in third position with 1,831, according to WIPO statistics. Many of those interviewed for
this report consider these applications testament to the sector’s innovative capacity and a
signal to competitors of intent to take to the international stage.
Meanwhile, invention patent applications in the chemistry & metallurgy category, which
covers pharmaceutical innovations, has increased at a slower pace, by 350% to 75,129
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Patent Protection and Enforcement in the PRC
over the nine-year period to 2011, according to SIPO. However, the sector continues to
receive the third-highest number of applications. The slower growth of domestic
pharmaceutical applications is in part down to the complexity of chemical innovation.
The research and development process of a pharmaceutical product requires a significant
amount of financial investment and is a long-term endeavour. China has not
accumulated sufficient experience and time in the sector, given its relatively recent
appearance on the world stage, to move away from manufacturing generics.
There is concern that SIPO is making it increasingly difficult for foreign applicants in this
sector to get their patents approved, by raising unreasonable objections and using other
unfair delaying tactics. Practitioners allege that it is following policy instructions from
the central government to protect indigenous pharmaceutical companies. The lawyers
interviewed as part of this report also raised other examples of bias towards local
companies in protected industries. For example, there is a route, called the Green
Channel, on which certain Chinese patentees are fast-tracked and receive validation
before foreign applicants. Such preferential treatment is not limited to China, however.
Several practitioners confirmed that they had experienced similar cases in other parts of
the world, including in Europe and North America.
In contrast to the chemistry & metallurgy category, the number of invention patent
applications in the areas of performing operation & transporting and mechanical
engineering have grown by 509% to 68,335 and 500% to 39,155 respectively in the nineyear-period, according to SIPO. The fast growth of Chinese applications in these sectors,
which includes automotive innovation, may also be down to the lower barriers to entry in
the industry. Moreover, mechanical innovation tends to be easier to achieve in a short
timeframe in comparison with other categories of innovation.
Although foreign firms were granted double the number of invention patents in 2003 in
comparison with domestic players, this trend reversed in 2009, and in 2011 Chinese
companies were granted almost double the number of patents, at 112,347, than their
foreign counterparts, with 59,766, according to SIPO.
2.2 Trends in utility models
Chinese companies are often portrayed in the media as being mainly interested in filing
utility models, as such patents do not require substantive examination. The data,
however, do not support this depiction. In 2003 the ratio of utility model to invention
patent applications filed by Chinese companies was 1.9:1. In 2011 it fell to 0.7:1,
according to SIPO. Although domestic companies are still pursuing utility model
applications, with numbers increasing by 439% to 405,086 in the period from 2003 to
2011, the pace of growth of invention patent applications was higher still, at 632%.
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Patent Protection and Enforcement in the PRC
Many in the industry are critical of China’s utility model system, originally adopted from
the German model and still in use in many countries. Those dismissive of the model
argue that the lack of substantive examination allows patents of little value to be granted,
affording protection to "junk" patents. It is argued that the low bar encourages and leads
to the flooding of the market with low-value patents, which hampers efforts to prosecute
genuinely novel ideas as prior art searches take longer.
Furthermore, the system is easily hijacked by those who prosecute patents maliciously to
extort money from innovators who have not yet protected their rights. "The problem for
third parties is when they find a registered utility model for something that they were
selling ten years ago. Even though they have evidence that the utility model is invalid, it
would take time and money to go through the invalidity procedure, which ultimately
means that utility models can be disruptive to companies," said Laura Ramsay, a
partner at Dehns.
Although the system is vulnerable to exploitation and provides fewer quality safeguards
than the invention patent process, focusing on the existence of "junk" patents obscures
the strengths of the system. Indeed, in order for a decision to be made on the validity of a
patent, an investigation into international prior art has to be conducted, experts may
have to be consulted and litigation can often take a number of years. Without expending
resources and time analysing the content of China’s patents, it is difficult to conclude, as
many have done, that most utility models have little or no merit.
In addition, many commentators believe that the volume of patents granted must
indicate inherently a lack of merit, but quantity does not necessarily denote a lack of
quality. "Because we cannot judge in advance what inventions will make money for us,
we file patents to cover everything. Even multinationals engage in this strategy,
because they recognise their inability to predict the future," said Benjamin Bai, a
partner at Allen & Overy.
Moreover, the utility model system is useful for small and medium-sized enterprises,
which use it to get on the innovation ladder. It is cheaper and quicker than the invention
patent process, which can take up to three years. In contrast, a utility model can be
granted in six months. "From a developmental economics perspective, it makes sense
for a country that is trying to build up its industrial base to allow the Dysons of the
future to get onto the invention ladder. A mere scintilla of improvement will suffice to
sustain a utility model; with smaller inventions having valid protection in countries
such as China," said Elliot Papageorgiou, a partner at Rouse. Furthermore, the low bar to
utility models is a way to encourage familiarity with the concept and practice of patents.
Given that the utility model system is often criticised and that the majority of utility
model holders are local firms, it might be expected that foreign firms would not make
use of the system. However, overseas companies are increasingly using the system. In the
period from 2003 to 2011, there was a 128% increase in foreign firm application numbers
for invention patents, but a 227% rise in utility model claims, according to SIPO.
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Patent Protection and Enforcement in the PRC
2.3 Patentable subject matter
Whether a patent system covers a wide enough range of subject matter is often a point of
discussion in patent offices around the world. China’s patent scope is narrow but
standard in a global context; however, practitioners were divided on whether it should be
widened.
The limited scope of patentable subject matter is in part due to the relative youth of
SIPO. Legislating on what constitutes patentable subject matter is difficult and it takes
time to build up guidelines to help examiners understand the boundaries. However,
there is a view that a relatively narrow scope is beneficial, in that it avoids issues with
business method patents, to cite one example.
One area of contention is software. Currently, algorithms are not patentable per se in
China but can be protected if combined as one invention with the equipment on which it
runs to achieve further technical effects, which is how software is commonly patented in
Europe. Many lawyers do not think software should be patentable as they are concerned
that this will cause delays and consider it an unnecessary addition to an already
functioning system.
Equally, business methods are often not patentable either, which makes it more difficult
for some sectors to protect their revenue. Moreover, it is more difficult to patent certain
forms of chemical processes in China, which can have an impact on the pharmaceutical
industry.
2.4 Patent examiners
As applications have grown, SIPO has increased the number of examiners. From 2004 to
2009, the number of patent officers increased by over 200% to 4,464, according to data
from Chinalawinfo Co.
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Patent Protection and Enforcement in the PRC
Figure 3. Number of patent examiners in SIPO
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
2004
2005
2006
2007
2008
2009
Note. 2008 figure is a forecast for the number that were planned to be hired. However, because the
recruitment plan is set via a strict political process, it is not easily changed, so the data should be very close
to the actual in that year.
Source: Li Hongjiang, "Enhance SIPO by improving review and examination capacity", 2009, Chinalawinfo
Co.
Although this rate of expansion is substantial, statistics show that pendency times have
not improved significantly in the past five years. A study from the Intellectual Patent
Office on patent backlogs and mutual recognition from 2010 outlines how pendency
times in China declined substantially between 2001 and 2005, falling from 53 months to
under 23, yet increased again to 26 months in 2007. A SIPO presentation on Baidu, a
Chinese web services company, similarly shows how, in 2005, the time between the filing
of an invention patent application and action being taken by SIPO was 24 days. By 2009
it had increased to 26 days. In comparison to pendency rates in Europe, Japan and the
US in 2007, however, SIPO fares quite well, as is highlighted in the study from the UK
Intellectual Patent Office. In contrast, the case-closing period for utility models over the
same period fell to six days, from 11 days. Unfortunately, existing historical data on the
time it takes to process a patent from the application stage to the grant stage are limited
and inconclusive on whether recent trends are positive or negative. Practitioners are also
divided on whether times have improved.
Figure 4. Pendency of patent examination by type (in months)
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Patent Protection and Enforcement in the PRC
Note. For the utility model, this refers to the case-closing period. Pendency is defined as the time lapse
between the filing of a patent application and action being taken by the patent office. (The review period is
calculated on a monthly basis. In terms of the review period for invention-related patents, it is defined as
the length of time from the date on which the substantive review is initiated to the date on which the review
is closed. A preliminary review system is adopted for utility model and design-related patents, where the
review period runs from the application date and lasts for a relatively shorter period.)
Source: SIPO Annual Report.
(a) Examiner expertise
Given the growth of patent offices in China, examiners vary in expertise. New examiners
have difficulties making judgment calls, which delays prosecution. Furthermore,
although some examiners use the phone to clarify matters, which is often the most
efficient way to clear up simple issues, others will issue a complete office action, which
adds to the cost and causes delays. Furthermore, some examiners are not very good at
articulating what they require or suggesting what patent wording they are prepared to let
through.
However, we found that there is a clear perception of improvement in the overall
expertise and professionalism of examiners. "Five to ten years ago there was less
training, and language skills were limited. Now they get regular training, all graduate
from a good university and have good language skills. Some of the examiners are also
trained in foreign countries such as in the US, so the situation is pretty good," said
Fabio Giacopello, a partner at HFG Law Firm.
The European Patent Office (EPO), which has been involved in the training of Chinese
examiners, has also helped to improve the system. As a result, many EPO practitioners
find the Chinese process and examination strategy to be very familiar. For example, a
significant number of the objections and the way the examination reports are structured
are found to be similar to those in the EU.
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Patent Protection and Enforcement in the PRC
There is a sense that examiners are meticulous. "I’ve been working in this field for over
20 years in a range of countries. I’ve encountered patent prosecution in many other
countries, and my general view of Chinese patent examination is that it is one of the
most thorough," said James Cleeve, a partner at Marks & Clerk China. Indeed, Chinese
examiners are reported to be very thorough when seeking out and reviewing supporting
information. A patent claim usually comprises an independent claim and dependent
claims that add various other limitations. In many countries, the patent office will only
examine the independent claim, whereas in China, all other claims are examined.
Moreover, Chinese examiners carry out a search for prior art outside of China, which is
not common practice for many other patent offices. Finally, when they are considering
applications for a patent that has already been granted in a different country, examiners
will look at that nation’s file to investigate the foreign examiner’s process. According to
practitioners, this is not always carried out in other patent offices and serves to make the
examination more comprehensive. Whereas in Europe, patent officers often only look at
abstracts, Chinese examiners go into the actual body of the text, so are citing more
documents.
(b) Number of invalidation actions and re-examination cases
The table below shows that the total number of invalidation actions being brought
against granted patents has remained stable over the years (around 2,200 invalidation
cases) and the total number of actions lodged by patentees with the PRB when their
applications are being rejected (re-examination cases) has grown quite significantly. The
surge in re-examination cases is in line (and even slightly exceeds) the overall surge of
patent applications mentioned earlier in this report.
Figure 5. Number of patent invalidation cases and patent re-examination cases
Total re-examination cases
Total invalidation cases
16000
14000
12000
10000
8000
6000
4000
2000
0
2005
2006
Written by The Economist Intelligence Unit
2007
2008
2009
2010
33
Patent Protection and Enforcement in the PRC
Note. Data for 2005-07 and for invalidation cases in 2008 represent quotes from SIPO officials.
Source: SIPO news, "Improvement of SIPO PRB in comprehensive capacities", published January 15th
2013.
Some interviewees believe that Chinese examiners’ attention to detail raises the bar of a
patent granted in China to a global standard. "If a patent is granted in China then I
would say that the claims that are granted there would have a good chance for those
claims as they stand of going straight to grant in Europe and also the US, but that is
not so the other way around. Patents in the US—it is very rare that I will see a claim
that is drafted in the US be allowed to stand in China," said Mr Cleeve.
Endorsing this statement at the international level is the EPO, which has proposed the
mutual recognition of work done by the patent offices of China, Japan, the US and
Europe. Future plans include the opening of a sixth patent examination co-operation
centre in Chengdu, the capital of Szechuan province. The centre, announced in October
this year, is slated to open at the end of 2018 and will employ 2,000 examiners who will
examine 110,000 invention applications annually. It is expected that additions such as
this will help to improve examination times.
2.5 Summary
In summary, we have found a near-unanimous sense that the Chinese prosecution
system has improved over the past decade and is now of a global standard.
Practitioners see the change of the prior art rules in 2009 as a watershed moment.
Before the amendment, only use of an invention within China counted as prior art. After
2009, prior use anywhere in the world became admissible, which brought the system
into line with international standards.
Another seminal advance was SIPO’s 2012 entry into the Patent Prosecution Highway
system, which is a collaboration between major global patent offices. It is considered by
some lawyers to be a turning point that will ultimately make it easier and cheaper for
Chinese companies to file patents in countries that have subscribed.
3. Patent enforcement
3.1 Trends in the use of the administrative route
There are three routes a patentee can take to enforce his rights: one is the administrative
route, which is overseen by SIPO; the second is by bringing an action in the civil courts;
and the third is by bringing a criminal action to the Public Security Bureau, but this last
route is rarely used. The number of cases handled via the administrative route by SIPO
has increased in recent years. Last year, the office administered 9,022 patent cases, twice
the number in 2011, according to data from Intellectual Property Protection In China, a
government body.
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Patent Protection and Enforcement in the PRC
The increasing popularity of this channel is partly due to its being less expensive than
civil litigation, which is increasing in cost. Many practitioners also believe that the
process has become more structured and accessible. "Seven years ago, there were not
enough officials working in these offices. Five years ago, we were not carrying out any
enforcement through the administrative route. Now there is a structure in place. So
there has certainly been an improvement in the last seven years," said Mr Giacopello
from HFG.
The system is viewed as effective in certain situations. One practitioner said that 70-80%
of his cases ended with the infringer agreeing to stop the infringement, and that SIPO
was more often than not able to bring the violating party to the mediation process.
However, as some administrative authorities do not have the capacity to compel a party
to stop further infringement following a decision, these decisions are sometimes
disregarded. In addition, administrative route cases have to be brought in the
jurisdiction of the infringer, which allows the patentee less flexibility in determining the
forum.
The administrative route is used more by certain sectors than others. The dominance of
manufacturing and machinery disputes is due to the type of patents granted in the
sector, which are often simple mechanical ones. For such patents, which often describe
physical parts, an adjudicator can simply look at an infringing product and determine
infringement. The administrative route is rarely used for complex patents because the
officers lack the necessary technical competence to assess validity and infringement in
such cases.
Written by The Economist Intelligence Unit
35
Patent Protection and Enforcement in the PRC
Figure 6. Number of invention patent administrative appeals by industry
(Patent type and industry)
Total
Pharmaceuticals & veterinary
Automotive
Manufacturing & machinery
IT & services
Others
Chemicals & biotechnology
Apparel & textiles
350
300
250
200
150
100
50
0
2006
2007
2008
2009
2010
2011
2012
Sources: Rouse, CIELA database; The Economist Intelligence Unit calculations.
Figure 7. Number of utility model patent administrative appeals by industry
(Patent type and industry)
Total
IT & services
Automotive
Others
250
Manufacturing & machinery
Apparel & textiles
Pharmaceuticals & veterinary
200
150
100
50
0
2006
2007
2008
2009
2010
2011
2012
Sources: Rouse, CIELA database; The Economist Intelligence Unit calculations.
Written by The Economist Intelligence Unit
36
Patent Protection and Enforcement in the PRC
3.2 Trends in civil litigation
The total number of patent court cases, including infringement disputes, fake patents
and patent imitations, among others, has decreased. The number of filed cases relating
to invention and utility model patents declined from 3,124 in 2003 to 1,726 in 2007, only
to increase to 3,017 in 2011, according to SIPO. Data from CIELA shows case judgments
fluctuating within a range of 269 to 312 between 2006 and 2011.
As with cases handled via the administrative route, there has been a slight increase in the
number of invention patent infringement disputes relative to utility models. In 2006,
66% of patent civil infringement disputes were over utility models, whereas in 2011 this
figure had fallen to 56%, according to CIELA. In addition, in 2006-12, 89% of patent
infringement disputes were between two mainland parties.
Similarly to administrative route disputes, most civil cases are connected to
manufacturing and machinery patents. According to data from CIELA, 67% of civil cases
are connected to patents in this category.
3.3 Judiciary developments
To adequately staff its patent cases, China has been training and appointing new judges.
In addition, more courts are being given the authority to decide patent disputes: at the
end of 2012 the Supreme People’s Court had appointed 83 intermediate people’s courts
to handle patent cases, according to its white paper released in April this year.
(a) Judicial expertise
However, the judiciary is often found to be insufficiently trained in the more complex
types of technologies. In high-tech cases, conflicting technical testimony from each side
can render a judge incapable of making a decision. Judge paralysis in such cases often
leads to delays, posing a threat to the patent enforcement system. Although there are
many court systems where the decisions are made by adjudicators who are not
technically trained, for example in the US, where certain cases are decided by juries,
systems are exceptional when judges are scientists as well as lawyers.
The criteria on which judges are assessed add to their reluctance to make strong
decisions. If a judge has his judgment overturned by a higher court twice in a year, his
promotion prospects may suffer. In order to protect their performance ratings, judges’
decisions err on the conservative side. For example, in some instances, when a judge does
not understand the technical arguments, he will avoid making a ruling to avoid a later
reversal, which again causes delays. The Supreme People’s Court has issued directives to
the lower courts on this issue, but judges are not following directions, said a practitioner.
Written by The Economist Intelligence Unit
37
Patent Protection and Enforcement in the PRC
The high volume of cases is also having an impact on the perceived quality of judgments.
"The issue is that the volume of cases has caused a decrease in confidence in being able
to enforce patents effectively or get good decisions. Indeed, the volume has become so
high that judges are dealing with cases in a perfunctory way," said Mr Papageorgiou of
Rouse.
In contrast, judicial decisions on simple technology appeared to have improved, largely
as a result of training. Of the cases heard between 2006 and 2012, 67% have been in the
manufacturing and machinery sector, which tends to have simpler technology than many
other sectors, according to data from CIELA. "Better quality decisions are one of the
things that has changed a lot in the last decade. The everyday life of patent litigation
leans to the rule of law," said Mr Giacopello.
(b) Uniformity of judgments
Investigation finds that the quality of judgments do not appear to vary across sectors,
although the inherent complexity of certain sectors means it can take longer to get good
decisions on innovation in some areas than others. For example, decisions on simple
mechanical patents are easier to adjudicate on without expert opinion, whereas for
chemical inventions, an expert is always necessary.
Although the judicial system has improved, these advances originate from courts in a
small number of cities. Courts in Beijing, Shanghai and Shenzhen tend to apply the law in
the most uniform, impartial manner, whereas judges in smaller cities further away from
the eastern coast are seen as having less experience and being less professional. "China is
not a whole and unified concept. If you go to Shanghai, then it’s probably more
advanced than Italy, but not compared to Spain or Greece," said Mr Giacopello.
In the smaller provincial courts, local protectionism is also an issue. If a case is brought
in the home province of an infringer, that court may exhibit bias. Judges suggest that
cases be withdrawn without reasonable grounds and delay proceedings by requesting
unnecessary formalities, which work in favour of the local party. Smaller courts are more
likely to decide in favour of the home party, according to practitioners.
However, it must be noted that local bias is not exclusively a Chinese phenomenon.
"Parties will bring cases to their home jurisdiction. It's quite common in other countries
too. One may know the judge and be familiar with the style used; so it’s easier than if
you’re in a foreign country you’re not familiar with," according to Alex Zhang, a partner
at King & Wood Mallesons.
To avoid the impact of local protectionism, all lawyers interviewed advocate the need to
analyse the judgment history of the available courts in order to choose one that has
exhibited the least protectionist bent, which leads to the recommendation of the same
courts. Nonetheless, some feel that levels of local protectionism have fallen over the past
decade.
Written by The Economist Intelligence Unit
38
Patent Protection and Enforcement in the PRC
Meanwhile, foreign companies tend to hold a common misconception that overseas firms
cannot win in a Chinese court. Yet statistics suggest that foreign firms are more likely to
win than not. Of the invention patent civil infringement cases brought by a foreign party
against a mainland firm between 2006 and 2012, 77% were won by the overseas
company, according to data from CIELA. In contrast, if both parties were from the
mainland, the probability of the plaintiff winning fell to 52%. If utility model cases are
included in the calculations, 75% of cases are won by overseas companies in infringement
actions they bring, while 62% were won by the plaintiff in cases with two mainland
parties. "We need to break the myth that China follows its own rules and policies …
normal administration works here," said Paolo Beconcini, managing partner at Carroll,
Burdick & McDonough LLP.
Figure 8. Finding of infringements involving a foreign party
(Patent type and party)
Source: Rouse, CIELA database.
(c) Duration of cases
There appears to be no concrete evidence that the duration of proceedings had changed.
Some practitioners felt that there had been no change, while others said they have seen
an improvement.
Written by The Economist Intelligence Unit
39
Patent Protection and Enforcement in the PRC
3.4 Damages
A significant issue with the court system remains the level of damages, which are still
very low and not comparable with those awarded in other jurisdictions. No increase in
levels of compensation can be discerned over the period from 2006 to 2012, according to
data from CIELA. Judges awarded larger compensation awards for invention patent
cases than for utility models. The mean compensation for invention patents was RMB
479,257 (US$78,615), with a standard deviation of RMB 3,079,981, while the mean for
utility models was RMB 104,774 (with a standard deviation RMB 138,775), according to
data from CIELA.
For invention patent cases, the largest proportion of the compensation was awarded
under loss of profit, rather than pursuant to statutory damages, licence base or illegal
income. The data from CIELA show that for invention patent cases, where the plaintiff is
foreign, levels of compensation are lower than when the patentee is a mainland company.
The mean compensation received by a foreign party in 2006-12 was RMB 236,961 (with a
standard deviation of RMB 538,938), while a local plaintiff was awarded a mean of RMB
395,542 (with a standard deviation of RMB 1,995,274).
There is a perception that judges award lower damages to foreign plaintiffs, which these
figures may support. However, given the relatively small number of cases reviewed, mean
figures can easily be skewed by one large award. Nevertheless, steps are being taken to
raise the thresholds.
(a) Civil procedure rules
Although rules determining compensation in China and Europe are very similar, awards
remain low because of evidential difficulties in ascertaining loss or profit under the
different categories of award. Statutory damages, which are awarded when it is difficult
to determine the level of loss, accounted for 94% of awards made between 2006 and
2012, according to data from CIELA—an indication that in the majority of cases, the
judge does not have enough evidence to make an independent assessment of actual loss.
A patentee can also claim under illegal income, but without a discovery or disclosure
process, it is difficult to compel an infringer to provide evidence on profits. Notably, only
two of the 582 cases reviewed between 2006 and 2012, 0.3%, involved awards pursuant
to disclosed illegal income, and one of the cases was a Chinese patentee bringing an
infringement action against a foreign company. Higher illegal income damages are often
awarded against foreign companies as they keep better records.
A claim for compensation can also be brought for licensee royalties, but this is only viable
for those patentees who have licensed their products. It is used rarely and only accounted
for 2% of compensation awards made between 2006 and 2012.
Written by The Economist Intelligence Unit
40
Patent Protection and Enforcement in the PRC
Only 3.8% of compensation awards are made under lost profits claims, according to data
from CIELA. Although evidence to support this type of claim is easier to provide, as it is
supplied by the patentee, in many cases the patentee has not sold products so there is no
claimable loss.
(b) Discovery
It is difficult to collect evidence of losses and profits, in part because there is no formal
discovery process. The absence of such a judicial tool in the country’s civil procedure laws
makes it difficult to increase the level of damages and enforce patent regulations. "Even if
you have good patent law, if you have bad civil procedure or bad administrative
procedure for patent infringement determination or administrative organs, it may not
be enough to have good patent law," said Mr Beconcini.
Another concern is the need to notarise and legalise evidence in order for it to be
admissible, which is time consuming and expensive. "It takes two months' worth of work
and a lot of money just for even a simple power of attorney," said Mr Giacopello. This
practice stems from judges’ lack of trust in the authenticity of documents brought to
court, leading them to request more evidence in support of contentious facts. High levels
of distrust originate from the unenforced and light sanctions for perjury. By comparison,
if a lawyer is discovered filing false evidence in Europe, he may lose his practice licence or
face criminal sanction if discovered.
To deal with the issue of endemically low damages and evidential difficulties, new
measures are being introduced. Punitive damages were introduced in the draft
amendments to the Patent Law circulated for comments in 2013 as another category
under which judges can award damages. Although the amount is still capped, it should
increase the exposure of the infringer and have a deterrent effect.
3.5 Summary
Despite the current shortcomings with China’s civil procedure laws, there has been an
improvement in the system since its inception. Judges are using the relatively new civil
procedure tools to enforce patent law. According to data from CIELA, 99% of requests for
injunctions are granted when infringement is found.
Many practitioners also spoke highly of the Supreme People’s Court’s endeavours to
improve civil procedure laws, such as the reforms that were introduced in August 2012
that reinforced pre-litigation injunctions among other things.
There is a common view that the Supreme People’s Court has done a commendable job
identifying issues with the system and implementing measures to address them. Most
recently, the Supreme People’s Court policy book, published in September this year,
requires the courts in each province, specifically the IP panels, to publish some of their
judgments. "This will make the process more transparent and stronger", said
Christopher Shaowei, a partner at NTD Intellectual Property Attorneys.
Written by The Economist Intelligence Unit
41
Patent Protection and Enforcement in the PRC
CONCLUSION
In conclusion, China's IP patent protection and enforcement system has substantial room
for improvement, and yet it has come a long way in just a decade.
With regards to improvements to be made, the infrastructure that facilitates the
enforcement of patents lags behind countries such as Germany, where patent protection
is considered world class. Insufficient damages for patentees suffering infringement, a
lack of judicial expertise in high-tech cases and inconsistent application of the law across
different courts undermine the protection afforded to rights holders. These concerns
relate primarily to the legal environment—and have an impact on all types of disputes—
rather than to imperfections in patent law. They will, however, need to be resolved before
China can claim that patent rights are adequately protected.
For the patent prosecution system, the most serious concern is the perception of bias
towards domestic companies applying for patents in protected industries (such as the
pharmaceutical industry). Although it is arguable that protection exists in all countries to
a certain extent, the persistence of discrimination is likely to continue to deter overseas
applicants.
Nevertheless, both patent prosecution and enforcement have improved significantly over
the past decade. SIPO and the SPC have engaged overseas experts, welcomed domestic
feedback and systematically sought to address concerns, which has honed both the
prosecution and the enforcement apparatus. Every practitioner interviewed for this
report believed China’s patent prosecution and protection had improved over the past
decade. Given China’s relatively nascent adoption of patent theory and practice, the
country is likely to continue improving at a fast pace towards global standards.
Written by The Economist Intelligence Unit
42
Patent Protection and Enforcement in the PRC
ANNEX
Table 1: Number of patent applications received domestically and abroad
Table 1: Number of patent applications received domestically and abroad
Inv ention and utility model total
Chinese
Non-Chinese
T otal
2003
1 64.61 1
2004
1 7 7 .364
2005
231 .57 0
2006
282.31 5
2007
333.059
2008
41 8.524
2009
201 0
537 .957
7 00.304
201 1
997 .1 32
49.822
65.594
81 .323
89.541
93.426
96.900
87 .387
1 00.7 09
1 1 4.7 47
214.433
242.958
312.893
37 1.856
426.485
515.424
625.344
801.013
1.111.87 9
Note. Inv ention refers to any new technical solution relating to a product, a process or an improv ement thereof. Utility model refers to any new technical solution relating to the shape or
the structure, or their combination, of a product, which is fit for practical use.
Sources: SIPO Annual Report; calculations by The Economist Intelligence Unit.
Table 2: Patent applications by industry category
Table 2: Patent applications by industry category
Inv ention and utility model total
2003
2004
2005
2006
2007
2008
2009
201 0
201 1
Human necessities
41 .507
47 .1 7 3
57 .692
7 4.7 33
80.438
1 01 .7 91
1 03.822
1 41 .661
1 85.67 5
Performing operation & transporting
35.1 26
41 .558
47 .67 6
63.605
7 1 .1 36
98.21 4
1 1 0.998
1 49.97 1
21 8.086
Chemistry & metallurgy
1 8.939
21 .1 63
29.451
39.7 20
42.51 0
58.543
57 .267
7 7 .7 42
92.943
3.7 22
4.7 95
5.352
6.7 80
7 .353
9.531
1 0.059
1 3.381
1 8.41 5
Fix ed constructions
1 2.31 3
1 4.67 1
1 6.01 5
21 .042
24.1 80
29.828
31 .686
44.87 1
59.27 6
Mechanical engineering
22.908
28.567
32.691
44.359
49.7 7 9
66.445
7 6.489
93.959
1 25.07 7
Phy sics
29.981
38.7 68
45.951
61 .225
64.7 51
7 9.556
83.299
1 05.432
1 41 .502
Electricity
30.627
43.331
52.334
7 2.626
81 .229
97 .830
1 07 .225
1 27 .685
1 67 .87 0
195.123
240.026
287 .162
384.090
421.37 6
541.7 38
580.845
7 54.7 02
1.008.844
Tex tiles & paper
T otal
Note. The industry categorisation is based on that of the International Patent Classification (IPC).
Source: SIPO Annual Report.
Written by The Economist Intelligence Unit
43
Patent Protection and Enforcement in the PRC
Table 3: Number of patent examiners in SIPO
Table 3: Number of patent examiners in SIPO
2004
2005
2006
2007
2008
2009
1 .381
1 .7 47
2.546
3.533
3.889
4.464
Note. 2008 figure is a forecast for the number that were planned to be hired. Howev er, because the recruitment plan is set v ia a strict political process, it is not easily changed, so the data
should be v ery close to the actual in that y ear.
Source: Li Hongjiang, "Enhance SIPO by improv ing rev iew and ex amination capacity ", 2009, Chinalawinfo Co.
Table 4: Pendency of patent examination by type
Table 4: Pendency of patent examination by type
(in months)
2005
2006
2007
2008
2009
Inv ention
24
22
26
26
26
Utility model
11
9
7
6
6
Note. For the utility model, this refers to the case-closing period. Pendency is defined as the time lapse between the filing of a patent application and action being taken by the patent office.
(The rev iew period is calculated on a monthly basis. In terms of the rev iew period for inv ention-related patents, it is defined as the length of time from the date on which the substantiv e
rev iew is initiated to the date on which the rev iew is closed. A preliminary rev iew sy stem is adopted for utility model and design-related patents, where the rev iew period runs from the
application date and lasts for a relativ ely shorter period.)
Source: SIPO Annual Report.
Written by The Economist Intelligence Unit
44
Patent Protection and Enforcement in the PRC
Table 5: Number of patent invalidation cases and patent re-examination cases
Table 5: Number of patent invalidation and re-examination cases
2005
2006
2007
Total re-examination cases
3.000
3.000
3.000
4.364
2008
9.195
2009
14.780
2010
2011
Total of invalidation cases
Note. Figures in italics represent quotes from SIPO
officials.
2.200
2.200
2.200
2.200
2.257
2.411
n/a
2009
201 0
201 1
201 2
Total
15.695
Source: SIPO news, "Improvement of SIPO PRB in comprehensive capacities", published January 15th 2013.
Table 6: Number of invention patent administrative appeals by industry
Table 6: Number of invention patent administrative appeals by industry
Patent ty pe and industry
Inv ention
Manufacturing & machinery
2006
2007
2008
41
37
62
48
288
236
253
965
17
15
32
27
1 38
112
1 20
461
Chemicals & biotechnology
2
5
5
6
47
28
30
1 23
Pharmaceuticals & v eterinary
6
7
8
10
16
37
37
1 21
IT & serv ices
2
2
4
2
48
24
37
119
7
15
17
42
5
4
3
1
7
7
28
1
2
8
10
4
25
4
13
2
Apparel & tex tiles
Automotiv e
3
Food & bev erage
Healthcare
2
Others
7
Publishing & printing
1
1
Sports & recreation
Entertainment
1
9
1
17
1
1
1
1
4
2
1
1
Source: Rouse, CIELA database .
Written by The Economist Intelligence Unit
21
45
2
Patent Protection and Enforcement in the PRC
Table 7: Number of utility model patent administrative appeals by industry
Table 7: Number of utility model patent administrative appeals by industry
Patent ty pe and industry
Utility model
Manufacturing & machinery
IT & serv ices
2006
2007
2008
2009
201 0
201 1
201 2
Total
68
58
66
73
232
1 46
1 84
827
45
47
55
58
1 65
1 01
1 24
595
3
6
4
4
29
13
25
84
1
2
14
17
16
51
2
2
4
5
6
6
30
4
3
7
14
2
2
4
1
2
2
Apparel & tex tiles
1
Automotiv e
5
Pharmaceuticals & v eterinary
Healthcare
2
Food & bev erage
4
Others
6
Sports & recreation
1
Publishing & printing
Entertainment
1
1
1
1
1
109
95
128
121
9
2
1
1
1
1
2
2
2
520
382
Source: Rouse, CIELA database .
Written by The Economist Intelligence Unit
14
10
3
1
Chemicals & biotechnology
T otal
4
46
6
2
6
4
4
437
1.7 92
Patent Protection and Enforcement in the PRC
Table 8: Finding of infringements involving a foreign party
Table 8: Finding of infringements involving a foreign party
Patent ty pe and party
2006
2007
2008
2009
201 0
201 1
201 2
Total
82%
67 %
97 %
83%
68%
67 %
57 %
77%
Win
23
20
28
15
17
10
4
117
Lose
5
10
1
3
8
5
3
35
Inv ention
Foreign v mainland
Mainland v mainland
46%
55%
7 1%
63%
54%
31 %
7 1%
52%
Win
33
46
63
53
43
38
5
281
Lose
39
37
26
31
37
83
2
255
50%
1 00%
50%
50%
0%
50%
Win
1
1
1
2
1
Lose
1
1
2
1
Utility model
Foreign v mainland
Mainland v mainland
50% -
6
1
6
7 0%
69%
65%
69%
61 %
67 %
64%
67 %
Win
1 42
1 34
110
1 03
114
83
9
695
Lose
60
60
58
47
73
40
5
343
Source: Rouse, CIELA database .
Written by The Economist Intelligence Unit
47
Patent Protection and Enforcement in the PRC
Credits and Contact Details
The first chapter of this report (Legal Landscape in the PRC) has been authored by Bird & Bird
LLP: Christine Yiu (Partner) and Yijun Ge (Associate), with the assistance of Hilary Pearson (Of
Counsel) and Nick Pearson (Associate) for comparative law aspects.
The second chapter of this report (An Assessment of Developments over the Last Decade) has
been authored by The Economist Intelligence Unit: Engen Tham (author and researcher), and
edited by Harald Langer (Senior Analyst) and Maya Imberg (Senior Analyst).
The overall report has been coordinated by Bird & Bird LLP: Paul Hermant (Partner) and Marie
Pètre (Senior Associate).
Contact details for Bird & Bird LLP:
[email protected]
[email protected]
Contact details for The Economist Intelligence Unit:
For enquiries regarding the report: [email protected]; [email protected]
For general enquiries: [email protected]
48
Patent Protection and Enforcement in the PRC
Disclaimer
(a)
Bird & Bird is an international legal practice comprising Bird & Bird LLP and its affiliated
and associated businesses. Bird & Bird LLP is a limited liability partnership, registered in
England and Wales with registered number OC340318 and is authorised and regulated by
the Solicitors Regulation Authority. Its registered office and principal place of business is at
15 Fetter Lane, London EC4A 1JP. The word "partner" is used to refer to a member of Bird
& Bird LLP or an employee or consultant, or to a partner, member, director, employee or
consultant in any of its affiliated or associated businesses, who is a lawyer with equivalent
standing and qualifications. A list of members of Bird & Bird LLP and of any non-members
who are designated as partners, and of their respective professional qualifications, is open
to inspection at the above address.
(b)
References in this document to "Bird & Bird", the "firm", "we" or "our" mean Bird & Bird
LLP and the other affiliated and associated businesses authorised to carry the name “Bird &
Bird” or one or more of Bird & Bird LLP and those affiliated or associated businesses as the
context requires.
(c)
The information given in this document concerning technical legal or professional subject
matter is for guidance only and does not constitute legal or professional advice. Always
consult a suitably qualified lawyer on any specific legal problem or matter. Bird & Bird LLP
assumes no responsibility for such information contained in this document and disclaims
all liability in respect of such information.
49
Patent Protection and Enforcement in the PRC
50
Patent Protection and Enforcement in the PRC
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