China IP Litigation Exploding and What That Means for Doing Business in China

Register your trademark with China customs

Just came across an interesting post, IP Developments in Beijing, on how “due to the rapid increase in IP cases in the Beijing Number 1 Intermediate Court, particularly IP cases involving patent and trademark validity, the Beijing Intermediate Court will split its Intellectual Property Tribunal in two” with the number one IP Tribunal hearing mostly trademark and unfair competition cases and the number two IP tribunal hearing mostly patent and copyright cases. The post then notes that the Beijing court (which hears about 10% of all China IP cases) has seen its case load increase from “4,748 cases in 2008 to 11,305 in 2012, an increase of nearly 150%,” with copyright cases representing about half the total.

This profusion of China IP litigation is important for foreign companies doing business in China for the following reasons:

1. Rational human beings do not spend money on something that is not going to bring them any benefit.

2. Bringing a lawsuit in China always costs money (China court filing fees tend to be high), oftentimes a relatively large amount of money.

3. Chinese businesses tend to be made up of rational human beings who understand the value of an RMB.

4. Chinese businesses must believe that they can get the Beijing IP court to give them redress for alleged IP infringements or they would not pursue the lawsuits.

5. In increasing numbers, Chinese businesses believe they can get the Beijing IP court to give them redress for IP infringements or they would not be increasing the number of IP lawsuits they are pursuing.

6. Chinese businesses are almost certainly correct in their belief that suing before the Beijing IP court will give them redress.

7. If Chinese businesses are correct in their belief (and they almost certainly are, see numbers 1-5 above), this means IP enforcement through China’s courts is improving.

Independently of the above, you would have a tough time finding a China lawyer who does not also believe IP enforcement in China is improving, particularly for China trademarks. Similarly, my law firm’s international trademark registration lawyers have been seeing a massive uptick in China trademark registrations over the last six months, all coming from foreign companies that do business in China or buy their products from China.

IP enforcement/IP protection is improving in China for two main reasons. First, both Chinese and foreign companies realizing it makes sense to register your trademarks, copyrights and patents in China so as to be able to protect them in the courts, among other places. Second, China’s courts are increasingly realizing the importance of protecting IP in China, largely because Chinese companies increasingly want them to grant IP protections.

What this all means for those of you doing business in China is that you too should be jumping on the IP registration bandwagon by registering your trademarks, copyrights and patents in China so you can protect them from and in China. This also means that you should take care so as not to infringe on anyone else’s China IP so as to avoid getting sued for doing so.

What are you seeing out there?

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