IP in China? It’s not all bad

In Insights, Uncategorized

7 June, 2010

Recent statistics on the outcomes of reported IP litigations in the most important courts in China are encouraging:

The total number of trademark-related cases in 2009 handled by the Chinese courts was 6,906, up almost 11 per cent from 2008. 2008 was up by 79 per cent in relation to 2007.

Administratively, the numbers are on an equally steep climb. In 2009 there were an impressive 37,002 cases handled by the Chinese Intellectual Property Office (SIPO). This follows a substantial injection of funds whereby the backlog of cases has been reduced from a good 11-13 years to 1-1½ years. There is no question that there is still room for improvement. Still, seen from my point of view it is a dramatic improvement and one that promises well for the future. A backlog of 1-1½ years is better than what we encounter in many countries.

It is important to remember that these statistics relate just to reported cases, so they may not tell the whole picture. In fact, if anything, they may underplay the extent to which foreign parties are successful.

There is, however, one overshadowing problem: enforcement. It has been hard to get favourable decisions enforced. This also means that decisions do not act as a deterrent.

In the past year China has had more than its share of embarrassing – and in some cases fatal – domestic cases, especially when it comes to drugs and additives. We remember the counterfeit diabetes medicine, the blood thinner Heparin to which an unlawful and dangerous chemical was added, and – not the least – the scandal about powdered baby milk where Melamine had been added. These cases originated in China and the victims were also Chinese; in a very unpleasant way they stress the fact that trademark abuse and counterfeit products are not just belts, sunglasses and watches.

There is hardly a question that consumerism in China is on the rise and that this will equally reflect on IP. China is no longer just a provider of cheap labour and cheap goods to consumers in the West; China is a nation of increasingly demanding consumers – and the counterfeit cases to match will follow in the foot paths of the consumers.

So where does this leave us for the moment? Well, the statistics are very persuasive: China has allocated more resources to the IP authorities. One can hope that the sad drug piracy cases will also ensure that enforcement will get equal attention.

Thorbjørn Swanstrøm, Attorney at Law, Awapatent

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