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June 5, 2008 ( PowerHomeBiz
) - Shanghai, China --
China, one of the world’s largest and most promising markets, has seen a 20
percent annual increase in patent application filings over the last fifteen
years. In 2007, the State Intellectual Property Office (SIPO) of China
received 694,153 patent applications, an increase of 21.1 percent over the
previous year. These applications included filings for all three types of
patents granted in China: Invention patents (valid for 20 years from the
date of filing), Utility Models (valid for 10 years), and Design patents
(also valid for 10 years). With regard to invention patents (20 year
patents), China is currently third in the world behind the United States and
Japan. In its latest study, Evalueserve, a global research and analytics
firm, forecasts that if patent filings in China continue to grow at the
current rate, the SIPO will overtake the USPTO (United States Patent and
Trademark Office) by 2012.
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Although China is still struggling with the image of being a safe haven
for intellectual property counterfeiters and thieves, during the last two
decades it has developed its patent system significantly, and incorporated
an online and searchable patent database, a robust appeal mechanism, and a
hierarchy of courts for handling intellectual property disputes. As a
result, more than four million patent applications were filed from early
1985 to December 2007. The first million applications were filed over 15
years, but the last million took only 18 months. These measures also
resulted in a substantial increase in lawsuits related to patent
infringement. For example, in 2005, 2,947 patent-related cases were filed in
Chinese courts, representing an increase of 15.6 percent from 2004. In
contrast, the number of patent-related lawsuits in the United States
decreased from 2,973 in 2004 to 2,812 in 2006. The difference in the number
of legal cases related to all forms of intellectual property (e.g., patents,
trademarks, copyright, and trade secrets) is even more significant: in 2005,
13,424 cases were filed in China, whereas only 10,905 were filed in the
United States.
Patent-related lawsuits involving international companies such as Pfizer,
Honda, Philips, and 3M have increased by 77.5 percent over the past year.
The number of closed cases in which at least one of the parties was a
non-Chinese company reached 268 in 2005. But contrary to popular belief, the
playing field within the intellectual property system in China seems to have
become more level. According to the No. 1 Intermediate People’s Court of
Beijing, foreign parties won 60 percent of these cases. Hence, it is now
more important than ever for international companies to develop their
China-specific patent strategies.
By not doing so, they may become targets
for patent infringement, as Schneider Electric (France) was by The Chint
Group (China). In this case, The Chint Group alleged that Schneider Electric
infringed on one of its 10-year patents. The Wenzhou Intermediate People’s
court ruled in favor of The Chint Group and awarded damages worth CNY 330
million (approximately USD 45 million). Schneider Electric has since
appealed to a higher court, but regardless of the outcome, it would have
accrued considerable expense and trouble that could have been probably
avoided had it invalidated this 10-year patent before The Chint Group filed
its lawsuit
Research conducted by Evalueserve also indicates that 99 percent of all
utility model patents (10-year patents) are filed by domestic Chinese
companies. Since these 10-year patents do not undergo substantive
examination, Chinese companies use them to their advantage, whereas
international companies largely neglect them. In its study, Evalueserve
suggests that even if international companies operating in China do not file
10-year patents, they should at least obtain help from local patent
professionals and regularly review all such granted patents in their domain,
and even work proactively to invalidate some of them. Finally, these
international companies need to realize that simply importing their
intellectual property strategies from their home countries may not be
effective and that new China-specific strategies may be required to deal
with the ground realities in China.
About Evalueserve
Evalueserve provides custom research and analytics services to companies
worldwide including Business Research, Market Research, Data & Financial
Analytics, Investment & Financial Research, Intellectual Property & Legal
Research services, and also an access to a global network of domain experts
through its Circle of Experts,
www.circleofexperts.com The firm currently has over 2,250
professionals located in its research centers in Chile, India, and China. In
addition, it has 50 Client Engagement mangers that are located in most major
business and financial centers globally – from Silicon Valley to Sydney –
and has completed more than 13,000 projects since its inception in December
2000. Its Shanghai Research Center has 140 employees who are working on
projects in Chinese (Mandarin), Korean, Indonesian, Thai and Japanese
languages, and delivering the results in English. For more details visit
www.evalueserve.com .
Disclaimer EVS Contact Sandra Winkler Tel: + 86 21 6440 3360 (ext: 640)
Sandra.winkler@evalueserve.com
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