China sees growing number of IPR cases and higher fines for offenders

The file photo shows an intellectual property court in Shanghai, China. [Photo: Xinhua]

Intellectual property lawyers at a leading Chinese firm have said that the treatment of Intellectual Property Rights (IPR) cases between foreign and local companies in China increasingly mirrors global practices.

The approach taken to deciding IRP disputes tends to vary from country to country. For example, in China, the burden of proof that a breach has taken place is on the plaintiff's side, which is different from the approach taken in countries including the United States.

Mao Jin, a partner at King & Wood Mallesons Law Firm, says China's legal approach to IPR cases has moved much closer to international norms in recent years. "Intellectual property rights protection in China has made great progress in recent years. Chinese courts have distributed the burden of proof based on the better protection of IP rights, instead of only asking for proof from the plaintiff. The judgments in Chinese courts now tend to lower the IP owner's lawsuit costs and bring higher compensation. The regulations and rules have been improved a lot in the IP courts in China, protecting the IP owner's rights."

The number of patent enforcement cases in China has been growing, with data from the State Intellectual Property Office showing that in the first half of 2017 there were 15,400 IPR cases, a 23 percent increase on the previous year. 

Statistics from the Beijing Intellectual Property Court show that when American companies brought IPR claims against Chinese companies last year, their claim was upheld in more than 70 percent of cases, up from 44 percent in 2015.

Finding a way to manage IPR cases with a global reach has been challenging, according to Mao Jin. But he says that the Shenzhen IP court is a good example of a world-leader in the management of difficult cases. "Samsung suing Huawei over the dispute about standard-essential patents was an example. A great amount of such cases are emerging globally concerning disputes among giant communications companies. The courts in the U.S. and Germany are now following the precedents set in Chinese courts."

Fines for the infringement of IPR are also on the rise in China, with sharp increases recorded over the last three years in the penalties issued by the Beijing Intellectual Property Court. "The compensation is doubling up every year, even though the total amount is still lower than the United States. But unlike the U.S., the courts in Germany, Japan, and South Korea have been issuing fines equivalent to what the courts in China have been," Mao Jin says.