Whither The China Patent Filing

The other day I did a post entitled, "China IP Protection Rising, Just As Predicted," touting China's increasing willingness to enforce intellectual property rights (IPR).  I concluded that post with the following advice:

This means foreign companies must examine their intellectual property options in China and this means in most cases it will make sense for these companies to register their trademarks, patents and copyrights in China.  Registering your IP in China (or anywhere else for that matter) does not provide iron-clad protection, but a failure to register does all but assure you of no protection at all.

A reader calling himself/herself, "Made In China," left a very astute comment, noting how China's improving IP is a "slow motion" story and rightfully asking if its patent protection "story" has moved fast enough to warrant filing for patent protection:

The fact that IP protection in China is improving might also fall into what China Rises called "slow motion" stories -- monumental in importance but unfolding so slowly that people hardly notice them.

You were one of the first that raised this point as I remember-- to protect your IPRs, whether in China or not, you should go and register them soonest possible.

It's true as a general principle, but lately I'm wondering what will happen after advising clients that they should register their IPRs, say if 1) the patent registration is rejected by China's authority and 2) clients claim that they don't register those "core technologies or formula" because these core technologies will be "stolen" after registration.

I've come across both scenarios and the latter one is so common among Chinese clients that I almost guessed if this is a normal practice- these people are successful private-enterprise entrepreneurs and generally very sharp in terms of catching or spotting the issues. My argument was the details of such core tech are not supposed to be made known to public in the process of the registration and after that. But apparently the clients don't buy it and claimed that's all "in theory". So I was wondering whether this is just an excuse for non-registration or it is typical Chinese mentality, or it could be that in realty it happened that registration doesn't lead to protection but the other way around.

As for the first question, the reason for the patents being rejected according to the clients, was they forgot to file the application for "material examination" (mechanism of registration is first formal examination followed by the substantive examination). It sounds reasonable, but my questions were why they don't have someone monitor the registration process and what are the measures to mitigate any loss incurred due to the patents being rejected.
Again, they replied to say there won't be any loss because the patent application was for some unimportant formula- now we go back to the first point.

Just out of curiosity, have you come across any of these?

I am less enthusiastic about filing for patent protection in China than I am about trademarks.  The decision on registering your trademark in China is easy.  If you have something valuable that can be protected by trademark, register your trademark.  It is that simple.  China's recent record on enforcing trademarks is already good and getter better and the cost of enforcing trademarks is generally relatively low.

Patents are a whole 'nother story. 

The cost of filing for a patent in China is usually more than for a trademark and the risk of rejection is also quite a bit higher and far less predictable.  China's courts are not particularly well educated on patent protection, nor are they terribly zealous in this task.  On top of this, I do think that filing a patent does increase the likelihood of someone being able to copy that which you sought to patent and the ease of their doing so.  The cost to enforce a patent in China, once violated, can be quite high. 

All of this means that the decision on whether to seek patent protection in China is anything but simple and it generally must be made on a case by case basis.  If you are Pfizer and you are looking at patenting something as valuable as Viagra, the choice is simple and clearcut.  You do it and you do whatever it takes to enforce it.  But if you are a small company with a product you hope will generate $1 million in profit from Chinese sales, and you know you are not willing to spend large sums protecting your patent should it be violated, you will need to fully analyze the situation before determining how to proceed.