China Business Blog (an excellent blog on doing business in China) did a nice post the other day, entitled, “Chinese Pirates Like Chinese Brands Too,” on increasing intellectual property litigation in China between Chinese companies.
The post is based in large part on a McLatchy Newspaper article that describes China as the most litigious country in the world in terms of intellectual property lawsuits. It notes that the number of intellectual property lawsuits in China is up more than 50 percent since 2004 and that there were 16,583 such cases filed in 2005, of which only around 5 percent involved foreign companies. China Business Blog notes the increased litigation is probably due in part to the fact that Chinese patent applications were up 44 percent in 2005.
The post graciously points out that “no article on this issue would be complete without a quote from the guys at China Law Blog/Harris Bricken . . . . and Mr. Johnson’s article provides one: “[Chinese companies] would not go to court if they thought it was an empty exercise, said Steven M. Dickinson, a lawyer for a boutique Seattle law firm, Harris Bricken.”
The China Business Blog post goes on to note that though “intellectual property rights (IPR) abuses remain a real risk when doing business in China, it is clear that the legal environment is improving, and that the courts are increasingly willing to enforce judgments against infringers.”
As we have so often noted on this blog, Chinese enforcement of intellectual property rights will see marked improvement when China has reached the point where enough powerful Chinese companies are demanding real enforcement. We are of the view that point has already been reached with respect to trademarks, but not yet for either patents or copyrights, and certainly not with respect to movies or software. We would love to see a breakout of the 16,000+ cases brought in 2005 between trademark, patent and copyright and we are going to try to find out if such a breakout is possible. We would guess that a surprising number of those cases involve trademarks because it is in that arena where enforcement in China is by far the strongest.