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[justin_yu]

Speaking at a forum on innovation and intellectual property in the southern city of Guangzhou, Locke also praised China's progress in terms of the protection of intellectual property rights (IPR) in the past few years.

"China has taken several steps in the past to protect the IPR of the US and other foreign companies operating in the country," he said.

"But more can and should be done to facilitate foreign investment in China," he said.

Being a China patent attorney, I am very curious about how you look at the situation of IPR protection in China.
Please let me know your feeling. Thanks.

[bleedingpen]

My most candid feelings:

I have heard way too many horror stories.  I routinely counsel clients to stay away from China because it doesn't seem like money is well spent there on IP.  I do understand that things are improving, but my gut feeling says that China isn't there yet in terms of IP protection.

Also, I feel like the China Patent Office applies a different examination standard to US based inventions versus Chinese based inventions.  Seriously, maybe I am just being paranoid and unfair to the Chinese Patent Office, but those are my personal experiences.

On a related note, some of the Chinese Patent Office searches have been fantastic, dead-on, destroying any concept of novelty and non-obviousness of my client's inventions.  That is good and bad at the same time.

Bottom line- if my client wants to collect patent numbers, then go ahead and file in China.  If they want good bang for their buck, stay away from China.

[bsbinla]

We're hopeful you will avoid the problems we've had giving inventors ownership of their inventions.

Second on the list of things to avoid are unpleasant injunctions that could upset a well medicated public.  Not good. 

Make sure you codify an "unpleasantness" exception for enjoining patent infringers right away. 

We do like the added touch of criminal patent infringement penalties you enacted. Discretionary enforcement, of course.  "Spare the rod" as they say.... 

Last suggestion, engrave "Equal Justice Under Law" over the entry to your highest court. 





   

[dablueman]

Being a China patent attorney, I am very curious about how you look at the situation of IPR protection in China.

I look at it as nonexistent. Even when they aren't pure fakes, Knockoff brands run rampant in China. I can buy a cheap pair of "daiads", aka adidas, shoes that look exactly like the classic adidas shoes only with 4 stripes rather than 3 with the name daiads on the tongue of shoe. Then you go to a bar and can buy a "cerono", but you can't buy a corona.

Then there is baidu. For a country that cracks down so hard on what people can see and do on the internet I find it interesting that Baidu became the biggest search engine in China by basically being a clearing house for illegal music downloads. If China really cared about IP then Baidu wouldn't have become the market leading search engine in China.

[standuke]

From what I've seen, I think IP rights have a future in China... for instance, you'd think with all those fake Louis Vuitton bags the Chinese wouldn't have any use for the real ones, but in fact the real ones are quite popular among those who can afford them.  Getting rid of knockoffs will take a while, but really, it isn't the same as in the US...  and remember, Microsoft got pretty good market penetration from illegal copies before they started getting serious about piracy.  I think if you're brand is getting pirated in China you are ahead of the game, and you should be working like mad to get Chinese IP protection.  Like anywhere else, patents and trademarks will likely be only one implement in the technocratic toolbox.

SD

[BenLiu]

Foreign investment blah.  I read SCOTUS, CAFC decisions, Landis & Posner, or Muerer.  No U.S. patent practitioner/scholar/court ever talks about how the U.S. should modify it's patent system to promote foreign investment in U.S.  Everyone talks about "U.S. innovation" and "domestic industry."

So in fairness, I think Chinese patent law should be judged by it's ability to promote Chinese innovation.  This is what impresses me about the 2009 (Third) Amendment to patent law.  The Second Amendment in 2000 was basically a response to WTO, and it follows the TRIPs model of "we put up with patent law to attract FDI."  If that's China's view of patent law, of course it will do everything it can to twist the doctrines and make foreigners suffer.

But the 2009 Amendment began as discussions about improving the patent law to provide clarity and to encourage innovation.  I think this is what counts--a move to internalize patent law for China's own sake.  Now there is an emerging patent consuming industry in China, that domestic stakeholder will create internal pressure to establish good patent practice and enforcement.  And when domestic business start to look more like foreign business (Lenovo, Haier, etc.), it will be harder for courts and offices to play favorites within the confines of patent law.  At least that's my hope anyways.

Peter Yu and William Hennessey are some of the more insightful U.S. academic observers (read: law professors) on the state of IP in China.  You might gain some insight on reading their work.  U.S. Government can't even figure out how it thinks about U.S. Patent Law.  Legislative branch is deadlocked (2005, 2006, 2007, 2008, 2009 dead patent law reform).  Executive branch is spanked (Tafas v. Dudas).  Judicial Branch wants lesser patents with less certainty (KSR, eBay, LG, and now Bilski for sure).  10 years after we pushed no-field-of-technology-should-be-discriminated-TRIPs on China and the world, Mark Lemley now says U.S. Patent law is broken because it treats all technology equally.  Say what?  I think U.S.T.R. is not yelling at China about IPR issues these days because, frankly, it's kind of embarrassing when your own house is a mess.

To be sure, if I am a U.S. business moving to China, it's not because I love the Chinese patent law.  It's because the market/resource/labor etc is there.  So, if at the end of the day I decide to go to China because of market/resource/labor, then I will be a fool to ignore the Chinese patent application/trademark registration.  Some protection is better than no protection.

[MYK]

I have heard way too many horror stories.  I routinely counsel clients to stay away from China because it doesn't seem like money is well spent there on IP.  I do understand that things are improving, but my gut feeling says that China isn't there yet in terms of IP protection.

Also, I feel like the China Patent Office applies a different examination standard to US based inventions versus Chinese based inventions.  Seriously, maybe I am just being paranoid and unfair to the Chinese Patent Office, but those are my personal experiences.

I agree.  Fair enforcement is the key to any patent system, and if it's a foreign patent-holder vs. a Chinese company (which is part-owned by half a dozen local Communist Party members and officials), the foreigner will lose every time.  Of course, that's true in damn near every business transaction that takes place in China, not just patents.

[standuke]

I have heard way too many horror stories.  I routinely counsel clients to stay away from China because it doesn't seem like money is well spent there on IP.  I do understand that things are improving, but my gut feeling says that China isn't there yet in terms of IP protection.

Also, I feel like the China Patent Office applies a different examination standard to US based inventions versus Chinese based inventions.  Seriously, maybe I am just being paranoid and unfair to the Chinese Patent Office, but those are my personal experiences.

I agree.  Fair enforcement is the key to any patent system, and if it's a foreign patent-holder vs. a Chinese company (which is part-owned by half a dozen local Communist Party members and officials), the foreigner will lose every time.  Of course, that's true in damn near every business transaction that takes place in China, not just patents.

This sort of reminds me of the situation in Japan 20-30 years ago, when companies/investors discovered that no matter what the law, the de facto situation on the ground was usually biased toward the home team.  Probably it's time to stop being so surprised about this...  my understanding is that there are still lots of 'cultural' impediments to doing business in Japan.  If anything, China is more cosmopolitan, but somehow I doubt the experience of foreign-controlled companies will be much different.

On a related note, shouldn't the Chinese system of 'guanxi' be considered a form of IPR protection?  I'd be interested to see a comparison of Chinese guanxi with cross-licensing strategies or the 'rule of 3' in the US...