There is a lot in the news about IP piracy and counterfeiting in China. This
may cause you to be indecisive about whether or not it is important to file
patents there. It is also very clear from the numerous analytics work we have
done in almost every industry that only a handful of companies have a clear
filing strategy. Many of our clients ask us what they should do. We have seen
that today most IP infringement problems in China center around copyright and
the entertainment industry, but we are predicting that patent disputes will
become in vogue following the historical trends of other companies. Historically,
only those companies that have the foresight to develop patents in developing
IP countries have early leverage and benefits.
We feel, and have been advising during our IP strategy engagements, that since
China is a large manufacturing hub with a large growth market in the world,
it is important to protect your intellectual property there. Although intellectual
property laws were only enacted relatively recently in China, the Chinese government
and industry is recognizing the value in IP. The growth rate of patent filing
in China is about 20% per year in the last few years. In fact, 90% of IP enforcement
actions are being brought by Chinese against Chinese entities. The government
is allowing larger statutory damages awards in IP infringement decisions as
it seeks to increase the negative consequences of infringing on intellectual
property rights, notwithstanding the challenge of the dichotomy of the future
implications of IP rights in a communistic country.
China has three different kinds of patents: Utility Model, Design and Invention.
The Utility Model and Design patents have 10 year terms while the Invention
Patent has a 20 year term. There is a place for each of these types in your
strategy to protect your IP in China.
If you are wondering if you should strategically develop IP rights in China,
we would suggest you understand initially what other competitors are doing by
developing an IP Landscape and IP analysis of the landscape and if that leads
to concerns, you may consider an IP Strategy to guide you to developing the
"right kind of IP" in China. You can't enforce IP in China if you don't have
IP there! Please contact us if you would like
help in developing an IP strategy to protect your
rights in China.
Five key issues should always be considered when making a decision on foreign
filing of IP:
Presence of competitors selling, making or licensing
By developing an IP landscape and doing an
IP analytics you can know if your competitors
are investing in patent protection in a particular country. This may presage
their market entry in that country. The Landscape will help you understand
the Value Chain, competitors, purchase chain and patent exhaustion issue that
will help you deal with what and where to file patents.
Size of relevant market
By doing a marketing valuation of your product and linking this to the IP
Landscape we can get an understanding as to whether the market in China is
large enough to justify the expense of filing and maintaining a patent to
protect it there. Also, through our IP analysis you may find that there is
potential for licensing your patent there? We have provided many IP valuations
to help our clients answer these questions.
Ability to enforce
When considering claims to file, it's important to understand several
aspects of the potential claims to see if they have the strength for enforcement.
We have been working with our collaboration partners to link patent claims
to reverse-engineerablity processes, a key step in understanding if the particular
patent claims are detected. Is the legal system of the particular country competent
for enforcing intellectual property rights? Is there a good track record of
enforcement? Also, our IP navigation service allows us to further strengthen
the invention to ensure that it is as strong as possible before filing. We
have found many clients requesting this service because it is felt the patents
they do file should be very strong.
Even if the answers to the above questions do not drive your company to file
patents in China, it's important to consider what the future trends
in China are. Almost all predictions show China GNP expanding for the next
20 years and, along with this, their legal system is improving as well.
This means manufacturing will continue to move there from developed countries.
This forecast tells us and our clients that "in-licensing" (that
is, licensing in manufacturing technology to use in China) is increasing to
establish a manufacturing base. Our IP dimensional
scoring methodology is very useful for reviewing large groups of patents
in a field to find those that are valuable enough for you to in-license and
for finding early and inexpensive partner arrangements. ipCG has a full staff
of trained licensing professional to help you in your goals for in-licensing.
Many our clients understand that it is very difficult to control their technology
once it's released into China. However, ipCG has developed a proprietary
methodology for IP firewalling, that includes processes such as 1) locking
down trade secrets, 2) bifurcating technology, and 3) redesign inventing for
ensuring non reversibility etc.
Through use of ipCG's services and experienced staff, we can help you
answer these questions about China and recommend the right IP
strategy for your situation.