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14 September 2016
Recent findings show that court decisions have been most favourable for foreign patentees, despite the common perception that China’s legal system is protectionist and biased towards domestic industry.
According to data collected by CIELA, global law firm Rouse’s Chinese IP litigation analysis service, out of all 346 first-instance patent infringement cases initiated by foreign plaintiffs between 2006 and 2014, the foreign parties won 282, achieving a 82 percent win rate.
The result put foreign and domestic plaintiffs on a level playing field: In cases where only domestic parties were involved during the same period of time, 81 percent of plaintiffs won their suits.
CIELA’s data is consistent with a report published by Beijing-based Kangxin Partners which found an 89 percent win rate in 117 first-instance patent suits initiated by foreign companies between 2013 and 2015. On the contrary, there were only 11 cases filed against foreign companies by Chinese plaintiffs, resulting in an 82 percent win rate.
British vacuum cleaner manufacturer Dyson had lodged 21 patent lawsuits in seven Chinese courts, by far the most litigious foreign company. German industrial conglomerate Robert Bosch came second with seven cases, in front of Japan’s SMC, which filed four. All cases were won by the foreign plaintiffs.
In June, the Beijing Intellectual Property Court also revealed that foreign plaintiffs have notched a 100 percent win rate in civil cases heard by the court last year. “There were altogether 63 first instance civil cases in which foreigners are plaintiffs, and they all won,” Judge Gang Feng said in his speech at a forum.
Lucy Li, a partner and patent attorney as well as co-author of Kangxin’s research, attributes the high win rate to the due diligence efforts foreign plaintiffs tend to make before filing a case.
“The reason for such a high win rate may be that foreign multinational companies have sufficient evidence to prove that the defendants have infringed their patent rights,” Li says.
In his speech, Feng also added that there are three principles when it comes to foreign-related IP cases: the principle of national treatment, the principle of minimum protection standard and the principle of public interest.
Li says that Feng’s speech emphasized the equal treatment foreign litigants would have in courts. “The principle of national treatment means a foreign litigant enjoys rights equal to the local litigant,” she tells Asia IP. “The principle of minimum protection standard and the principle of public interest means there is a minimum compensation if an infringement is raised, meanwhile the public interest may influence the detailed compensation.”
Despite the encouraging win rates, Aria Tian, who heads up Rouse’s China research unit, says that some challenges remain for foreign companies in IP litigation. It is still difficult to get reasonable damages to compensate for the infringement, and enforcement of judgments also remains an issue.
