A recent article in the Wall Street Journal indicates that China does protect intellectual property not only for local companies but also for foreign companies. However, many foreign companies make the mistake of not applying for IP protection in China because they believe that (1) the legal system doesn’t protect IP rights or that (2) the legal system will favor Chinese companies over foreign ones. Actually, in reality these are misconceptions, and some important trends to the contrary are pointed out, such as: (1) the number of patent applications in China has grown rapidly in recent years, and the number of IP litigations has even surpassed those in the United States, which shows that IP protection is becoming more and more important in China; and (2) there have been many important cases where a foreign company has been awarded compensation after its rights were infringed by Chinese companies.  “Anecdotal evidence suggests the recent win rate for multinational companies in IP suits in China has been greater than 50%. In some cities the win rate exceeds 90%.”

Foreign companies should not ignore IP in China because of these assumptions, but should instead take a more active role. Understanding how the IP protection system works in China and taking better advantage of it is one if the most important things for foreign companies.

As one of the leading IP firms in China, Watson & Band has had experience helping foreign companies to develop a successful comprehensive IP strategy, including registering IP rights with the Chinese authorities, investigating and acting against infringers, and initiating litigation to get compensation.  We have successfully represented many multinational clients in court, including Starbucks Co., Honda, and NIKE.  As the article says, “an in-depth understanding of the Chinese judicial system and relevant legal doctrines and an ability to maneuver through the intricacies of law and politics in China are essential for foreign companies enforcing IP rights there.” 

Source: The Wall Street Journal;
http://online.wsj.com/article/SB10001424052748704259304575044150656353806.html