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Chinese companies may not have home-court advantage

Peter Leung, Hong Kong

A new report suggests that foreign plaintiffs in IP cases are winning at higher rates in Chinese courts than Chinese rights holders, notwithstanding long-standing concerns about bias in favour of domestic enterprises

According to a study from Thomson Reuters, in cases since 2006 involving foreign plaintiffs and Chinese defendants, the plaintiff won approximately 75% of the time. Meanwhile, Chinese plaintiffs facing Chinese defendants only prevailed 63% of the time.

Foreign plaintiffs also generally received higher statutory compensation- the mean award was slightly over Rmb 200,000 ($32,300) in cases with foreign rights holders, as opposed to about Rmb 120,000 for Chinese patent holders.

Though this data does not conclusively refute concerns of domestic bias in Chinese courts (for example, the difference in quality in patents held by international versus domestic companies may help to explain the higher rates of success), it does demonstrate the complexity of the issue.

Other interesting tidbits from the report:

· While more Chinese patent applications are directed at data processing systems than any other category, inventors are also filing many patents in categories such as digital information transmission, pharmaceuticals, alkaloids/plant extracts and polymer applications. In fact, filings from Chinese inventors hold nearly 80% of global applications for inventions involving alkaloids and plant extracts, about 60% of applications for general pharmaceutical activities and more than half of all patents involving polymerisation and polymer chemical modification.

· The report noted that in 2008, each Chinese patent in the data processing category received on average 1.17 forward citations. Though this is notably lower than US patents in this field (6.72 forward citations per patent), it is comparable to Japanese patents (1.82 forward cites), Europe (1.31 forward cites) and South Korea (0.76 forward cites). Data processing is the most active field for Chinese patent filers, and forward citations is one metric that some use to evaluate patent quality.

· Patent applications in China increased by 16.3 percent between from 2012 to 2013, with similarly large increases each year since 2009. However, filings by foreign applicants stayed relatively flat during this period, and thus making up a smaller portion of total patent filings in China.

The full report, "China’s Innovation Quotient – Trends in Patenting and the Globalisation of Chinese Innovation", can be found here.



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