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How China is changing

Ten years ago, when I was Asia editor for Managing IP in Hong Kong, discussions about IP in China focused almost entirely on counterfeiting: the scale of it, how to stop it and whether the country would develop a culture of indigenous innovation

There are still plenty of fakes of course, but the debate has moved on. Foreign companies have become better at understanding the rules and procedures for protecting their rights in China and many are focusing their attention on responding to the rise of the country’s home-grown - but expansionary – businesses.

Another change has been improvements in China’s judicial system. At last week’s Women's Leadership Forum in London, Rouse’s Diana Sternfeld (right) said that her firm has litigated more than 1,000 IP cases in the country.

What has changed over time, she explained, is that China’s courts are now trying much harder to understand cases. She recounted how one judge had accompanied a raid to see how the defendants operated their counterfeiting business so as to understand the case better.

But as confidence in the courts is growing, so is demand for their services. IP disputes involving a foreign party make up a very small proportion of cases brought before Chinese judges: thousands more involve Chinese rivals.

That confidence has a downside: with courts so busy, many judges will look for opportunities to reduce their backlog and reject cases on procedural irregularities that seem trivial – and infuriating – to foreign IP owners. GE’s Catriona Hammer, for example, recalled one notary refusing to notarize a document prepared by a colleague in Sweden because it had been signed using a ballpoint pen rather than a fountain pen.

While it may not come as much comfort to IP litigants perplexed by China’s procedural red tape, the practical constraints they face may, in part, reflect a changing judicial system in which parties have increasing confidence.

For more on litigation in China, see Peter Leung's interview with Judge Chen Jinchuan, vice president of the new Beijing IP Court, in our latest issue (subscription or free trial required).

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