Patent Law

Made in China

By Gary Odom and Jordan Kuhn

China's free-for-all in intellectual property is becoming past tense. The number of patents and patent lawsuits has doubled in the past five years. Over 850,000 Chinese patents are now active. The big winners are Chinese patent lawyers.

A radical departure from Maoist private property prohibition, China just began to enact patent laws in 1985. Enforcement was practically non-existent until 2001, when China was vying to gain admission into the World Trade Organization.

China has since opened more than 50 courts to handle IP cases. The low cost of filing a suit gives incentive for Chinese firms to pursue litigation. Tony Chen with Jones Day in Shanghai: "If you can afford a car, you can afford a lawsuit."

Only 3% of U.S. patent litigations make it to trial. Companies settle, fearing huge jury awards. Not so in China, where judges, not juries, decide, and damages tend to be relatively miniscule. But since they typically cover legal costs, lawsuits are a self-funding method for battling piracy.

Chinese IP lawyers are raking it in, some reportedly earning more than $5 million a year, a far cry from just a few years ago. While non-Chinese law firms may consult, they are not allowed to prosecute or litigate patents - a proprietary privilege Chinese lawyers are keen to keep.

Source: The Economist

Full post as published by The Patent Prospector on April 19, 2008 (boomark / email).