Released on: June 4, 2008, 6:56 am

Press Release Author: Evalueserve

Industry: Law

Press Release Summary: Shanghai, China - May 15, 2008: China, one of the world's
largest and most promising markets, has seen a 20 percent annual increase in patent
application filings over the last fifteen years. In 2007, the State Intellectual
Property Office (SIPO) of China received 694,153 patent applications, an increase of
21.1 percent over the previous year. These applications included filings for all
three types of patents granted in China: Invention patents (valid for 20 years from
the date of filing), Utility Models (valid for 10 years), and Design patents (also
valid for 10 years). With regard to invention patents (20 year patents), China is
currently third in the world behind the United States and Japan. In its latest
study, Evalueserve, a global research and analytics firm, forecasts that if patent
filings in China continue to grow at the current rate, the SIPO will overtake the
USPTO (United States Patent and Trademark Office) by 2012.

Press Release Body: Although China is still struggling with the image of being a
safe haven for intellectual property counterfeiters and thieves, during the last two
decades it has developed its patent system significantly, and incorporated an online
and searchable patent database, a robust appeal mechanism, and a hierarchy of courts
for handling intellectual property disputes. As a result, more than four million
patent applications were filed from early 1985 to December 2007. The first million
applications were filed over 15 years, but the last million took only 18 months.
These measures also resulted in a substantial increase in lawsuits related to patent
infringement. For example, in 2005, 2,947 patent-related cases were filed in Chinese
courts, representing an increase of 15.6 percent from 2004. In contrast, the number
of patent-related lawsuits in the United States decreased from 2,973 in 2004 to
2,812 in 2006. The difference in the number of legal cases related to all forms of
intellectual property (e.g., patents, trademarks, copyright, and trade secrets) is
even more significant: in 2005, 13,424 cases were filed in China, whereas only
10,905 were filed in the United States.
Patent-related lawsuits involving international companies such as Pfizer, Honda,
Philips, and 3M have increased by 77.5 percent over the past year. The number of
closed cases in which at least one of the parties was a non-Chinese company reached
268 in 2005. But contrary to popular belief, the playing field within the
intellectual property system in China seems to have become more level. According to
the No. 1 Intermediate People's Court of Beijing, foreign parties won 60 percent of
these cases. Hence, it is now more important than ever for international companies
to develop their China-specific patent strategies. By not doing so, they may become
targets for patent infringement, as Schneider Electric (France) was by The Chint
Group (China). In this case, The Chint Group alleged that Schneider Electric
infringed on one of its 10-year patents. The Wenzhou Intermediate People's court
ruled in favor of The Chint Group and awarded damages worth CNY 330 million
(approximately USD 45 million). Schneider Electric has since appealed to a higher
court, but regardless of the outcome, it would have accrued considerable expense and
trouble that could have been probably avoided had it invalidated this 10-year patent
before The Chint Group filed its lawsuit
Research conducted by Evalueserve also indicates that 99 percent of all utility
model patents (10-year patents) are filed by domestic Chinese companies. Since these
10-year patents do not undergo substantive examination, Chinese companies use them
to their advantage, whereas international companies largely neglect them. In its
study, Evalueserve suggests that even if international companies operating in China
do not file 10-year patents, they should at least obtain help from local patent
professionals and regularly review all such granted patents in their domain, and
even work proactively to invalidate some of them. Finally, these international
companies need to realize that simply importing their intellectual property
strategies from their home countries may not be effective and that new
China-specific strategies may be required to deal with the ground realities in
China.
About Evalueserve
Evalueserve provides custom research and analytics services to companies worldwide
including Business Research, Market Research, Data & Financial Analytics, Investment
& Financial Research, Intellectual Property & Legal Research services, and also an
access to a global network of domain experts through its Circle of Experts,
www.circleofexperts.com The firm currently has over 2,250 professionals located in
its research centers in Chile, India, and China. In addition, it has 50 Client
Engagement mangers that are located in most major business and financial centers
globally - from Silicon Valley to Sydney - and has completed more than 13,000
projects since its inception in December 2000. Its Shanghai Research Center has 140
employees who are working on projects in Chinese (Mandarin), Korean, Indonesian,
Thai and Japanese languages, and delivering the results in English. For more details
visit www.evalueserve.com.
Disclaimer
EVS Contact
Sandra Winkler
Tel: + 86 21 6440 3360 (ext: 640)
Sandra.winkler@evalueserve.com
Although the information contained in this article has been obtained from sources
believed to be reliable, the author and Evalueserve disclaim all warranties as to
the accuracy, completeness or adequacy of such information. Evalueserve shall have
no liability for errors, omissions or inadequacies in the information contained
herein or for interpretations thereof.


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