Patent Law Practice Center

Infringers may soon pay a heavy price in China

Chinese President Xi Jinping recently made some unusually strong comments regarding intellectual property. “Wrongdoing should be punished more severely so that IP infringers will pay a heavy price,” Xi said.

According to IAM, the comments from President Xi are the most extensive he’s made in public on the subject of intellectual property protection. He called on national authorities to advance IP regulations, improve the quality and efficiency of examinations and to accelerate the building of IP institutions. The remarks are a major acknowledgement of the importance of strong IP protections to a nation’s economy, directly from the head of state of one of the world’s major economies.

Political leaders in Washington, DC should take notice of Xi’s comments. In China, where there is single-party rule, change can happen dramatically, as we have already seen on the patent and innovation landscape. With the support of President Xi, China could very quickly move to become the preferred jurisdiction for innovators, given the market size afforded by a country with 1.4 billion people. If acted upon in a serious way, this new Chinese approach to dealing with infringers could send a shockwave through the entire intellectual property community, if not the entire world economy.

“President Xi’s statement on the importance of IP enforcement indicates China’s growing status as a leader in innovation,” said Erick Robinson, a U.S. patent attorney based in Beijing. He is Director of Patent Litigation at Beijing East IP. “China knows that only by protecting patent rights will individuals and companies have incentive to create new technical solutions.”

At a time when President Xi is actively moving China’s IP policy to a place where infringers are met with harsher penalties, some Congressional leaders support legislation that continue attempts to further gut the U.S. patent system, allowing infringers a free holiday and the ability to infringe without consequence or penalty.  In recent days, the House IP subcommittee has piled on, looking for ways to further reduce venue for plaintiffs in infringement suits and turning into a forum for attacking judges on patent cases and the critics of patent reform.

While factions within the U.S. seriously discuss further dismantling the U.S. patent system in favor of infringers, China takes the lead in increasing the enforceability of patents.

Understanding the Rules of the Game for Doing Business in China

There are significant hurdles to doing business in China. But with a population over 1.4 billion people, the Chinese marketplace is one that rightfully attracts attention from those interested in doing business abroad.

If your business does not quality as a “small entity” at the USPTO, then you absolutely should be doing business in China. But if you own a truly small business or start-up company, you almost certainly do not have the resources necessary to be doing business in China in a proper and responsible way. Where the threshold is between too small for China and too big not to be doing business in China is hard to say, but it is fair to say that all businesses of all sizes should at least investigate the realities of doing business in China and have a China strategy in place.

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