Patent Litigation in China: Protecting Rights or the Local Economy?

Abstract

Though it lacked a patent system until 1985, China is now the world leader in patent filings and litigation. Despite the meteoric rise of the Chinese patent system, many in the West believe that it acts primarily to facilitate local protectionism rather than innovation. Recent high-profile patent suits filed by relatively unknown Chinese firms against high-profile foreign tech companies, like Apple, Samsung, and Dell, have only added fuel to the fire. Surprisingly, given how commonplace assertions of Chinese protectionism are, little empirical evidence exists to support them. This Article fills this gap in the literature by analyzing five years of data (2006–11) on patent suits litigated in courts with the fifty most active intellectual property (IP) dockets in China. Among other things, we find that Chinese patent suits are highly concentrated in a handful of major urban jurisdictions—not in smaller inland cities where protectionism is most often alleged to take place—and also have rates of success and appeal very similar to those of US patent suits. We also observe that foreign companies appear in Chinese patent suits most often as patent enforcers, not as accused infringers, and win their cases roughly as often as Chinese patentees. Finally, we find that patents litigated in China are generally more than five years old at the time of assertion and frequently have family members issued by foreign patent offices. Together, these findings contradict conventional wisdom that China’s patent system has been structured to benefit domestic industry at the expense of foreign firms.

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