03/12/2012
We all know about China’s prolific manufacturing capability. From simple toys to high-end computers we are rarely surprised to see the familiar label “Made in China” emblazened somewhere on the product. So, what do you do if you think a factory in China is making a product just like yours without your permission for export around the world. You want them to stop NOW and, of course, you are on a budget.
As patents are national rights that are only enforceable in the country in which they are registered, if you have no Chinese patent you have no right to enforce. You could rely on patents you have in other countries, like the UK or US, and bring a patent infringement action in these countries to stop import from China of your patented product, but this would mean separate litigation in each country and, of course, you would only be able to stop import in the countries where patent protection exists. Even if successful in these countries, the factory in China could keep on producing, and simply export to fewer countries.
With a patent in China you could stop the problem at the source and stop export to all countries around the world in one action. In addition, not only is patent litigation in China relatively cheap, but it is also relatively quick (typically 6 to 12 months from start to finish). In contrast to many countries, in China the majority of patent infringement suits go to trial and, in the main jurisdictions of Beijing and Shanghai, an 80% success rate for foreigners has been reported. There is a lot of patent litigation in China and it is increasing rapidly (35% between 2010 and 2011).
What if your budget will not extend to filing a patent application in China? Rather than filing a patent application, you could file a utility model application. Utility models are a type of so-called ‘petty’ patent with a 10 year lifetime, available for certain technical solutions. The shorter lifetime is typically most suitable for short life cycle products such as those in the electronic fields. The inventiveness requirements for utility models are lower than for patents but their enforcement is almost the same. Utility models are not examined substantively by the State Intellectual Property Office.
Altogether, this provides an enforceable right, at low cost, low time to grant and with a high certainty of grant. Chinese applicants appear to love utility models: over 400,000 were filed by Chinese applicants in 2010, but only around 2,500 by foreign applicants. Foreign applicants, it seems, might be missing a trick.
Finally, suppose a Chinese competitor with a patent or utility model sues your Chinese manufacturer for infringement. It would be helpful to have an enforceable right as a defensive position with which to countersue. A popular strategy in China to build a robust defensive position to protect core technology is to file a utility model application (and often more than one) in parallel with a regular patent application. This typically gives focussed protection quickly followed-up by broader, more comprehensive cover.
Talk to us about protecting your innovation in China.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking before any action in reliance on it.
