NERA Releases Report on Intellectual Property Litigation and Damages Trends in China

13 February 2009

13 February/New York -- Though intellectual property rights (IPR) infringement damage awards continue to be small in China, the number of IPR awards appear to be increasing and foreign firms seem to be faring better in Chinese courts than Chinese firms, according to a report released today from NERA Economic Consulting.

Intellectual Property Rights Protection in China: Trends in Litigation and Economic Damages analyzes the changing role of Intellectual Property Rights enforcement in China and examines trends in damages awards in IPR cases in China, using a proprietary database, developed by NERA, of cases filed in China between 2002 and 2008.

The authors of the report, NERA Senior Vice President Dr. Alan Cox and Senior Consultant Kristina Sepetys, found that while there has been a marked increase in IPR infringement cases being brought before Chinese courts and, consequently, in the frequency of damage awards over the past decade, the damages both claimed and awarded tended to be very small compared to those in other jurisdictions and compared to the likely degree of harm caused.

"As in other increasingly knowledge-based economies, innovators wish to be able to protect their intellectual property," Dr. Cox points out. "Continued progress in the imposition of economic damages in intellectual property rights cases are likely to be in China's best interest as research and development continues to become more important to the economy."

Notable Findings of the Study Include

  • In cases involving a Chinese plaintiff and a Chinese defendant, the plaintiff received a lower median award than when the plaintiff was foreign.
  • More than 90 percent of all IPR damages awarded in China are under $100,000.
  • The highest damages award in each of the last five years are: $2.78 million (2008 - midyear), $44.3 million (2007), $210,000 (2006), $1.1 million (2005), and $50,000 (2004). The median damage award in the NERA database was $34,722 for patent infringement, $18,109 for copyright infringement, and $18,488 for trademark infringement.
  • Companies based in the US, France, Japan, and Germany make up 50 percent of plaintiffs in the cases reviewed, but less than 5 percent of defendants.

 

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For over half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

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