Intellectual Property Rights Protection in China: Litigation and Economic Damages

06 January 2006
By Dr. Alan Cox with former NERA Senior Consultant Kristina Sepetys

Intellectual property rights (IPR) historically have not received strong protection in the People's Republic of China. Recently, however, as a result of external pressure and internal economic objectives, China is moving closer to the IPR practices and standards found in Western nations. A growing economy, more sophisticated laws, and increased attention to enforcement have led to IPR infringement cases being brought before Chinese authorities in increasing numbers. However, despite this progress, cases are not yet being brought in sufficient numbers, nor are fines and damages awards under existing law large enough to deter infringement or compensate IPR owners for losses.

In this article from Global Intellectual Property Asset Management Report, NERA Senior Vice President Dr. Alan Cox and former NERA Senior Consultant Kristina Sepetys warn that IPR violations may ultimately have negative effects on the broader Chinese economy by discouraging investment and imposing costs upon those companies attempting to offer goods and services. As China becomes a major player in the world economy, it likely will strengthen its commitment to upholding and enforcing international IPR. Chinese laws and regulations are converging with international standards. Patent, trademark, and copyright applications are being filed in growing numbers and damages and fines are increasing. However, violations continue to be widespread. Work remains to be done if China is to accord with other major economic powers in the area of IPR protection, particularly in the area of enforcement and damages.