From the monthly archives:

February 2011

To Protect in China – or not to Protect

by Rob Harrison on 9 February 2011

We’re always being asked whether it is now “worthwhile” filing for patent protection in China or not. “They’ll only just copy our ideas” is the standard response, “and we can’t enforce our patents”. That may have been a reasonable policy ten years ago – but since then the Chinese patent system has progressed tremendously.

An article in the World Intellectual Property Organisation’s December 2010 newsletter here shows the massive rise in both domestic Chinese patent applications as well as patent applications filed by foreign companies in China. WIPO’s patent statistics for 2009 show that Chinese companies filed 7,906 PCT applications (5.1% of the total applications filed) and was in fifth place behind the United States, Japan, Germany and South Korea. Chinese telecommunications company Huawei was beaten into second place with 1,847 application. It remains to be seen how many of these patents will in the end be granted. We’ve taken a non-comprehensive look at some of the Chinese-originated patent applications entering the European Patent Office and have noted that the descriptions tend to be much shorter than those originating from, for example the United States or Europe. This suggest that there may be difficulties in finding fall-back positions if close prior art is found. Unlike in the United States, the European Patent Convention offers no opportunity to file continuation applications to try and capture new subject matter in the application.

The 2009 WIPO patent statistics also show the massive number of entries from PCT applications into the Chinese Patent Office in 2008 (57,641) which is in third place behind the European Patent Office and the US PTO. This clearly shows a trend for foreign applicants to file in China.

And what about enforcement? Increasingly Chinese companies are using the patent enforcement system against other Chinese companies. It’s not just foreign companies trying to protect their rights. However as my friend Paul Jones points out in a recent newsletter, the Chinese court system can be harder to navigate than in some countries. The level of evidence that needs to be provided when filing an infringement suit is substantially higher than that required in the United States or Europe. This blogger has already experienced the inability to submit further evidence when he recently took over a trademark case. The evidence originally filed would have been sufficient to at least start the case in Europe, but it was not sufficient for the Chinese court. Attempts to submit further evidence was rejected as being too late and as Paul pointed out in a newsletter, it isn’t only European companies that fail to product in China.

On the other hand – with sufficient evidence and the right facts – it is possible to avoid the fate of some German companies who lament in this BBC report that they could not defend their apparent rights. We’ve seen so often the complaint that Chinese companies copy technology. But that’s the purpose of the IP system – if you want to stop copies, then you have to put your IP in place at the right time. It’s no good complaining after the copying has taken place.

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Protection of Trade Secrets

by Rob Harrison on 6 February 2011

One of the unsung heros of the IP world are trade secrets. They can provide substantial protection to innovators and help to protect and sustain products, as long as the trade secrets are actually kept secret. Unfortunately in the European Union the laws are generally inadequate. There may be provisions – such as in the German law on unfair competition – which restrict a former employee disclosing trade secrets to his new employer. But what happens with knowledge illicitly gained? There’s no clear answer in most countries. It’s interesting therefore to see the legislative initiative in France reported Pierre Breese’s blog here in French. The proposer, French MP Bernard Carayon (link to Wikipedia article here and personal website here) is noted for his defense of French interests.

The text (in French here) could do with some improvement, but is a great start in introducing statutory protection going beyond the theft of trade secrets by former employees. It could certainly serve as an excellent basis for an European-wide directive which is sadly lacking.

Wikipedia article on the US Uniform Trade Secrets Act is here.

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