The government is to establish a litigation response contingency
fund to help companies deal with intellectual property rights (IPR)
disputes, the State Intellectual Property Office (SIPO) has
said.
The move comes in the face of increased IPR disputes since
China's accession to the WTO in 2001.
The United States International Trade Committee (ITC) has
launched 12 cases against Chinese companies - involving $1.66
billion - from January to August this year, Ministry of Commerce
officials said.
The number of cases and the amount of money involved showed a
year-on-year increase of, respectively, 43.8 percent and 43.2
percent, Yu Benlin, deputy chief of the ministry's fair trade
bureau, said.
Such investigations have jeopardized China's hi-tech industries
and structural upgrades in the country's trade exports, he
said.
For the fifth year in a row, China was accused of the most
violations under Section 337 of the Tariff Act of 1930. By the end
of last year, the US had launched 58 investigations against Chinese
companies, since it joined the WTO. There were 13 cases lodged in
2006, accounting for 39.3 percent of the world's total.
SIPO deputy chief Zhang Qin said there were two reasons for
this. First, some Chinese firms do not fully understand IPR
protection.
Second: "We cannot rule out the fact that some transnational
corporations abuse their IPR rights and attempt to snuff out the
emergence of Chinese firms."
Wrong impression
Many small and medium-sized firms choose not to challenge IPR
accusations in court because of time constraints, complexity and
expense, Yu said.
This may have given US investigation agencies the wrong
impression that IPR infringements are common among Chinese firms,
Yu said.
"This situation has led to (problems) for Chinese companies and
the issuance of exclusion orders by foreign companies preventing
them from doing business in the US market."
Global rivals request investigations against Chinese companies
to prevent them taking significant market share and force them out
of the US market because of prohibitive litigation costs, Yu
said.
According to the commerce ministry, Chinese companies have
suffered lost opportunity costs of between $69.1 billion and $147
billion in recent years as a result of IPR disputes.
The SIPO intends to create a steering committee on corporate IPR
management and a mechanism for expert assistance, helping Chinese
companies with their patent strategies.
It also aims to provide research for new technologies and
products, as well as drafting IPR management charters.
Additionally, it aims to evaluate company performance regarding
IPR protection, establish information platforms for domestic and
global patents
It will also introduce technology monitoring mechanisms to track
the activities of competitors to Chinese firms.
(China Daily September 11, 2007)