Ilan Cohn China Ip

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From ABC to IPC From ABC to IPC The Rapidly and Significantly Changing The Rapidly and Significantly Changing Intellectual Property Scene in China Intellectual Property Scene in China Dr. Dr. Ilan Ilan Cohn Cohn Patent Attorney, Senior Partner Patent Attorney, Senior Partner Reinhold Cohn Group Reinhold Cohn Group [email protected] [email protected]

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Opportunities in the Chinese market: Strategy, Tactics and Practical TipsSunday, January 24, 2010

Transcript of Ilan Cohn China Ip

Page 1: Ilan Cohn China Ip

From ABC to IPC From ABC to IPC The Rapidly and Significantly Changing The Rapidly and Significantly Changing

Intellectual Property Scene in China Intellectual Property Scene in China

Dr. Dr. IlanIlan CohnCohn

Patent Attorney, Senior PartnerPatent Attorney, Senior Partner

Reinhold Cohn GroupReinhold Cohn Group

[email protected]@rcip.co.il

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China: Facts*China: Facts*

• Population: ~ 1.4B people

– > 20% of World population

• GDP ~ $7.3Trillion (2007 est.)

– No. 3 in the World in absolute terms

– Per capita ~ $6,000 (2008 est.)

• Foreign reserves – > 2 trillion

– Largest in the World

• Major exporting country

– Exports - $1.435 trillion (2008 est.)

– Imports – $1.074 trillion (2008 est.)

– Annual surplus ~ $400B

* Data from CIA’s “The World Factbook”

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ChinaChina

• The fasted growing economy in the world

– 10.7% annualized growth rate in Q4/09

– 8.7% growth rate throughout 2009

• Country in transition

– Social changes

– Urbanization

– Industrialization

– Globalization

– Value-added industries increase in importance

– Change into an Intellectual Property (IP)-based economy

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IP: Universal TruthIP: Universal Truth

• The only remaining legal monopoly

• A major business asset

• 70-80% of all industrial assets are IP assets

• Exclusivity over such assets – a key value driver

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Patents: Patents: KeyKey MessagesMessages

• Key business asset

• Key business tool

• Key for

– Partnering

– Strategic deals

– Financing (private or public)

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Patents: Patents: KeyKey MessagesMessages

•• Patents Patents –– keykey player in the modern player in the modern

technology driven worldtechnology driven world

–– Integral part of any technology based deal Integral part of any technology based deal

(investment, tech transfer, M&A)(investment, tech transfer, M&A)

•• Usually a main value driverUsually a main value driver

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Case for PatentsCase for Patents

• Patents are business assets

– They serve business goals

– They serve to leverage deals and build a business

– They serve to preserve a competitive edge

• Patents: essential business tools for building and growing a technology-based business

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Contrary to MisconceptionsContrary to Misconceptions

Same Rules Apply Same Rules Apply

toto

CHINACHINA

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China: IP in NumbersChina: IP in Numbers

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China: IP in NumbersChina: IP in Numbers

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China IP: 2009China IP: 2009

• Patent applications 2009: almost 1 million (976,686)

• Patents for Invention (regular patents): 229,096

• Patents for Utility Model: 308,861

• Patents for Design: 339,654

– ~ 90% domestic applicants

– ~10% foreign applicants (mostly patents for inventions)

• Patents granted in 2009: ~ 600,000 (581,992)

– ~85% to domestic entities

– ~15% to foreigners (mostly patent for inventions)

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China IP: FutureChina IP: Future

• Number of patent applications in China is forecasted to:

– Surpass Japan in 2011-12

– Surpass the USA in 2012-13

• 2014: China is expected to become

– No. 1 in number of filed patent applications

• No. 2: US

• No. 3: Japan

– No. 1 or No. 2 destination for international filing programs

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China & IPChina & IP

• Member of TRIPS since 2001

– TRIPS

• Trade-related aspects of intellectual property rights

• Part of WTO

• Since 2001: China has been implementing many measure to strengthen IP Rights (IPRs) in China

– Changes in law

– Education of the Public

– Education of Judges

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China & IPChina & IP

• New amendment of Chinese Patent Law came into effect on 1 October 2009.

• Purpose:

– “create a favorable legal environment, market environment and cultural environment for the development of intellectual property in order to greatly improve China's capacity to create, utilize, protect and administer intellectual property. This will provide strong support for the effort to make China an innovative country and develop a moderately prosperous society in all respects.“

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China & IPChina & IP

• “Operation Blue Sky”

– In effect since May 29, 2006

– The purpose: “upgrade China's IPR protection at trade shows”

– IPR desks in trade shows

• EXPO 2010 in Shanghai

– Prosecution of IP violators

– Special EXPO IP Court

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China: IP LitigationChina: IP Litigation

Illustrative ExampleIllustrative Example

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IP Litigation: Recent ExamplesIP Litigation: Recent Examples

• 2008: > 20,000 IP litigations

– 35% increase over 2007

• 12% of litigation involving foreigners

– As either a plaintiff or defendant

• IPR holders won in 70% of case

– No differences in winning rate between Chinese and foreigners

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China: IP LitigationChina: IP Litigation

• Viagra case

– Challenge by 12 generic companies to Pfizer’s use patent

– Pfizer eventually prevailed

• Neoplan vs. Zonda Industrial Group

– At issue: Neoplan’s industrial design for a bus

– 2 year long battle

– Neoplan eventually awarded $3M

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China: IP LitigationChina: IP Litigation

• Chint vs. Schneider

– At issue: Chint’s utility model

– Schneider was found to infringe

– Original damage award: ~ $48M

– Eventual settlement upon appeal: ~$23M

• Microsoft vs. Tomato Garden

– At issue: copyright violation in software

– TG: offered for sale pirated software

– TG controller received jail sentence (3½ years) + fine (~ $147,000)

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ChinaChina’’s IP Futures IP Future

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China IP: View to the WorldChina IP: View to the World

• Major Investments in R&D

• Establishing of Hi-Tech Parks

• Government R&D sponsoring

• Chinese government goal – to turn China into an innovation (=IP) based country by 2020

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China IP: View to the WorldChina IP: View to the World

• PCT filing 2008: 6,089

– Israel: 1,882

• However:

– World No. 1 PCT filer – Huawei

• > 3,000 applications

• No of PCT filings is expected to rise to > 50,000 over the next 4-5 years

– Comparable to that of the USA

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China IP: View to the WorldChina IP: View to the World

• Subsidies to SMEs

– Program announced in September 2009

– Purpose: advance Chinese innovation worldwide

– ~$15,000 for filing PCT application

– ~$15,000 for each national application based on a Sino-PCT

– For selective cases: even larger subsidies

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ConclusionConclusion

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China IP: View to the WorldChina IP: View to the World

• Rapid economic development in China parallels increase importance in IP

• Dramatic rise in IP-related activity

• Measure intended to place Chinese innovation “on the map”

• China: on its way to becoming a world hot spot of innovation and generation of IP

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A Message to InnovatorsA Message to Innovators

• Make sure to protect your IP in China

• It is a major market in almost every field

• Protection of IP in China:

– Can open many business opportunities

• There may also be IP opportunities there

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Thank YouThank You

Dr. Dr. IlanIlan CohnCohn

Patent Attorney, Senior PartnerPatent Attorney, Senior Partner

Reinhold Reinhold Cohn GroupCohn Group

[email protected]@rcip.co.il