Increasing U.S. investigations over alleged IPR infringement have forced more and more Chinese companies to actively register patent rights across the world in an effort to protect their own rights and prevent potential lawsuits.
Many production, knowledge and technology-based Chinese enterprises have suffered from global accusations over IPR violations without making their patents registered at the initial stage.
U.S. international Trade Commission (USITC), a major complainant, has instituted 46 Section 337 investigations against Chinese companies since 2002, making China the largest victim among other countries, according to statistics from the Chinese Ministry of Commerce.
The commission launched 12 investigations against Chinese firms since the beginning of this year, involving 1.66 billion U.S. dollars, up more than 43 percent as against the same period of last year, the statistics show.
Section 337 investigations were put forth against products imported to the United States that are suspected of constituting unfair competition. This is particularly based on the infringement of intellectual property such as patents and trademarks, according to Section 337 of the US Tariff Act of 1930.
Of the 39 concluded cases, 28 Chinese companies, including a major battery manufacturer facing charges from U.S. rival Energizer, were found innocent or reached compromises with complainants, said Yu Benlin, officer with the ministry, at an IPR forum held on the sideline of the ongoing 11th China International Fair for Investment and Trade in this coastal city of east China's Fujian province.
Many Chinese enterprises did not realize to register patent rights for inherited traditional techniques, said Yu, citing the case that a group of wood floor manufactures were charged with violating a technique about seaming up floor pieces with special rabbet designs -- a skill invented by an ancient Chinese carpenter nearly 1,500 years ago.
They just took it for granted to use the technique in the designing and production process, but some foreign companies had registered patent rights for it beforehand, according to Yu.
Registering patent rights in the United States, Europe, Japan and other key trade markets is becoming a common practice among Chinese firms, which have been striving to expand business and improve economic and trade cooperation, said Li Yong, vice general manager with the Xiamen Overseas Chinese Electronic Co., Ltd., known as Prima outside China.
Early registration is a forceful weapon fighting against IPR accusations, said Li, whose company has registered more than 400 patent rights about a large variety of quality electronics products.
"Establishing a big patent reserve and forming a unified team with other companies involved is a lesson we learnt from trade frictions with foreign firms," he stressed.
A latest report from the World Intellectual Property Organization show that China has become the world's third largest patent right applicant. In 2005, China applied for some 170,000 patent rights, up nearly 33 percent as against 2004. Moreover, China is the fourth largest nation, after the United States, Japan and Republic of Korea, whose patent applications were approved.
In addition, the Chinese State Intellectual Property Office accepted 3,910 applications for international patent rights, almost fivefold of that in 2000.
While establishing a patent reserve mechanism, Chinese companies should also try to learn the U.S. patent systems and find out the judicial differences between the two countries, said J. James, attorney with U.S.- based Howrey Law Office, who has dealt with Section 337 investigation for many years.
The Chinese government will help companies to tackle U.S. IPR investigations by ways of developing "IPR insurance" to shun risks and promote communications with USITC, said Yu.