Joint seminar held on rising U.S. investigations of Chinese products involving utility patents

22:24, October 26, 2010      

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As concerns grow over rising U.S. investigations of Chinese enterprises over utility patents, China's Ministry of Commerce (MOC) on Tuesday held a seminar with the U.S. International Trade Commission (ITC) to promote mutual understanding on intellectual property protection.

"The Chinese government always pays attention to intellectual property protection. However, Chinese enterprises in recent years have become a major target of investigations by the U.S. under Section 337. In particular, this has been difficult for firms," said Zhong Shan, China's vice commerce minister, at the opening ceremony of the seminar.

Section 337 of the U.S. Tariff Act of 1930 allows the U.S. to shield domestic industries from unfair competition, according to ITC judges. Typical violations under the section include infringement of U.S. patents, registered trademarks and copyrights.

China has been the No.1 target for investigations under Section 337 since 2002. In the first 10 months of 2010, there were 16 investigations involving Chinese enterprises, accounting for 42.9 percent of all U.S. investigations under Section 337, said Fu Xiaohui, a senior official from China's State Intellectual Property Office, at the opening ceremony.

China ranks fifth worldwide in international patent registration, said Fu. In 2009, China had registered 7,946 international patents, up 29.7 percent year on year.

"No one, ITC included, will compensate our losses even if we win these lawsuits one after another, given that it causes us to miss out on business opportunities. Also, there is the cost of responding to these suits. It is unfair," said Chen Wusheng, a senior economist with the General Protecht Group.

"I think it is a novel type of trade protectionism since it allows U.S. companies to easily apply for 337 investigations," said Xu Jiali, a lawyer familiar with Section 337.

"I would advise that China set up its own form of Section 337," Xu added.

Highlighting the independent status of the ITC, James M. Lyons, General Counsel of the ITC, and his colleagues declined to make any direct comments on questions posed by Chen and Xu.



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