autumn&in&ohio& and&ip&in&china - utoledo.edu...autumn&in&ohio&...
TRANSCRIPT
Autumn in Ohio And IP in China
Mark Cohen [email protected] www.chinaipr.com University of Toledo
10/3/2014 THESE ARE MY PERSONAL VIEWS!!!
Table of Contents • Ohio in the Autumn and China
– Role of Plans – ImplicaQons for PatenQng – ImplicaQons for Enforcement
• Is Chinese patenQng a threat? • Is Chinese IP enforcement a threat? • What does the future hold?
– Copyright – Licensing – Patent ApplicaQons – CooperaQon
• Study the Plan and Develop a Strategy! • A Quiz
3
The Chinese government is involved -‐
China Sees IPR In Its Strategic Self-‐Interest
• 12th Five Year Plan • 15 Year Science and Technology Plan • NaQonal IPR Strategy • NaQonal IP and Patent strategies • 15 year medium and long range plan • Local plans, Ministry plans…
4
Plans
• GE’s Jeff Immelt: GE’s leaders “digest, study and analyze” five year plans, because “the Chinese actually do it.” hdp://www.youtube.com/watch?v=d9JtX8uWt3s (at 3:55-‐4:20).
Or Is the Problem Excess Government Involvement?
“[T]hose shaping science policy and those working at the bench clearly recognize the problems with China's current research culture: It wastes resources, corrupts the spirit, and stymies innovaQon. The Qme for China to build a healthy research culture is now, riding the momentum of increasing funding and a growing strong will to break away from damaging convenQons. A simple but important start would be to distribute all of the new funds based on merit, without regard to connecQons. Over Qme, this new culture could and should become the major pillar of a system that nurtures, rather than squanders, the innovaQve potenQal of China…” Editorial, “China’s Research Culture”, Science (Sept. 3, 2010) (Yigong Shi and Yi Rao).
6
At 3.3 patents per 10,000 in the New 5 Year Plan, What State Will China
StaQsQcally Resemble?
7
AT WHAT TIME OF YEAR DOES CHINA INNOVATE? *
* (or create patents)
Comparison to Patent Filings
11
China Invents by Season Patent CooperaQon Treaty Filings
0
500
1000
1500
Janu
ary
February
March
April
May
June
July
August
Septem
ber
Octob
er
Novem
ber
Decembe
r
2009 PCT Filings (China)
0 5000
10000 15000
Janu
ary
February
March
April
May
June
July
August
Septem
bOctob
er
Novem
beDe
cembe
PCT Filings Less China
What About Enforcement?
14
Administrative Enforcement
Trends in Patent AdministraQve Enforcement
0
500
1000
1500
2000
2500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Number of Patent Related AdministraKve AcKons Accepted by Year
2010 2011 2012 2013*
15 *2013 data through September
China: AdministraQve Patent Enforcement Data
16
Infringement Disputes
Other Disputes
Patent Passing-‐off Total
2004 1414 66 1689 3169 2005 1360 132 2409 3901 2006 1227 43 966 2236 2007 986 27 713 1726 2008 1092 34 1316 2442 2009 937 26 578 1541 2010 1077 18 728 1823 2011 1286 27 1704 3017 2012 2225 268 6512 9005
2013 (Jan-‐Sep) 2771 205 5526 8502 2013 (annualized*) 4426 820 13872 19118
*2013 data annualized based on 2012 trends
Chinese PatenQng a Threat?
China: Explosive Growth of Civil IP Cases
18
0
10000
20000
30000
40000
50000
60000
70000
80000
90000 1985-‐2012 IP Civil Cases of 1st Instance (Accepted)
Comparison: Patent Cases Filed in U.S. and China Civil Courts
19
2491 2572 2735 2516 2493 2707 3532
5423 2947 3196
4041 4074 4422
5785
7819
9680
0
2000
4000
6000
8000
10000
12000
2005 2006 2007 2008 2009 2010 2011 2012
U.S. Civil Court China Civil Court
China: InvenQon Patent InjuncQon
20
Court Percentage Number of cases
1 Beijing 2st Intermediate 100% 27
2 Guangzhou Intermediate 100% 14
3 Shanghai 1st Intermediate 100% 14
4 Shanghai 2st Intermediate 100% 10
5 Beijing High People's Court 100% 23
6 Shanghai High People's Court 100% 15
7 Jiangsu High People's Court 100% 13
8 Chongqing High People's Court 100% 11
9 Changsha Intermediate 93% 15
10 Guangdong High People's Court 89% 37
Source www.ciela.cn
Average Damages Awarded: Inv.
383 cases, InjuncQon RaQo: 71.5% Source: www.ciela.cn (March 21, 2011)
21
Average Damages Awarded: Designs
1,197 Infringement Cases, InjuncQon RaQo: 81.5% (Source: www.ciela.cn, March 21, 2011) 22
Average Damages Awarded: UMP’s
630 cases. InjuncQon RaQo: 73.75% Source: www.ciela.cn (March 21, 2011) 23
Copyright Comparison
• InjuncQon RaQo: 79.5% (similar to designs) • Damages – Most Similar to Designs
5,203 cases. Source: www.ciela.cn
24
UQlity Model and Design
Patents may be more difficult to invalidate as they have a lower threshold for invenQveness.
Although patent cases
have been increasing In patent cases involving a Chinese ∏and a Chinese ∆ , foreign∏ receive a lower median award.
.
25
CASE PATENT DAMAGES (x million RMB) STATUS
Chint v. Schneider UQlity Model 330 First Trial, 150 Sedled Sedled (‘09)
CEPT v. FKK & Huayang InvenQon 50.61 Retrial Ended ('09)
Holley v. Samsung InvenQon 50 First Trial Ended ('08)
Zhengzhou Top v. Tailong Co. InvenQon 29.8 First Trial Ended ('06)
Neoplan v. Zhongwei Design 21.16 First Trial Ended ('09)
Strix v. Zhejiang Jiatai & Leqing Fada InvenQon 9.1 Sedled ('10)
43 73 106 167
268 351
668
1139
1361 1369
0
200
400
600
800
1000
1200
1400
1600
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Foreign-‐Related Cases
Enforcement Trends
13%
22%
59%
1%2% 0%
3%
2011 Civil -‐59,882 Patent (5,785)
Trademark (8,460)
Copyright (24,719)
Tech Contract (670)
Unfair Comp (1,098)
Antitrust (33)
Other (1,966)
US/China Comparison
27
0
5,000
10,000
15,000
20,000
25,000
30,000
Patent Trademark Copyright
China US
Shanghai
一审审结知识产权民事案件涉外涉港澳台数量图
51
2412 16
3
64
3722
229
3722 21 26
3
37 34 34
214
0
50
100
150
200
250
2010 51 24 12 16 3 64 37 22 229
2011 37 22 21 26 3 37 34 34 214
涉美 涉德 涉法 涉日 涉英涉其他国家
涉港 涉台 总计
First Instance Foreign Related IP Cases
USA DE FR JP UK OTH HK TAI TOTAL
Total Civil and Commercial to IPR Civil
7169083
57068
2011
Excluding IPR
IPR
January 2010-‐December 2010
InvenQon UQlity Model Design Total
Number % Number % Number % Number %
Total
Sub-‐total 391177 100.0% 409836 100.0% 421273 100.0% 1222286 100.0% Service 319271 81.6% 244727 59.7% 203872 48.4% 767870 62.8% Non-‐service 71906 18.4% 165109 40.3% 217401 51.6% 454416 37.2%
DomesQc
Sub-‐total 293066 100/74.9 407238 100/99.4 409124 100/97.1 1109428 100/90.8
Service 223754 76.3% 242479 59.5% 192337 47.0% 658570 59.4%
Non-‐service 69312 23.7% 164759 40.5% 216787 53.0% 450858 40.6%
Foreign
Sub-‐total 98111 100/25.1 2598 100/0.6 12149 100/2.9 112858 100/9.2
Service 95517 97.4% 2248 86.5% 11535 94.9% 109300 96.8%
Non-‐service 2594 2.6% 350 13.5% 614 5.1% 3558 3.2%
Patenting Trends: Applications for Three Kinds of Patents
Received (Domestic vs. Foreign)
30
Independent Inventors US
US Companies 45.4% US Government 0.5 Individuals 6.8 Foreign Cos. 44.5 Foreign Gov 0.0 For. Individ. 2.7 (hgp://www.uspto.gov/go/taf/topo_06.htm#PartA1_2b)
China (2006) • InvenQon Patents – Service 79.5% – Non Service 20.5% • Designs – Service 37.8% – Non-‐Service 62.2%
• UMP’s – Service 37.1%
– Non-‐Service 62.9%
2010: 17,359/96,921=18%; China 2010: 18.4% (invenQons), 37.2% total
UQlity Model Filings
0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000
China Korea Germany
2007
32
Source: “中国知识产权世界影响正日益广大” (China’s influence on intellectual property in the world is ge�ng greater each day), China Intellectual Property News, Nov. 27, 2009, at 03.
Trademark Filings: Highest in the World for Over 10 Years
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
TRADEMARK APPLICATIONS
Patent Trends
0
10
20
30
40
50
60
70
80
90
100
1 2 3 4 5 6 7 8 9 10
UMP Maintenance -‐ 10 Year Period Percentages
China
Foreign
Maintenance Rates Chinese vs. Foreign at SIPO
Overall Comparison to IP-‐5
图2 样品图二
Patent for What ?
Xu 许 vs. XueQiang 雪强公司 [2008] 民申字第762号
• 6/13/2001: Xu filed a design patent for “Tatami Mat” • 3/6/2002: Xu’s patent was granted • 3/2004: Hangzhou Customs and Shanghai Customs detained
XueQiang’s cargo for infringement at Xu’s request • 4/2/2004: Xu sued XueQiang for patent infringement and requested
the Hangzhou Intermediate Court seal and detain XueQiang’s cargo • 5/1/2004: XueQiang requested that SIPO invalidate Xu’s patent • 8/18/2005: SIPO declared Xu’s patent invalid • 9/15/2005: XueQiang sued Xu for mistakenly detaining its cargo • Hangzhou Intermediate Court affirmed Xu’s detainment acQons and rejected XueQiang’s
request • XueQiang appealed
– Zhejiang Higher Court rejected XueQiang’s request • XueQiang appealed to the Supreme People’s Court for reconsideraQon
– Supreme People’s Court determined Xu’s detainment acQon was wrong, as Xu detained XueQiang’s cargos before a final determinaQon on XueQiang’s patent infringement
38
Chinese Companies Receiving Subsidies
78
22
DomesKc and Overseas Patent Filings
Received Subsidies
No Subsidy
39
Peter Ollier and Janice Qu, “China’s Global IP Plans Revealed”, Managing Intellectual Property (Nov. 2010), at 44, survey of 80 Chinese in-‐house lawyers.
What Chinese In-‐House Counsel Say
• “For important technology we file an invenQon patent. The decision is made by our technology administraQve commidee. But we don’t really apply for uQlity model patents now. Out of our over 80 patents in China, 35 are uQlity models. Of the 20 patents we have pending in China, the majority are invenQon patents.” (Daisy Fang, IP Engineer, Airsys)
• “[T]here used to be strategy of filing both and obtaining a uQlity model first….But we rarely consider this because over 95% of our patents are invenQons.” (Wang Qi, China Resources Electronics)
• Source: Managing Intellectual Property, China In-‐House Survey at 50-‐51 (November 2010).
40
Page 41
• Stay due to invalidation proceedings does not count against the clock. • Foreign parties are not subject to the general time period.
More Special Situation Special Situation General
Period Trial Type
+ 6 months + 6 months 6 months 3 months
First Instance Ordinary Procedure Simple Procedure
No limit + 3 months 3 months 30 days
Appeal Appeal of verdict Appeal of ruling
Source: Jones Day
What Does the Future Hold?
0
10
20
30
40
50
60
Primary School Junior High High School Technical School Undergraduate Masters Degree/Higher
Tendencies to Buy Pirated Goods (%)
0
10
20
30
40
50
60
70
Percen
tage
Tendency to buy pirated goods
0
5
10
15
20
25
30
35
40
45
18-‐29 year olds
30-‐39 year olds
40-‐49 year olds
50-‐59 year olds
60-‐70 year olds
Tendencies to buy pirated goods (%)
Third Plenum Language • Original: “Implement the NaQonal IP Strategy and Strengthen IP ProtecQon.”(“实施知识产权战略，加强知识产权保护”).
• Proposed change: “Deepen the NaQonal IP Strategy, Strengthen the PracQcal ProtecQon of IP.” (“深入实施知识产权战略，切实加强知识产权保护”).
• Final: “Strengthen the UQlizaQon and ProtecQon of IP, InvesQgate Establishing a Specialized IP Court” (“加 强知识产权的运用和保护，探索建立知识产权法院”). – Since this Qme – specialized IP intermediate court project launched.
– AML invesQgaQons on licensing, drop in increase rate of UMP’s…
Improving Patent Quality by Patent Type
(‘02-‐’08): Effect of “Bayh-‐Dole”? University Patent Applications Invention Patent % Enterprise Patent Applications Invention Patent %
Tsinghua 4977 91.31% Huawei 23585 95.91%
Zhejiang U. 4284 79.73 ZTE 14747 93.2
Shanghai 3079 96.85 BYD 3997 40.24Jiaotong
Peking U. 2202 90.97 Haier 2999 47.29
U. of Electron. Technology 1989 82.82 Lenovo 2358 73.18
Southeastern U. 1946 76.63 Haisense 2092 30.6
Fudan U. 1717 86.58 Midea 1934 14.72
Huazhong S&T 1499 76.37 Tencent 1649 100
Haerbin Ind. U. 1416 91.52 Datang 1615 94.8
Xi’an Jiaotong 1284 92.55 Vimicro 1497 92.52
47
Licensing Revenues – China
Licensing Revenues -‐ Japan
• E.g., exclusive license for Palace, most popular Chinese TV series in 2011 cost $300k per episode, vs. $1.5k per episode in 2009 for most popular show Latent
• By 2011,Tudou spent nearly $50 million on content licenses
• In 2011 content acquisition accounted for nearly 40% of Youku’s total expenditures
• Video sites now license exclusive rights to others at highly inflated prices
Copyright Licensing Bubbles
Explanations1. Concerned about copyright litigation/damages/
injunction 2. Responding to increased pressure from Chinese
authorities/reputational costs 3. Loss of advertising revenue4. Burnish reputations with US investors ahead of
planned US IPOs 5. Hope to develop on-demand and subscription
services as new revenue-generating services 6. Desiring to gain a positive reputation from
offensive copyright litigation
The future of cooperaQon -‐-‐-‐ China as an IP Stakeholder …The criQcal importance of cooperaQon was underscored by Commissioner Tian himself a day earlier at the Renmin University Judicial Conference, when he noted that the USPTO and SIPO now account for approximately 50 percent of all patent applicaQons in the world. From USPTO’s perspecQve, as we together carry such a large share of global patent applicaQons, we need to both be fully commided to the global IP system. We may not always agree on policies and strategies, but having another partner emerge who is commided to the development of the global IP system is a welcome development. … hdp://www.uspto.gov/blog/director/entry/china_as_an_ip_stakeholder
China Goes Abroad: Growth in USPTO UQlity Patent ApplicaQons Since 2000
54
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Num
ber o
f app
licaK
ons
Year
China Other Emerging
The growth of UPTO uQlity patent applicaQons from China by technology area, 2000-‐2011
55
0%
500%
1000%
1500%
2000%
2500%
3000%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Percen
t increase since 20
00
Year of applicaKon
BIO CHEM COMP SEMI TRANS MECH
Comparing technology-‐adjusted allowance rates of disposed applicaQons, 2000-‐2010
56
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Allowan
ce ra
te
Year
China Japan/S. Korea Other Emerging
Note : Other emerging economies include ArgenQna, Brazil, Mexico, India, Indonesia, Turkey, Russia, and South Africa.
57
Match the Agencies (MulQple Answers May Apply)
• 1. Handles Chinese IPR Issues at WTO • 2. Trademark Office of China • 3. Patent Office of China • 4. Handles IPR Interagency CoordinaQon • 5. Handles Civil IPR Cases • 6. Prosecutes Cases, Supervises Agencies • 7. Ministry of JusQce • 8. AdministraQon for Quality Supervision, InspecQon
and QuaranQne • 9. Press and PublicaQons AdministraQon • 10. NaQonal Copyright AdministraQon • 11. Handles AnQmonopoly Cases Involving IPR • 12. Handles Trade Secret Maders • 13. Handles IPR Issues at WIPO • 14. ConsQtuent AnQmonoply Enforcement Agency • 15. In Charge of Compulsory Licensing • 16. Content Enforcers • 17. Urban Management Bureau • 18. Appellate NaQonal Specialized IP Court, like CAFC
• A. State Intellectual Property Office • B. Supreme People’s Court, AnQtrust Tribunal • C. State AdministraQon for Industry and Commerce • D. Ministry of Commerce • E. NaQonal Dev’t and Reform Commission • F. Supreme People’s Procuratorate • G. Supreme People’s Court, IPR Tribunal • H. Supervises the Court, Prosecutes Cases • I. One of the senior agencies to the copyright
administraQon. • J. Smallest IP Rights Agency • K. Enforces Against DefecQve Goods • L. Largely Irrelevant to IPR Enf. • M. Does Not Exist • N. Generally no longer enforcing directly • O. Licenses Lawyers and Is In Charge of Prisons • P. Are You Kidding, There is Such an Agency? • Q. Handles Standards Issues • R. Seizes counterfeit goods in violaQon of zoning. S.
SARFT, GAPP, NAPP, Ministry of Culture • S. Doesn’t Exist
58
Answers • 1 – D • 2 – C • 3 – A • 4 – D, A • 5 – G • 6 – F • 7 – L, O • 8 – K, Q • 9 – I • 10 – J, N • 11 – A, C, D, E, G • 12 – C • 13 – A • 14-‐ C, D, E • 15 – A • 16-‐S • 17-‐R • 18-‐S