Monday, April 14, 2008

"If you can afford a car, you can afford a[n IP] lawsuit"


So says Tony Chen of Jones Day's Shanghai office in a recent Economist article, 850,000 lawsuits in the making. Back in an October of 2007 post Dan Harris at China Law Blog shared the following "old adage" with his readers:
[I]f there is one lawyer in town, the lawyer will starve, but if there are two lawyers, both will prosper.
The adage was in reference to the argument that China needs more lawyers to help improve the IPR situation. The Economist article has a data set, reproduced in their graph to the left, which shows that China's patent grants have increased with an increase in the number of IP litigation cases. This suggests that innovators are more comfortable with IP protection and are more willing to protect their IP as lawsuits prove that IP can be protected.

The reasons cited by the article for the "warm[ing] to intellectual property" include:
  • The beginning of enforcement of patent laws in 2001 as part of promises for WTO admission.
  • The opening of "more than 50 courts that deal solely with intellectual-property cases."
  • "[T]he cost of bringing a case is minimal."
  • Unlike in the US where there is lots of settlement to avoid legal fees, in China "a judge rules in the majority of cases and damages tend to be small. They normally cover legal costs, however, turning lawsuits into a self-funding method to battle piracy."
It is interesting to see low damages cited as furthering IP protection.

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