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Why Foreign Companies should Undertake Patent Lawsuits in China

According to the Wall Street Journal, China has become an ideal place to the foreign companies for patent litigation. Canadian intellectual property licensing firm WiLAN filed a patent infringement lawsuit against Japan-based electronics developer Sony Corp in the court of the eastern Chinese city of Nanjing.

This entire incident points out to the reality that the United States is no more the choice of venue for the foreign companies for resolving patent related matters. Two foreign companies are fighting out patent dispute in a Chinese court bears a huge significance and shows the strength of the consumer market of China.

Patent Lawsuit in China
The number of civil intellectual property suits accepted for hearing and concluded on first instance in China (2006-2016) | Source: Cheng Yongshun’s presentation

Let’s check out the reasons why China is becoming a good venue for patents litigation-

Patent lawsuits in China are less time-consuming and less costly than in the U.S.:

The most important aspects of undertaking a patent lawsuit in China is the entire case moves swiftly with a relatively quick verdict. If you are fighting a patent case in China it will cost you less than half compared to fighting the case in the United States. According to the China lawyers, companies that don’t have superior financial power can easily engage in any sort of patent-related lawsuit in China without caring about money. China has a strong and structured innovation protection law than the United States, This Asian country takes proper care in protecting the rights of the innovators.

Greater number of courts and organized judicial system:

China has Basic, Intermediate and Higher People’s Courts, in addition to the Supreme People’s Court. Until the end of 2014, there were 32 Higher People’s Courts with jurisdiction over patent cases. The existence of this large number courts makes it simple to undertake patent related cases and getting a swift verdict. Monetary and injunctive remedies are both available for patent cases in China. The judges of the specialized IP courts of China are competent in intellectual property matters, both factually and legally.

Winning an IP case in China is equivalent to winning a case in the International court:

The remarkable significance of winning an IP lawsuit case in China is that the verdict stands legal in any part of the world. Here is an example to make you understand this entire thing in a simple way.

“Jack manufactures J-Shoes in China and he is the original IP holder of J-Shoes and his competitor Jill also makes shoes in China with a name JJ-Shoes. If Jack’s company makes shoes at the most competitive cost in China and if he prevails on an IP lawsuit case against Jill in a Chinese court, then Jack can completely block JJ-Shoes from the worldwide market.”

That’s why China lawyers encourage their foreign clients to register their trademarks and their patents in China. Before someone else banish them from manufacturing in China, companies can remain secure by registering their trademarks in China.

Over the years, China has been making a significant effort to increase intellectual property protection by streamlining its judiciary system and making it more transparent.

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