China’s Future Knowledge Economy to lead to more litigation abroad by Chinese patentees

One of the aims of the State Intellectual Property Office’s recently issued National Patent Development Strategy (2011-2020) (Strategy) is to ensure that China has a robust knowledge economy by the year 2020, writes George Chan of Rouse China.

The development of a robust knowledge economy will require, among other things, an increase in Chinese companies’ foreign patent filings. The Strategy states that Chinese patentees will be expected to double the number of overseas patent applications by 2015, and quadruple them by 2020.

On the basis of figures for 2010, when approximately 13,000 PCT applications were filed by Chinese applicants, this would mean that by 2015 more than 26,000 PCT applications would be filed by Chinese applicants and by 2020, more than 52,000.

There are also indications in the Strategy that Chinese patent owners will be encouraged to enforce their patents abroad. Currently this occurs rarely. When Netac Technology, a Shenzhen-based flash drive manufacturer, sued Texas-based PNY Technologies for patent infringement in 2006, the case was noteworthy: cases that usually grab the headlines concern infringement by Chinese companies, rather than enforcement.

The Strategy aims to encourage Chinese patent owners to enforce their rights abroad. It proposes the establishment of an overseas IPR protection information network that would provide updated information relating to foreign patent protection and professional guidance in relation to dealing with overseas patent disputes.

Given that Chinese patentees have been very proactive in enforcing their patent rights in China (according to data provided by the Supreme People’s Court, China has been the most patent-litigious country in the world since 2005), litigation involving Chinese-owned foreign patents in other countries is likely to increase significantly.

China’s rise in the ranks of developed countries may, ultimately, prove to be a boon to patent professionals worldwide.