Archive | 2010, June | (3) posts

China to drive on to the Patent Prosecution Highway

According to a USPTO press release, the intellectual property offices of China (SIPO) and USA (USPTO) have signed a Memorandum of Understanding on 19 May 2010, which includes establishing a bilateral Patent Prosecution Highway (PPH) agreement between the two offices.

The PPH agreement will be SIPO’s first, thus driving China onto the Patent Prosecution Highway and opening up for the SIPO and the USPTO taking advantage of each other’s examination results to achieve a faster prosecution of patent applications.

Further new PPH-agreements
Furthermore, four new PPH-agreements have been established in 2010 so far, namely between Finland (NBPR) and South Korea (KIPO), NBPR and Hungary (HPO), Germany (DPMA) and KIPO (to take effect on 1 July 2010) and, most notably, between the EPO and Japan (JPO).

Thus, the complete overview of existing and working PPH agreements at the time of writing can be seen on the graphic below, courtesy of the PPH web-page compiled by the Japanese Patent Office, JPO:


PPH-web page 

USPTO press release


Troels Peter Rørdam, Associate Patent Attorney

Software piracy in China declining

survey released by the State IP Office reveals that the percentage of pirated software installed on Chinese computers decreases for the fifth year in succession:

  • 2005: 66 %
  • 2006: 63 %
  • 2007: 56 %
  • 2008: 47 %
  • 2009: 45 %

The survey was based on 4,700 telephone interviews with consumers and business users carried out by Chinalabs.com. They estimate the 2009 value of the copied software to be 130 billion yuan.

A decline in copying is noted by the Business Software Alliance (BSA) too, although they arrive at the figure 80 %, down from 82 % last year and 86 % in 2005. BSA’s method is to predict the cost for supplying a country with legal software (yes, the model for this is very complex) and compare it with the value of the actual, paid-for software market. Measured on this scale, copied software installed in Denmark and Sweden amounts to 25 %. The USA is top of BSA’s list, at a mere 20 %.

Experts explain the decrease by a combination of the following:

  • Commercial suppliers, including Microsoft Corp., have lowered their prices in China specifically.
  • Legitimate free office programs and operating systems are improving and spreading.
  • By law, manufacturers may only install genuine operating systems in made-in-China computers. This entered into force in 2006.
  • The Chinese authorities are getting better at enforcing IP.

Other plausible factors are the emergence of domestic software suppliers and the rising IP awareness in China noted by many observers.

What is BSA anyway? It’s a non-profit trade organisation having as its mission to promote a safe and legal digital world. BSA was behind the 2008 lawsuit that put an end to the infamous Tomato Garden website. People downloaded not only unlicensed copies of commercial products, but also “improved” versions of MS Windows and others. Both are illegal under the copyright laws of China and virtually any country in the world, and both could be stopped.

Surely, you know that your software enjoys copyright protection from the moment you write it. But don’t forget – the successful action against the Tomato Garden was meticulously prepared as far as preservation of evidence was concerned. In order for your company to be ready to fight piracy the day it happens, there are a few measures to take. My colleagues and I will be glad to assist you.

Anders Hansson, Patent Attorney

IP in China? It’s not all bad

Recent statistics on the outcomes of reported IP litigations in the most important courts in China are encouraging:

The total number of trademark-related cases in 2009 handled by the Chinese courts was 6,906, up almost 11 per cent from 2008. 2008 was up by 79 per cent in relation to 2007.

Administratively, the numbers are on an equally steep climb. In 2009 there were an impressive 37,002 cases handled by the Chinese Intellectual Property Office (SIPO). This follows a substantial injection of funds whereby the backlog of cases has been reduced from a good 11-13 years to 1-1½ years. There is no question that there is still room for improvement. Still, seen from my point of view it is a dramatic improvement and one that promises well for the future. A backlog of 1-1½ years is better than what we encounter in many countries.

It is important to remember that these statistics relate just to reported cases, so they may not tell the whole picture. In fact, if anything, they may underplay the extent to which foreign parties are successful.

There is, however, one overshadowing problem: enforcement. It has been hard to get favourable decisions enforced. This also means that decisions do not act as a deterrent.

In the past year China has had more than its share of embarrassing – and in some cases fatal – domestic cases, especially when it comes to drugs and additives. We remember the counterfeit diabetes medicine, the blood thinner Heparin to which an unlawful and dangerous chemical was added, and – not the least – the scandal about powdered baby milk where Melamine had been added. These cases originated in China and the victims were also Chinese; in a very unpleasant way they stress the fact that trademark abuse and counterfeit products are not just belts, sunglasses and watches.

There is hardly a question that consumerism in China is on the rise and that this will equally reflect on IP. China is no longer just a provider of cheap labour and cheap goods to consumers in the West; China is a nation of increasingly demanding consumers – and the counterfeit cases to match will follow in the foot paths of the consumers.

So where does this leave us for the moment? Well, the statistics are very persuasive: China has allocated more resources to the IP authorities. One can hope that the sad drug piracy cases will also ensure that enforcement will get equal attention.

Thorbjørn Swanstrøm, Attorney at Law, Awapatent

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