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It isn’t news to anyone that China—as the world’s largest exporter of manufactured goods and second largest economy—is a crucial market for businesses hoping to compete globally. And while China has traditionally gotten a bad rap for failing to respect or protect intellectual property, many legal experts agree that this reputation is decidedly outdated. In fact, the current Chinese business environment is increasingly patent friendly, and the prevailing opinion in Chinese legal circles is that there has never been a better time for international businesses to apply for Chinese patents.  We consulted Carr & Ferrell’s Chinese associates, who gave us the top reasons why this is the case.

1. Improved Enforcement 

In the hope of attracting more foreign investment, the Chinese government is actively working to make its legal system pro-patent.  As a result, the enforcement environment in the country has improved, which means that owning Chinese patents is now worthwhile. Changes to the patent system have resulted in a modern China where

• all patent cases are handled by dedicated tribunals consisting of judges who are highly experienced in trying such cases.
• rules governing patent cases are increasingly transparent and predictable, following the Judicial Interpretations issued by the Supreme Court of China in 2010.
• damages awarded by the courts have substantially increased in recent years, and it is possible for the plaintiff to recover legal costs from the defendant.

As a result of these measures, there were over 5000 patent infringement cases filed in 2010 in China.

2.  Greater Licensing Opportunities

Thanks to improved enforcement, Chinese companies have a greater awareness of and respect for patents.  As such, there are more and more platforms through which potential licensees can be sought, as evidenced by the rapid growth in the number of patent license agreements recorded by the Chinese Patent Office.  

3.  Better Representation Available

Also due to the improved credibility to Chinese patents, an infrastructure has developed to support entrepreneurs that secure them.  Today, there are patent trust companies in China that will enable you earn money from your patent by helping you maintain the patent, find potential licensees or buyers for your patent, or use the patent to "buy in" to a Chinese corporation.  

4.  As Patents Become the Norm in China, Don’t Get Left Behind  

As China issues more and more patent applications, international companies who fail to protect their technology increasingly run the risk of being sued by their Chinese competitors for infringement.  

Details

The average pendency for Chinese patents is 25 months from the request for substantive exam for an invention patent. It's about 6 months for a utility model (which is a patent for a "small" invention, with only structural features—used only to protect the product, not the process.  Utility model patents expire 10 years after grant).  The average pendency for a design is also about 6 months.