The Beijing IP Court has published a report on patent litigation statistics since its establishment in November 2014. The headline figure is an amazingly high winning rate for plaintiffs, which should send a positive message to both Chinese and foreign rights holders who wish to enforce patents in the court.
A total of 1,813 patent cases were conducted and closed by the Beijing IP Court from its November 2014 founding to June this year. That includes 682 civil patent cases and 1,131 administrative patent cases.
In civil cases, the court handed down a total of 142 judgments, 116 of which went the way of the plaintiff. That makes the winning rate for patent owners around 82%. Chinese plaintiffs chalked up 106 wins in the 129 cases they brought (a winning rate of 82%), while foreign parties notched victories in 10 out of 13 suits they filed (a winning rate of 77%). Previous studies of Chinese patent litigation have found foreign parties performing at least as well as domestic ones, and these numbers confirm that Chinese and non-Chinese rights owners are getting broadly similar results in the Beijing IP Court.
Damages figures showed that awards jumped in the Court’s second year and have since levelled off. The average damage award in 2015 was 350,000 RMB – that number climbed up to around 1 million RMB in 2016 and then ticked up to 1.1 million RMB in 2017’s first half. Based on the numbers, it’s fair to make an assumption that judges at the court are fairly consistent and predictable in giving awards. The low damage amount from the first year may be accounted for by the fact that cases the court was able to rule on within its first year would have been those that are less technically complex.
Foreign parties outperformed Chinese ones when it came to damages. Foreign plaintiffs earned an average of 1 million RMB, compared to 750,000 RMB for Chinese plaintiffs. One potential explanation is that most every foreign plaintiff in China is going to be a multinational company, with plenty of resources at its disposal. When it comes to Chinese plaintiffs, a surprising one-third were individual inventors.
Another likely reason for the disparity in damage amounts is that foreign plaintiffs overwhelmingly enforced invention patents, while Chinese patent owners asserted a mix of invention, utility and design rights. Design patents accounted for 52% of all the assertions by Chinese parties, while utility model patents made up another 19%. Foreign companies asserted invention patents 76% of the time, and designs 22 % of the time.
The report shows that the plaintiff winning rate in utility patent cases was just 39%, a far cry from the overall figure. But while it may be harder to enforce utility patent rights, that doesn’t mean they don’t have value. First of all, 40% is not all that bad of a winning rate by global standards; and utility model owners who do win are entitled to an injunction in China, just like invention patent owners. Second, utility model patents are much cheaper and easier to get compared to full invention patents. Patent owners should do a careful cost-benefit analysis of these rights.