The Beijing Intellectual Property Institute, which is run by former Judge Cheng Yongshun (www.bipi.org)  reports the following data on the Beijing IP litigation for the first half of 2012:

Beijing courts dealt with 4795 cases of intellectual property rights, a decrease of  6.88%. Copyright cases were down by 50.43% to 1,995.  Patent cases numbered 566 including 406 validity cases on appeal from SIPO, with year-on-year growth of 10.33%.  Trademark cases numbered 1916, including pieces 1313 validity cases on appeal from the TRAB/ SAIC, showing year-on-year growth of 42.35%.   Unfair competition cases numbered 65, a reduction of 4.41% year-on-year and technology contract cases numbered 94, showing a year-on-year growth of 56.67%.

Over the same period, Beijing courts of second instance dealt with 1088 cases of intellectual property rights, a reduction of 21.95% year-on-year.  Copyright showed a drop of 23.26%, while patent cases showed the smallest drop at 15.02% year-on-year.  Unfair competition cases (including trade secrets) numbered 14 cases, a reduction of 26.33% year-on-year.

What is the potential back story to the data?   The drop in copyright litigation comes after years of meteoric growth throughout China.  It could be a sign that other rights, such as patents are once again assuming a relatively higher priority.  Beijing also had a high percentage of internet-related copyright cases, and perhaps the development of more copyright-protective business models for larger Chinese internet companies is contributing to these changes.  Prof. Eric Priest from the University of Oregon gave a helpful presentation at a recent program in Berkeley on the increase in licensing fees that Chinese internet companies are now paying to obtain legitimate content (http://www.law.berkeley.edu/13961.htm).

Trademark validity cases continue to show rapid growth, due to the growth in trademark filings and, perhaps, the likelihood of reversing the Chinese trademark office (TRAB).    By contrast, the reversal rates of SIPO had been very low, despite rapid growth in patent filings, which had contributed to declines in appeals of SIPO (PRB) decisions in recent years and a relatively slower rate of growth.

The declining/low percentage of unfair competition cases, which include trade secret cases, may reflect problems in prosecuting rights on those areas – but more data is needed.

This data set did not however include the numbers of foreign-related cases.   Shanghai court data however reveals that United States-related cases in Shanghai dropped from 51 to 37 cases from 2010-2011, and total foreign-related cases dropped from in 2011 from 229 to 214.   These are modest drops which also reflect the trend of relatively low growth in foreign-related IPR litigation throughout China.

As my above analysis indicates, with so much growth in IP filings and litigation in China in recent years, any decline is noticeable and could reflect other trends in the IP system.  There are several such counter-cyclical trends suggested by recent data which are worth following.