The End of Year Hook in Administrative Patent Enforcement?

Along with Prof. Zhen Lei of Penn State, I have previously blogged about the late autumn surge in patent filings in China, in 2012, as well as in prior years.  This autumnal hook likely arises in response to subsidies, quotas or other support that must be exhausted before year end.

During a recent visit to China, I had an opportunity to talk about similar trends in patent administrative enforcement.   For the past two years, there appears to be a year-end uptake in patent enforcement:

  Infringement Disputes Other Disputes Patent Passing-off Total
2004 1414 66 1689 3169
2005 1360 132 2409 3901
2006 1227 43 966 2236
2007 986 27 713 1726
2008 986 27 713 1726
2009 937 26 578 1541
2010 1077 18 728 1823
2011 1286 27 1704 3017
2012 2225 268 6512 9005
2013 (mid-year) 1074 129 2633 3836

Here is what it looks like in graph form, with data ending at September 2013, on an annualized basis the totals would be 19,118:

Image

Why has there been such a sudden uptake in year-end administrative enforcement?  One explanation is an end of year rush to accept or resolve cases to show increased efficiency and impact.  On the converse side, the data also shows a significant drop in activity around holiday seasons, especially spring festival in January/February.    These factors may apply across the board to many forms of Chinese government activity.

Looking to policy factors, on June 28, 2011, SIPO announced a special campaign involving patent administrative patent enforcement.   However, the campaign did not immediately result in a significant uptake in administrative actions.

What may be more significant is the  August 2012 publication by SIPO of proposed patent law amendments, which provide for an expansion for administrative enforcement and greater involvement by SIPO with IPR as an instrument for “market order”.  These new policies may have precipitated a major uptake in administrative patent enforcement actions, on the assumption that “if you enforce it, they will legislate it”.  In fact, October 2012 was one period of high rapid increase – with enforcement actions increasing 112% from September 2012, followed by a drop in November 2012.

The rapid increase in patent “passing off” (counterfeit patent) cases similarly may also be timed with the patent law amendments.  The amendments contemplate an increased role for SIPO in policing “market order”. Since such cases may be initiated by self -initiated by parties other than the infringer, they may also be more responsive to policy changes by SIPO.  Local governments, such as Guangzhou, may also offer rewards for reporting these activities.  Moreover, the change in the mix of administrative enforcement actions is striking.  From 2006 to 2011 infringement cases dominated. Now patent passing off cases are approximately twice infringement cases.

There may be other factors contributing to this rapid increase, such as enhanced authority of local enforcement agencies.  In addition newly empowered agencies may now be engaged in rent-seeking behavior, such as by seeking revenue from filing fees. Indeed, Premier Li Keqiang identified excessive fee taking as a potential issue in IP administrative enforcement (http://www.gov.cn/ldhd/2013-11/20/content_2531230.htm).

One comparison that does not appear highly relevant is with overseas trends.  An influential article by Zhao Meisheng of SIPO Management Division Enforcement Administration Department  “An Analysis on the Trend and Reasons That US Government Agencies Strengthen Intellectual Property Rights Enforcement” ( 试析美国政府机构加强知识产权执法的态势与原因 – 赵梅生 (国家知识产权局管理司执法管理处)电子知识产权 (Electronics Intellectual Property) (2013, 4)  suggested that administrative patent enforcement is on the increase globally, including the United States.   Comparing “civil” or “administrative” actions in one country to another is often an “apples to oranges” type comparison, nonetheless, “Section 337” actions in the United States, which involve US administrative procedures, are only a very small fraction of Chinese patent administrative enforcement actions, and have been relatively constant over the past several years.
chart3

The growth in administrative litigation does not seem to be linked either with Chinese domestic IP litigation, which has shown steady growth over the past several years.
chart5

(The preceding was adapted from a presentation I gave at the recent Asia Pacific IP Forum sponsored by Renmin University in Suzhou.  The opinions in this blog are my own).

5 thoughts on “The End of Year Hook in Administrative Patent Enforcement?

  1. Thomas F. Cotter says:

    This is really interesting, but I’m confused by the discrepancy between the numbers cited above, which I understand come from SIPO, and those reported by the SPC in its April 2013 white paper, which says there were 760 first-instance administrative patent cases accepted in 2012. I’m tempted to think the difference is that one sources includes utility model and design patent cases as patent cases, while the other doesn’t, but I actually don’t think that is right. Or does the word “accepted” have some significance that I don’t understand? What am I missing?

    Also, are the administrative cases involving patent passing off all criminal cases, or are some of them litigated as civil matters?

    Finally, the SPC reports 9,680 civil first-instance patent cases in 2012 (court cases, not administrative). Do you know if that is infringement litigation only or does it also include patent passing off?

    • chinaipr2 says:

      These numbers are for patent administrative enforcement cases. The SPC numbers reflect appeals of administrative IP cases, the vast majority of which are cases challenged the decisions to grant or deny a patent or trademark right. While patent admin enforcement cases can be challenged in a court too, the rapid increase I reported on is without reference to their judicial appeals. What was interesting to me was the rapid escalation of enforcement in advance of proposed new legislation. Counterfeit patent cases/patent passing off are a bit like false marking in the US. In ant event they are not, as far as I know a major cause for civil litigation, but are a subject of administrative regulation. I hope this helps. Mark

      • Thomas F. Cotter says:

        Thank you, that’s very helpful. Just to follow up, then, when the SPC says there were 9,680 civil patent cases in 2012, that’s probably mostly infringement litigation, then, right? That’s a huge number, though of course it includes not just patents but also utility models and design patents.
        By the way, are you Mark Cohen? I saw a reference in China Patents & Trademarks to a presentation you gave titled “Future of IP Rights in China: Copyright and Patent Right” at the International Symposium on New Developments in IP Rights in China held at the University of California at Berkeley on October 4, 2012. Is there any chance I could get a copy of this?

  2. chinaipr2 says:

    Civil cases in China refer to disputes between private parties over civil obligations. Administrative cases involve disputes with administrative agencies. In China all validity cases (appeals from decisions to grant or deny a patent or trademark) are administrative cases when they are appealed to the court. They are typically (traditionally) heard by the administrative division in the court, according to the administrative procedure law. Infringement cases are typically heard by the civil division, according to the civil procedure law. There have been experiments.in combining civil, and/or criminal and/or administrative jurisdiction in one combined “IPR Tribunal” in various localities in China.

    Yes I am Mark Cohen, and this is my personal blog. I haven’t gotten around to posting some of my powerpoints – I hope to at some time in the future. I think Berkeley has posted some of my past powerpoints.

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