Category Archives: China IPR

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Forthcoming Speaking Gigs

UNLVpostcard

The fall promises many opportunities to talk and exchange ideas on Chinese IP matters.  Here are a few of the upcoming speaking events that I will be speaking at:

On October 4, 2018, I will be speaking at the University of Nevada Las Vegas program on “Intellectual Property Rights Enforcement at Trade Fairs”.   USPTO Director Iancu will be keynoting, and I will also be joining my former USPTO colleague Conrad Wong at the event.  The seminar will be a great showcase for UNLV Prof. Marketa Trimble’s recent research on enforcement of intellectual property at trade fairs.  I am also looking forward to engaging with my fellow blogger, Prof. Thomas Cotter, who will be moderating my session.

Trade fairs, due to their short duration, their exhibition of leading edge technology, and their potential to disrupt customer and market patterns present unique challenges.  I have  followed China and US enforcement of IP at trade fairs on my blog, as well as when I was IP Attache in Beijing.   As IP Attaché, I helping a US company,  ABRO Industries of South Bend, Indiana, which detected extensive counterfeiting of its product at the Canton Trade Fair by a company called Hunan Magic.  At that time, about 10 years ago, there was a hope that judicial enforcement of IP at trade fairs in China might offer an opportunity to mitigate local protectionism in the court system by providing a judicial venue that is not where a trade fair exhibitor may have its principal place of business.  Several years later, I heard  Chinese companies were also complaining about US trade fair enforcement, and the US and China entered into a bilateral JCCT commitment on this topic.  The use of civil remedies to address trade fair infringements also implicates China’s rare use of preliminary injunctions, which has also been discussed here.

On October 9, 2018, Berkeley Law will be co-hosting the 12th Annual China Town Hall sponsored by the National Committee on US-China Relations, with former Secretary of State Condoleeza Rice joining the discussions being held virtually nation-wide. I will be joined by my colleagues Berkeley (Profs. Merges and Aggarwal) and the Asia Society of Northern California in the local discussions at UC Berkeley Law School.

On November 2, 2018,  I will be returning to John Marshall Law School to moderate a session on Global Issues in IP for its 62nd Annual IP Conference.

On November 6-8, 2018, I will be speaking at the 5th Annual IP Dealmakers Forum in New York City on “China – Has It Been a Boon for IP Licensing and Enforcement”.  I will also be giving talks at the U.S.-Asia Law Institute of NYU on November 12 and at Columbia Law School on November 13.

On December 1, 2018, I will be speaking in Shenzhen at the first joint Peking University/Transnational Law School / Berkeley Law program on “Entity Formation & Funding: Legal Fundamentals for Startups.”

On December 2, 2018,  I will be speaking in Shanghai at IPBC Asia’s conference on Maximizing  IP Value in Asia, where I will be addressing China’s licensing and enforcement environment.

On December 3-4, 2018, I will be speaking at Tsinghua Law School in Beijing at the first joint Berkeley/Tsinghua program on “Transnational IP Litigation.”  This program promises to have a solid line-up of academics, judges, officials and practitioners.  It is also a topic I have followed extensively here, and previously spoken on at Berkeley.

Note that some of the academic programs are not yet listed on sponsor websites, please reach out to the sponsors or organizers for further information.

Mark Cohen

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USPTO Position Opens in Shanghai

The USPTO and US Foreign and Commercial Service have posted a notice to fill the position of IP Attaché at the US Consulate in Shanghai.   The position is open now for applications and closes September 14, 2018.  The position requires US citizenship, bar admission, at least four years of professional legal experience and at least one year of specialized experience (consisting in part of knowledge of international IP practices).  Although knowledge of Chinese language or experience in Chinese IP matters do not appear to be specific requirements for the position, a separate questionnaire as part of the application process asks for experience in these areas.  USPTO had also recently posted for another position: Senior Counsel, China in Washington, DC.

The current official holding the Shanghai position is Mike Mangelson, who has been there since 2014.  He will be missed when his term is up.

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A Potpourri of AIPLA Legislative Comments — And Other Developments

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The American Intellectual Property Law Association has once again made its comments on proposed changes to Chinese IP legislation (laws, regulations, rules, examination guidelines,  judicial interpretations, etc. ) available to this blog.

Attached are the AIPLA’s response to the request for comments to revision of the trademark law in China (商标法修改公开征集意见) first published by SAIC.  SAIC is now a part of SAMR – the State Administration for Market Regulation. It had published a public solicitation of ideas for revising the trademark law on April 2, 2018, with a due date for comments of July 31, 2018.  AIPLA’s comments primarily focus on providing clarifying and strengthening legislation regarding bad faith trademark applications and registrations.

AIPLA has also commented on the proposed patent validity rules  of the SPC on administrative patent litigation (最高人民法院关于审理专利授权 确权行政案件若干问题的规定(公开征求意见稿)).  This judicial interpretation was previously discussed in this blog, with a translation by the Anjie law firm.  Additionally, here  is the Chinese version of these comments.

Finally, AIPLA has commented on the special approval procedure for innovative medica devices (创新医疗设备特别批准程序（修订稿)) which was first published for public comment on May 7, with a closing date of June 15.   Here is a text of the draft approval procedures in Chinese.

In a related legislative development, the recent dismissal of party secretary Bi Jinquan of the SAMR due the tainted vaccine scandal may also impact reforms that BI had spearheaded, which included pharma-related IP reforms (patent linkage, regulatory data protection, etc).   Commissioner Bi formerly served as the leader of China’s Food and Drug Administration.  An August 20, 2018 notice of the State Council  (no. 83) on deepening reform in China’s medical sector ominously omits any mention of patents or IP reform.  国务院办公厅关于印发深化医药卫生体制改革2018年下半年重点工作任务的通知, (国办发〔2018〕83号.  The next place where we might see the continued life in these reforms is in the proposed revisions to China’s patent law, which the National People’s Congress had tabled for completion by the end of 2018 as noted in its 2018 workplan  (全国人大常委会2018年工作要点).  A first draft of the revised patent law is needed as early as late August/early September 2018 in order to meet the NPC’s deadline.  One much anticipated pharma-related concern in the new draft, which would also support China’s efforts to develop both an innovative and high quality pharma sector, is incorporation of “artificial infringement” by which a request for regulatory approval would be deemed an infringing act in order to support a patent linkage regime.

 

Note: The above photo by Unknown Author is licensed under CC BY-NC-ND

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“Dying to Survive” and Pharmaceutical IP Reform in China

Last week while in Beijing, I finally had the opportunity to see “Dying to Survive” (Chinese title: “我不是药神”[translation: I am not the god of medicines]), the hit Chinese movie which concerns the problem of high priced cancer medicines that were not available through insurance on the Chinese market and had also been subject to patent validity and infringement disputes.  The screening I saw was filmed in Mandarin and subtitled in English.  When it opened in China, the movie was the second highest grossing movie in the world, and it is now on track to gross over 3 billion RMB.

The cancer medicine that is the focus of the movie is Imatinib Mesylate (Gleevec/Glivec), which was marketed by Novartis and is used to treat Leukemia.  The protagonist, Cheng Yong 程勇, was approached by a leukemia patient to travel to India and supply this person and others with a generic form of Novartis’ Gleevec.  Cheng Yong buys Gleevec for 500 RMB a box, and resells it at a 2,000 RMB, but which is still cheaper than Novartis’ offering (40,000 RMB).

Cheng Yong evolves over time from an unsympathetic trafficker in black market drugs  and possibly substandard medication for local patients to the lifeline of leukemia patients of an effective generic throughout China.  The evolution begins after nearly being arrested for selling counterfeit medicines when he briefly renounces his business in favor of a competitor.  However, he is soon approached by leukemia patients who desperately need his product at a reasonable price. He ultimately subsidizes the sale of Gleevec in China with his own money by distributing the product at cost.  Cheng Yong is thereafter arrested and sentenced.  He is released from jail early after petitioning by patients he has helped.  By contrast, the Novartis anti-counterfeiting investigator’s role remains a one-dimensional villain throughout the movie. The movie closes by noting that Imatinib Mesylate was ultimately made available legally and placed on insurance reimbursement lists and that new laws and regulations have been introduced since the incident described in the film.

The movie is based on an actual incident involving an individual named Lu Yong 陆勇.  The movie also bears some similarity to Dallas Buyers Club, which involved distribution of AIDS medication in the United States.  In real life, generic forms of Gleevec were approved by Chinese regulatory authorities in 2013. The product was also placed into the Chinese insurance reimbursement list in 2017.

The official and public reactions to the film suggest that China is indeed dedicated to both pharmaceutical IP and regulatory reform.  Premier Li Keqiang cited the movie in encouraging accelerated new product introduction and lower drug prices.  A translation by the Anjie law firm of an article by IPHouse on a screening of the film with leading judges, academics and lawyers is attached.   Based on this article and meetings I held in China, I believe that most people thought that the movie’s message was that China needs to continue to engage in a range of legal reforms, including:  accelerating approval of new drugs by China’s National Drug Administration; improving IP protection to encourage innovative drug development; and providing insurance to cover treatments.

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TWO NEW SENIOR CHINA POSITIONS OPEN IN THE US GOVERNMENT

Two senior China-related positions involving, to different degrees, intellectual property have recently opened in the US Government.

A position similar to the one I helped create at the US Patent and Trademark Office is now open.     The incumbent will serve as “Senior Counsel for China Intellectual Property Policy.”  The position closes on August 6, 2018.  Applicants must be US Citizens, graduated from an accredited law school, and be a member of the bar.  PTO is seeking someone who has “Knowledge of a wide variety of international matters, particularly issues related to China IP and civil law matters.”  The introduction of knowledge of “civil law” seems new to me.   The position is also subject to a chain of command of “assist[ing] the Under Secretary of Commerce and Director, Deputy Under Secretary and Deputy Director, Chief Policy Officer and Director for International Affairs of OPIA, the Deputy Chief Policy Officer of OPIA, and others by rendering advisory legal and technical opinions on a wide range of complex China IP issues and sensitive negotiations.”

Another position that has opened is  that of Director,  Center for Interagency Trade, Implementation, Monitoring, and Enforcement (ICTIME) and is responsible for supervising, directing, and implementing initiatives required by Section 604 of the Trade Facilitation and Trade Enforcement Act of 2015.  The position includes overseeing investigations of information for potential disputes brought by USTR to the World Trade Organization (WTO) and developing positions and strategies for implementation and enforcement of U.S. trade rights under international trade agreements for enforcement of domestic trade laws.  This appears to be the Trade Enforcement unit first proposed by President Obama in a State of the Union Address in January 2012:  “It’s not right when another country lets our movies, music, and software be pirated,” Obama said:  “Tonight, I’m announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trade practices in countries like China.”  As a side note, it is interesting to observe how much the focus of USG trade policy has since shifted to technology issues, as indicated by this focus of then-President Obama.  The position closes on July 23, 2018.  This announcement also seeks someone who is capable of the various management competencies of the Senior Executive Service.

Neither position explicitly requires a knowledge of Chinese language, although China is clearly a focus of them both.   Both positions also entail management responsibilities.  The USTR position includes “supervising 20 Trade Enforcement Analysts, detailees, interns, and other employees” while the PTO position involves “serv[ing] as the China team leader”.

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Semiconductor Patent Litigation Part 2: Nationalism, Transparency and Rule of Law

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“The 60-year-old Yin Zhiyi (Gerald Yin) resolutely gave up the US’s annual salary of one million dollars, broke through the layers of US government review, … He led a team of more than 30 people back to China. … At the age of 60, he returned with his brain and founded China AMEC.

He said: We have done a lot of things for foreigners. It is time to make contributions to the people of our own country. He not only returned alone, but also led a team of outstanding Chinese of more than 30 people. It can be said that everyone has their own high-end technology weapons. And this move by him immediately caused the U.S. security department(s) to block him…  All the process and design drawings were completely confiscated.”

In my last blog I noted how semiconductor chip 芯片-related patent cases have a relatively low level of success in China, and that there appear to be wide regional variations in success rates.  Today, I will look at some of the legal issues raised by the emergence of Fujian as a venue for litigating these cases.  We begin by looking at the saga of Advanced Micro-fabrication Equipment, Inc. (AMEC), a semiconductor equipment manufacturer based in Shanghai, of which Gerald Yin, the subject of the above article, is both chairman and CEO.

AMEC has been described by the U.S. government as China’s leading semiconductor equipment manufacturer.    It has also been involved in three high profile IP disputes with US companies since its establishment.  Gerald Yin was a long-timer in Silicon Valley, previously served as a Vice President of Applied materials before joining AMEC, and prior to Applied he was with Lam Research and Intel – a scenario not unlike other Silicon Valley tech employees.  According to an on-line bio, he holds a doctorate in Physical Chemistry from UCLA and is the inventor of 86 US patents and more than 250 foreign patents.  AMEC’s case against Veeco earlier this year appears bears many similarities to the facts noted in the media report of a preliminary injunction decision issued on July 3, 2018 in favor of UMC and Fujian Jinhua’s case against Micron, another American company, also in Fujian province.

AMEC’s Batting Average

The records regarding AMEC’s prior legal challenges are complex and scattered across multiple jurisdictions.  They include court cases, patent filings, patent oppositions and Customs actions. It is frankly beyond the scope of this blog to fully analyze the validity of each claim and counterclaim.  Overall AMEC appears to be enjoying a high win rate.

The reported legal saga begins when Applied Materials sued AMEC in California (2009) for misappropriation of trade secrets that related in part to confidential information he obtained while at that company which were also the subject of patent applications by him.  The case was dismissed in favor of AMEC on the basis that the contract regarding the inventions violated California law against enforceability of non-compete agreements, depriving Applied of any rights to inventions whether or not there had been a misappropriation of confidential information.  Also of note, in 2009, AMEC brought suit against Applied in Shanghai, under the anti-unfair competition law (AUCL), presumably for trade secrets, which was withdrawn on January 1, 2010.  Withdrawn cases permit the parties to refile later as no decision has been reached on the merits and may not be included in official case law databases.

Another case involved AMEC and Lam Research, another Silicon Valley company which was also Gerald Yin’s former employer.  This matter involved patent infringements and was litigated in Taiwan.  By 2012 Lam Research had exhausted its appeals and lost.

AMEC v Veeco

AMEC’s most recent dispute with Veeco, a New York-based competitor with a subsidiary in Shanghai, involved preliminary injunctions for patent infringement in the US against a supplier to AMEC and a preliminary injunction in China against Veeco, as well as Chinese Customs seizure of imported goods of Veeco that infringe Amec’s Chinese patent. Preliminary injunctions in patent cases have historically been quite rare in China.  For example, in 2013, Chinese courts granted 11 preliminary injunction requests out of 90,000 IP cases. According to press reports, the dispute between Veeco and AMEC ended with a global settlement.

The US action was commenced on April 12, 2017 in the Eastern District of New York against one of AMEC’s suppliers, SGL.  Limited discovery was conducted in July and October 2017.  The 76 page opinion of Judge Chen, dated November 2, 2017 and amended November 16, 2017, reviews the challenges to patent validity, the scope of infringement, extraterritorial issues and the balance of equities in issuing a preliminary injunction against SGL (the drawing above is excerpted from her opinion).  Chinese commentary suggests that Judge Chen did not have the benefit of the Chinese validity challenges based on on novelty or non-obviousness.  However, the issues, including an alleged pre-existing “hockey puck” design are discussed at length in Judge Chen’s opinion, and there appears to have been discovery, expert opinion and due process provided (see text at fn. 64 and references to “hockey puck”).

Note that on January 23, 2018, SIPO declared the counterpart patent(s) to those asserted in New York to be invalid.   Of particular concern in the NY litigation was the ‘769 patent, formerly owned by Emcore.  AMEC reportedly launched an invalidity challenge at the USPTO on December 8, 2017 against this patent.  A Chinese author’s description of the global patent challenges is found here.

The second significant decision involved a case initiated by AMEC against Veeco in July 2017. and the Fujian High Court granting an injunction on or about December 7, 2017 (see media reports). This case has not been released to the public.  I have therefore had to rely on various secondary sources of information in order to understand the circumstances of this case.

A Veeco press release states that “On December 7, 2017, without providing notice to Veeco and without hearing Veeco’s position on alleged infringement, the Fujian High Court issued a ruling, applicable in China, that requires Veeco Shanghai to stop importing, making, selling and  offering to sell Veeco EPIK 700 model MOCVD systems which contain the accused infringing synchronous movement engagement mechanism covered by AMEC utility model patent ZL 201220056049.5 and wafer carriers used as supplies for the EPIK 700 MOCVD system.” The circumstantial circumstances seem to support this position.  According to AMEC’s press release, the patent in suit was the subject of two invalidity challenges and was held valid by the Patent Reexamination Board on November 24, 2017.  This was the Friday of the US Thanksgiving holiday.   The patent in suit was a utility model patent, ZL201220056049.5.  Assuming that AMEC moved for a preliminary injunction on the following Monday, November 27, 2017, the injunction would have been issued approximately nine business days later, hardly time for a thorough consideration of infringement issues or the weighing of factors in a preliminary injunction.  The Chinese preliminary injunction case was different from the US case in many respects: notably the US decision was published, involved months of hearings and exchange of documents, and the decision was not issued on an ex parte basis.  I assume it would also be difficult for the Fujian High Court to issue as lengthy a decision as EDNY in light of the limited time it had before it rendered its decision, but we lack the benefit of a published decision in this matter.

AMEC v Veeco also shares other concerns with Chinese countersuits against overseas litigation.   Although this case was filed after Veeco filed its case in the United States, the court seemed intent on accelerating its decision making in order to undercut the effect of a US judgment.  As I have noted, this is typically done without any consideration of comity, and it is a common litigation tactic for a Chinese defendant to seek a quick decision from a court where it has a close relationship to undermine the effectiveness of an overseas litigation or 337 investigation.  It is hard to deny that the Fujian High Court is paying attention to timing when the Fujian High Court apparently drafted its non-public decision in less than two weeks.

There are some other similarities with Chinese anti-foreign suit litigation, including that often these cases also end up getting recognized as a “top 10” /guiding/leading cases  by local or national authorities and the authorities extol how they can help guide Chinese companies to break open foreign markets, thereby adding fuel to a techno-nationalist fire.

Another strategic point is that AMEC’s principle weapon was a Utility Model Patent (UMP), which lasts only 10 years.  The use of utility model patents or design patents to countersue in China is a well-established practice (Chint v Schneider; Chery v General Motors).  One reason may be that UMP’s do entail a lower threshold of inventiveness than an invention patent and for that reason may be harder to invalidate.  In a sense, AMEC’s “high tech” weapon was the lowest tech patent weapon in the toolbox.   For a utility model, the invention must possess “a substantive feature and indicates an advancement”.  An invention patent requires “a prominent substantive feature and indicates remarkable advancements” (Patent Law, Art. 22).  Nonetheless, as has been evident for 10 or more years, UMP’s can have remarkable litigation value and should be considered a part of every foreign company’s patent portfolio for both defensive and offensive purposes.

The Customs proceeding is also a bit of an outlier, and also lacks any publicly available record.  While Chinese Customs has the authority to seize goods on import, and to seize goods that infringe patents, such seizures are rare.   The seizure by AMEC was also listed as one of Shanghai’s “top 10” IP cases for 2017, and the listing made it clear that the case should serve as an example for other innovative Chinese companies.

There are other unusual aspects to this case.  For example, why would a Shanghainese company (AMEC) file a case in Fujian against another company (Veeco) that is also locally headquartered in Shanghai?  Furthermore, why did they choose a jurisdiction which hasn’t seen one reported patent case with the word “chip” (芯片) in it?

Transparency Woes

The AMEC case now joins a short list of not-so-distinguished cases involving foreigners, where the court has yet to publish or significantly delayed publishing the final decision, including Huawei v Interdigital (Shenzhen first instance decision) and Chint v Schneider (Wenzhou).   This lack of transparency is striking considering the great strides generally being made in publishing court decisions.   Publishing decisions and other forms of transparency (such as amicus briefs) help ensure fairness, improve the quality of decisions, prevent corruption, develop appropriate legal strategies, and insure consistency with other legal opinions, amongst other benefits (as also noted elsewhere on this blog).

There may also be other explanations for this lack of transparency. The case was settled and, as noted, often decisions are not published after a case is withdrawn.  In addition, the case involved a preliminary injunction and such cases are just rarely published.  In the not too distant past requests for a preliminary injunction were handled exclusively by the “case filing division” of the courts and thus were never formally docketed. However, courts throughout China have been moving to limit the case filing division’s lack of transparency, and applied less discretionary “case recordal” acceptance procedures.  Fujian is no exception.  Non-publication leaves one guessing as to motives.

Added Motives to Be Non-Transparent?

Semiconductor companies are entitled to know more about Chinese and Fujian judicial practices in semiconductor patent matters, and what factors weigh in granting the rare preliminary injunction.  The news of July 3, 2018 that  the Fuzhou Intermediate Court reached a decision involving Micron’s alleged infringement of semiconductor patents, and that this case has apparently been released to the plaintiffs but has not yet been provided to the defendant, underscores the need for transparency (See press reports of Jinhua, UMC and Micron).   Also of concern is that the decision, which reportedly has immediate (立即 ) effect, was released the day before a US national holiday, July 4.  Generally preliminary injunctions are not effective until served, but time is likely of the essence in responsing to this order.  See also TRIPS Agreement Art. 41.3 (“3.  Decisions on the merits of a case shall preferably be in writing and reasoned. They shall be made available at least to the parties to the proceeding without undue delay.”)

Another concern amongst the foreign business community, given the current trade climate, is whether China has begun using legal tools to retaliate against US companies in sectors targeted by “Made in China 2025”, including retaliation against efforts to use overseas litigation.   The Micron decision comes less than two weeks after a promise that Beijing would not seek retaliation against foreign companies operating in China.  China’s increasing involvement in the semiconductor sector was described by former U.S. Commerce Secretary Pritzker in September 2016 as “unprecedented” state-driven interference that “distorts the market” and “undermine[s] the innovation ecosystem.”

One hopes that industrial policy is not affecting the legal system, as right now we need less, not more, fuel on the trade war fires.   Appropriately containing disputes to fair and expert legal systems can be one effective way of reducing trade tensions.

I welcome any commentary, corrections and updates.

The opinions expressed herein are mine alone.  In my capacity as an academic at Berkeley and as a lawyer or consultant, I do receive support from and advise semiconductor companies as well as service providers from time to time.  These comments were drafted solely in my academic capacity and without clearance or review by any company or association.

Revised 7/7/2018

 

 

 

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A Data Download on Semiconductor Patent Litigation in China

Because of its strategic importance to both the United States and China, the IC sector is a useful example of how Chinese policies and plans may – or may not – be influencing the Chinese government in the protection of foreign-owned IP.

A useful starting point for evaluating the challenges in IC IP protection in China is the data collected from China’s court cases.  IP House has conducted a heretofore unpublished and useful study of all semiconductor-related patent disputes in its database, attached here (in Chinese).  The data shows that there have been 166 first instance civil patent infringements IP judgments with the word “chip” (芯片), and 86 second instance cases.    There have also been 142 first instance administrative decisions, typically involving validity matters, and ninety second instance decisions. 52.91% of the first instance cases involved invention patents, 10.31% involved utility model patents and 36.77% involved design patents.

Regarding civil cases, 39 were heard in Zhejiang, 35 in Guangdong, 27 in Beijing, 21 in Jiangsu and 11 in Shanghai.  Every other jurisdiction had fewer than five cases, and no cases were reported for Fujian Province.

The data suggest a comparatively low “success” rate for plaintiffs in semiconductor patent disputes.   Amongst the 183 reported judgments, only 51 cases were fully or partially successful — a 38.34% success rate.  This compared to an overall success rate of about 80% for litigants in patent cases in 2014 in China, as reported by Bian Renjun at Berkeley. Cases were not reversed to a significant degree on appeal; 60 out of 70 cases supported the original decision of the first instance court.  Amongst the “top 10 “ courts in terms of litigation volume, the success rate for semiconductor patent plaintiffs varied dramatically.   Guangdong had the highest success rate (60%), followed by Beijing (43.75%), Zhejiang (23.08%) and Jiangsu (19.05%).  76 of 77 successful litigants obtained an injunction to stop infringement; one litigant did not request an injunction.

Regarding administrative reviews, 117 out of 140 cases involved affirming the original administrative decision, an “affirmance rate” of 83.57 percent.  Eighty one out of ninety cases were affirmed on appeal.

The United States was the principal foreign civil litigant, with seven cases, followed by the British Virgin Islands and the Netherlands, each with two cases.  The United States was the principal first instance administrative plaintiff challenging SIPO’s decisions, with 30 cases, followed by Japan (5), Netherlands (3) and several countries with only one civil case (France, Germany, Cayman Islands, Korea,   Singapore and Israel).

I draw the following tentative conclusions from this data:

  1. Success rates for semiconductor cases vary dramatically by jurisdiction in China. My guess is that the Guangdong courts, which have the highest success rates, have greater expertise in both semiconductor patent litigation and patent litigation overall, which may make them more “expert” on these matters. Due to variations in success rates amongst jurisdictions, the semiconductor sector is a useful example of why China needs a national appellate IP court.
  2. No matter what major court one looks to, success rates for these cases are lower than the average for other types of patent litigation. This may suggest either a lack of familiarity with the technology or an unduly skeptical view of the courts regarding semiconductor patent assertions at this time. Considering that the vast majority of the cases do not involve foreigners, the low success rate primarily affects Chinese litigants.
  3. Foreigners, and especially Americans, use the courts primarily to litigate patent validity matters. There were 4.5 times more administrative semiconductor patent cases brought by Americans compared to infringement cases. Overall foreigners brought four times more validity cases compared to infringement cases in this area.  This means that the Beijing IP Court, which hears all validity disputes, plays a key role for foreigners on semiconductor patent matters.  Semiconductor patent cases also follow the general pattern where foreigners are disproportionately willing to challenge SIPO in court, but are less willing to bring infringement cases to final adjudication.
  4. Utility model and design patents are frequently asserted in patent disputes in China and may have value to foreign companies needing to protect their IP in this important market.
  5. The Fujian courts do not appear in this IP House report. However, Fujian has already heard one high profile case (AMEC v Veeco), which was settled and does not appear to be publicly available at this time. The second high profile case, involves Micron Technologies, and is currently on-going.

I hope to blog further about the AMEC cases in the United States and China in a subsequent posting.