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According to a NYtimes article yesterday Xi Jinping had promised that China would protect intellectual property, then he reneged before the trade talks faltered.

I am trying to understand the context of IP protection in China.

Consider the following scenario. A US company today owns an (invention, not design) patent on the ideas in a product. The company markets and sells this product worldwide—Europe and China included. The company does not own a parallel patent in either the European Union or China.

What is the difference between Europe and China? In particular:

  • What stops a European company from selling a product in Europe infringing on a US patent?

  • Is this any different in China at present? What stops a Chinese company from selling a product in China infringing on a US patent?

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Foreign firms have long complained that enforcing their intellectual property rights in China is difficult due to local judicial protectionism, challenges in obtaining evidence, small damage awards, and a perceived bias against foreign firms. . . .

Local Judicial Protectionism

One major complaint levied against China’s IPR regime is that cases brought to an intermediate court (at the municipal level) will suffer from local judicial protectionism. Long and Wang found in their 2015 study that in IP cases between Chinese firms, plaintiffs litigating in their hometown are significantly more likely to win. . . .

Challenges in Obtaining Evidence

In order to effectively litigate intellectual property cases, IP holders need evidence. In the United States, parties usually obtain information through the pre-trial procedure of discovery, which includes interrogatories and depositions, as well as requests for admissions and access to documents, real property, or other relevant items for review or testing. In China, on the other hand, no formal process of discovery exists, and there is no requirement that IP infringers provide evidence, such as sales or accounting documents, that could be used to show infringement. In fact, the burden to provide evidence is on the plaintiff. Many companies have claimed that this makes it impossible to conduct fair IP litigation in China. . . .

Small Damage Awards

. . . . Many businesses have complained that pursuing intellectual property cases in Chinese courts is not worthwhile because the damages awarded are too small. Some estimates indicate that patent holders currently receive around 36 percent of the damages they seek in litigation, with damage awards averaging around just 80,000 RMB ($12,400) and legal fees between 10,000 RMB and 30,000 RMB ($1,550 to $4,650). . . .

Bias Against Foreign Firms

Finally, a string of high-profile losses to relatively unknown Chinese companies in patent infringement cases by companies like Apple, Samsung, Sony, and Dell have convinced many observers that it is impossible for foreign firms to get a fair shake in China’s courts. . . .

The material quoted above, from this source, described the historical complaints about Chinese patent law, and then goes on to suggest that many of these concerns have lessened due to legal and policy changes in the last few years.

Generally speaking, in Europe, the patent enforcement process is similar to that in the U.S.

You might also consider asking this question again in the Patents.SE forum for more specialized insight.

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Patents are territorial - A U.S. patent allows you to try to stop infringers who make, sell, offer for sale, use (all in the U.S.) or import into the U.S. For example, a Chinese or German or Argentine located company can make it and sell it world-wide, except in the U.S. no problem at all. Other patent laws around the world are similar. For a Chinese patent stop someone, they must be infringing in China, etc.

No country "makes provisions" for other country's issued patents. If you want protection in a place, get a patent issued there. There are international agreements providing that each country treats residents of other countries the same as their own residents and they cross recognize each other's applications for priority under the Paris convention. There is further cooperation in applying for patents via the Patent Cooperation Treaty.

The penalties for infringement vary and the difficulty in proving a case may vary. In China the penalties for infringing are very low by U.S. standards and it is almost impossible to get "discovery" where one can get both evidence of infringement and data on ill-gotten profits for purposes of calculating damages. It is actually easier (for a U.S. applicant or really anyone) a get patent in China than in Europe. The EPO searchers and examiners are very thorough and very picky. But it is easier to get serious damages for infringement in Europe than in China.

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    Um... and: What protections does Europe provide for US patents (that China doesn't)? – Calaf Jun 2 at 1:17
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    None at all. I modified the answer a few min. ago to more clearly answer the question. – George White Jun 2 at 1:33
  • You may be right, but then the authors of the NYTimes article are clueless. Implicit in the article is that there is a difference—one important enough to derail a trade deal. Of course the article doesn't specify. – Calaf Jun 2 at 2:10
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    The article says - "The Trump administration had demanded stronger penalties for violating foreign patents and tighter laws to prevent the Chinese from demanding that foreign businesses transfer critical technologies." The only logical reading of "foreign patents" is "foreign owned Chinese patents". It is very very very foundational that patents are territorial. A quick look at any patent law information will bear that out. The Chinese have many ways to screw over U.S. and other companies starting with requiring that they set up shop as 49/51 percent joint ventures with locals. – George White Jun 2 at 6:12

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