Careful What You Ask For: China's Patent System Causing Trouble
from the and-now-you've-got-it dept
However, you should be careful what you wish for. Companies are now discovering that, just as in other countries, the patent system in China can and will be used to block out competition, rather than encourage innovation. France's Schneider Electric just learned that the hard way, after losing a patent infringement lawsuit in China and being ordered to pay $23 million for infringing on a Chinese company's patents. The problem? Schneider had tons of prior art to show that the patent by the Chinese firm, Chint, was hardly new or innovative. But, the Chinese courts ruled that it didn't really matter. That's because this was a utility patent (rather than an invention or a design patent) -- which based on the Chinese law requires almost no investigation into whether or not its new or obvious. Plus it's cheap. $70 and its yours. Basically, it's a formality system, rather than a true patent examination.
All those foreign nations who kept pushing China to build up its own patent system and learn to "respect intellectual property" may soon be regretting that, as they're suddenly blocked out of the Chinese market by Chinese firms who fast-tracked cheap utility patents themselves with little to no review. Be careful what you wish for.