Intellectual Property Rights Protection in China: Litigation, Economic Damages, and Case Strategies

Alan Cox, Senior Vice President at NERA Economic Consulting, and Kristina Sepetys, Senior consultant at NERA Economic Consulting

3/25/2015
(Original Publish Date: 3/1/2006)

Although intellectual property rights (IPR) historically have not received strong protection in the People's Republic of China, as a result of external pressures and internal economic objectives China is now moving closer to the IPR practices and standards found in Western nations. A growing economy, more sophisticated laws, and increased attention to enforcement have led to IPR infringement cases being brought before Chinese authorities in greater numbers. However, IPR laws and policy that would strengthen and enforce the rights of IPR owners have yet to be fully implemented. In this chapter from Thomson West's Corporate Counsel's Guide to Doing Business in China, NERA Senior Vice President Dr. Alan Cox and former Senior Consultant Kristina Sepetys suggest that full implementation would likely provide a higher degree of deterrence to potential infringers. The authors argue that IPR violations may ultimately have negative effects on the broader Chinese economy by discouraging investment and imposing costs upon those companies attempting to offer goods and services. Dr. Cox and Ms. Sepetys note that because violations continue to be widespread, work remains to be done if China is to accord with other major economic powers in the area of IPR protection, particularly in the area of enforcement and damages.