Sepetys and Cox (2009)
Contents
Source Details
| Sepetys and Cox (2009) | |
| Title: | Intellectual property rights protection in China: Trends in litigation and economic damages |
| Author(s): | Sepetys, K., Cox, A. |
| Year: | 2009 |
| Citation: | Sepetys, K., & Cox, A. (2009). Intellectual property rights protection in China: Trends in litigation and economic damages. NERA Economic Consulting. |
| Link(s): | Definitive , Open Access |
| Key Related Studies: | |
| Discipline: | |
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| About the Data | |
| Data Description: | The study assesses damages awarded for IPR infringement in 179 cases, using data collated from 15 different sources. These included Chinese government agencies, news stories in Chinese and international media, law firm newsletters, and other reports. |
| Data Type: | Secondary data |
| Secondary Data Sources: | |
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| Data Analysis Methods: | |
| Industry(ies): | |
| Country(ies): | |
| Cross Country Study?: | Yes |
| Comparative Study?: | No |
| Literature review?: | Yes |
| Government or policy study?: | No |
| Time Period(s) of Collection: |
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| Funder(s): | |
Abstract
As a result of external pressures and to meet its own economic objectives, China has been moving its intellectual property rights (IPR) regime closer to those found in many more developed nations. As China's economy grows, its transition from manufacturing-based to knowledge-based production, more comprehensive laws, and more attention to enforcement have led to an increase in the number of IPR infringement cases being brought before the courts or taken up through China's administrative procedures. In this paper, the authors analyze the changing role of IPR enforcement in China and examines trends in damages awards in IPR cases in China, using a proprietary database, developed by NERA, of cases filed in China between 2002 and 2008. The authors find that, while there has been a marked increase in IPR infringement cases being brought before Chinese courts and, consequently, in the frequency of damage awards over the past decade, the damages both claimed and awarded tended to be very small compared to those in other jurisdictions and compared to the likely degree of harm caused.
Main Results of the Study
The authors find that, under the administrative systems established in China, penalties and finesfor IPR violations generally do not appear to provide adequate deterrence to would-beinfringers. Fines are so low that they appear to allow infringers to earn an adequate profit,even if caught and fined. Consequently, most studies suggest that fines represent only atiny fraction of the estimated sales revenue lost to IPR holders.The review by the authors also suggests judicial damage awards for IPR violations in China are lowcompared to the United States and compared to the likely degree of harm caused.Furthermore, although the frequency of damage awards in IPR cases in China hasincreased, the average amount awarded has not increased. However, each year thereappear to be a few cases which involve significant damages, and these high damageawards appear to be occurring more frequently each year. It also appears that, whiledamage awards tend to be low, IPR owners typically make low damages claims.
Policy Implications as Stated By Author
As China becomes a major player in the world economy, it is strengthening its commitment to upholding and enforcing IPR. Chinese laws andregulations are converging with international standards. Compared to other markets the level of damages awarded for IPR infringement is still very low.
Coverage of Study
Datasets
| Sample size: | 179 |
| Level of aggregation: | Cases |
| Period of material under study: | 2002 to 2008 |
