China’s IPR Abuse Problem. Wait, What?

December 8, 2012

In case you hadn’t noticed, 99.999% of the China IP disputes that bubble to the surface in the media involve either bona fide questions of fact or law, or alternatively, famous brands/companies. Either way, one would be hard pressed to assert that there are not real consequences at stake with these cases. Moreover, unless you’ve been living under a rock for the past decade, IP infringement in China is a huge problem.

And yet, some folks out there would prefer to focus on the alleged problem of IP owners abusing their rights by filing malicious suits.

In an Op/Ed written by Liu Chunquan, a commentator at Global Times, a copyright fight between two local firms is front and center:

[M]any suspect Wind Information Co, a financial data provider, of using this strategy on Zhejiang Hithink Flush Information Network Co. Wind recently stated that it would be filing a copyright infringement lawsuit against Hithink and was seeking 99.2 million yuan ($15.92 million) in damages. Yet, Wind was one of the 10 largest shareholders of Hithink until just before the suit was filed.

Wind said that it had tried to resolve its dispute with its competitor on its own, but when negotiations broke down the data provider unloaded its shares and decided to pursue legal action against Hithink.

As an anecdote, this case might be interesting. To use it to support the existence of a new, and worrying trend in China, is quite a stretch. Are there malicious civil cases in China? Undoubtedly.

Is abuse of IP rights a rising trend? I don’t think anyone knows the answer to that, but I assure you that it pales in comparison to IP infringement cases. (FYI, if you’re looking for some statistics in this area, try heading over to the China IPR blog¬†or take your chances with the usual government sites.)

Liu ends his Op/Ed with this cautionary note:

With IPR still a relatively new concept in the local business community, Chinese firms need to be on their guard against malicious lawsuits based on trumped-up IPR claims.

I think one could say the same thing about property rights and lawsuits in general. Liu’s statement isn’t wrong, it’s just too narrow and bizarrely focused on IPR. If Liu wants to do some concern trolling about “trumped-up lawsuits,” there’s no reason to limit the discussion to IP. Alternatively, if the point is to discuss the most worrisome issues in the IP sphere, I would suggest sticking to the basics (i.e., infringement).