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Despite reforms, IP protection still required

The number of intellectual property cases heard in China continue to increase. There has been a 41.8 percent increase in cases over the past year.

According to a South China Morning Post article, this is the second year in a row the cases went up by over 40 percent. In 2017, China courts handled 213,480 cases. In 2018, the number increased to 288,000. The number of prosecutions has also increased.

Despite increased prosecutions, IP thefts continue to be a concern. One recent article pointed out that it remains a contentious item of discussion between the White House and Chinese officials.

Also, approximately 20 percent of companies claim to have experienced intellectual property theft at the hands of China. Ultimately, this leads to billions of dollars of losses for both nations.

Understanding the need for IP protection

There are varying ways Chinese companies obtain the intellectual property of American companies. Methods of IP theft include both cyber attacks and espionage. However, there is also a major issue with forced technology transfers. These transfers involve Chinese officials requiring companies investing in Chinese trade to provide IP information.

Hopefully, the IP reforms going on in China will help remedy the situation. The changes should lead to more consistency in decision making. But until we see IP protection improvements, there will be a greater reluctance for American companies to invest there.

It’s important for companies to understand the obstacles they face before investing in Chinese companies or seeking to establish licenses for their products. To enter the market blindly could mean that the intellectual property your company created will be at risk.

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