Hello,

I am sending you copy of a working paper that I hope you will find interesting.  My colleague, Kristina Sepetys, and I have just completed an update of our paper: “Intellectual Property Rights Protection in China:  Trends in Litigation and Economic Damages.” (http://www.nera.com/publication.asp?p_ID=3693).

The paper first describes the changing role of Intellectual Property Rights (“IPR”) enforcement in an evolving economy such as China’s.  It also describes the judicial and administrative procedures available for IPR enforcement.  Then, drawing upon a unique dataset we have compiled, the paper examines trends in damage awards in IPR cases in China.  We conclude that IPR damages in China are generally too low to compensate IPR owners for their losses or to have any meaningful deterrent effect.  China-based plaintiffs appear to receive lower awards in cases in which they prevail than foreign-based plaintiffs.

However, these findings also suggest that significant damage awards are being awarded and that the frequency of such awards continues to increase.  This conclusion is corroborated by recent events.  For example, in a recent decision by the Intermediate People's Court of Hangzhou, Korean electronics maker Samsung was ordered to pay approximately $7.3 million in compensation to Holley Communications for infringing Holley's handset patent.  Also, the Beijing Intermediate Court recently awarded the German bus maker Neoplan about $2.9 million for infringement of its design patents for buses. 

In another important development, the Standing Committee of China’s National People’s Congress recently approved the third Amendment to China’s Patent law.  The revised Law will take effect on October 1, 2009, and includes, among other features, a provision to increase the upper limit of statutory damages to 1 million Yuan (about $150,000).

This paper will also be available in Chinese.  Please contact me if you would like to have a copy in Chinese.

I would welcome your feedback.

Regards,

_______________________________

Alan Cox
Senior Vice President
NERA
   Economic Consulting
One Front Street, Suite 2600
San Francisco, CA 94111
Tel: 1-415-291-1009, Fax: 1-415-291-1020
Mobile: 1-925-297-7437
Alan.Cox@NERA.com
www.nera.com
_______________________________ 

Dr. Alan Cox Senior Vice President Dr. Cox participates in NERA's Intellectual Property, Securities, and Antitrust Practices. He has extensive testimonial experience before juries in Federal and state court, before panels of arbitrators, and before administrative law judges. His experience includes the high technology, retailing, telecommunications, and energy industries. He has estimated intellectual property damages in matters involving semiconductor patents, disputes over technology sharing agreements in microprocessors, and patent fraud. He testified in a matter involving alleged theft of trade secrets and false advertising in the manufacture and sale of golf balls. He was recently retained by Texas Instruments in a patent case against GlobespanVirata, which resulted in a jury award of $112 million to Texas Instruments. He has also testified on antitrust allegations arising out of licensing practices in metal fabrication. Other industries in which he has consulted or testified in intellectual property matters include molecular biology, biotechnology, and software. Dr. Cox has also testified in class action securities fraud cases and filed affidavits on matters such as class certification, the impact of allegedly disparaging statements on securities prices, and a wide array of financial damages. He has also prepared testimony and reports in criminal matters and civil complaints. Dr. Cox has testified on several antitrust issues. These include Robinson-Patman Act matters, the competitiveness of crude oil and product pipelines, the competitive consequences of a major electric utility merger, and allegations of price fixing of professional services. Dr. Cox has undertaken economic analysis of asserted damages due to alleged attempts to monopolize portions of the credit-card industry. Dr. Cox holds a PhD in economic analysis and policy from the Haas School of Business at the University of California at Berkeley and an MA in economics from the University of British Columbia. He has previously held positions as a Senior Vice President at LECG and as a Visiting Economist at the Massachusetts Institute of Technology's Energy Laboratory.