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Flipping The Script: How Chinese Companies Are Bucking The Norm and targeting foreign businesses For Infringing Upon Chinese IP

Written By: Nick Gennaro

China has a history of stealing intellectual property (“IP”) from foreign companies for use in their own products. In 2019, a survey of CNBC CFO Council businesses reported 1 in 5 companies had instances of Chinese firms stealing intellectual property in the past year, with a third reporting that Chinese firms had stolen from them in the past decade.[1] It is estimated that Chinese IP theft costs the US anywhere between 225 billion to 600 billion dollars a year.[2]

But those numbers may soon be flipped around, as Chinese regulators crack down on infringement of their own IP in a shocking reversal of roles. Over the past four years, IP-related lawsuits in China have tripled, revealing an increase in IP litigation from a country who has become more protective of their countries intellectual property.[3]

Japan has also been on the forefront of this battle over IP. Muji brands, a popular Japanese lifestyle/stationary brand, was embroiled in a nearly three year long legal battle over the trademark of “Mujirushi Ryohin”written in Chinese characters.  This legal battle recently resulted in a Muji victory, but  also led to over 10 new legal disputes over this brand.[4]

Japan is one of many countries that have struggled with reigning in Chinese IP theft.[5] In 2019, federal officials charged Huawei, a Chinese based telecommunications equipment and consumer electronics company, with stealing trade secrets from T-Mobile regarding cell phone technology and robotics.[6] T-Mobile claimed that Huawei bribed employees into taking technology from T-Mobile and other companies.[7]

Chinese company, Jujian Jinhua Integrated Circuit Co., was also charged for theft of trade secrets from semiconductor maker Micron Technology, a United States Company,  for allegedly trying to steal information from Micron  to develop dynamic random access memory (“DRAM”) for computer electronics.[8]

Only time will tell though if this change of mindset will influence and subdue Chinese international IP theft has yet to be seen. However, it is ironic that some Chinese companies are seeking to protect their intellectual property while the same companies have been allegedly stealing information from other companies. As China grows and realizes the need for strong and protective patent laws to protect their own burgeoning intellectual property  from international competition, perhaps businesses will have a change of heart.  Maybe these companies will take the phrase“do unto others which you wish to be done unto you” to heart and not steal intellectual property from others.

[1] Eric Rosenbaum, 1 in 5 Corporations Say China Has Stolen Their IP Within the Last Year: CNBC CFO Survey, CNBC (Mar. 1, 2019) https://www.cnbc.com/2019/02/28/1-in-5-companies-say-china-stole-their-ip-within-the-last-year-cnbc.html [https://perma.cc/GY9R-5USD].

[2] Id.

[3] Maki Sagami, China Goes on an Intellectual Property Offensive, Nikkei Asia (Sept. 22, 2021, 6:00
PM) https://asia.nikkei.com/Business/China-tech/China-goes-on-an-intellectual-property-offensive ​​[https://perma.cc/T5YC-7BYK].

[4] Phoebe Zhang, Muji Ordered to Pay Chinese Firm US $89,000 and Apologise After Losing Trademark Appeal, South China Morning Post (Dec. 11, 2019, 8:15 PM) https://www.scmp.com/news/china/society/article/3041684/muji-ordered-pay-chinese-firm-us89000-and-apologise-after-losing [https://perma.cc/MU3Y-P2B2].

[5] Id.

[6] Paul Wiseman & Michael Liedtke, Here are 5 Cases Where the U.S. Says Chinese Companies and Workers Stole American Trade Secrets, Chicago Tribune (Feb. 21, 2019, 12:55 PM) https://www.chicagotribune.com/business/ct-biz-us-china-trade-war-ip-theft-20190221-story.html [https://perma.cc/EK3A-4DZR].

[7] Id.

[8] Id.

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