The U.S. Patent System, not China’s IP Policies, is the Reason Behind America’s Decline in Global Competitiveness

China has established courts that specialize in intellectual property litigation so litigants have an experienced, fast and cost-effective forum to resolve patent disputes. These specialist courts take about 10 months to resolve patent infringement lawsuits with litigation costs running at approximately $200,000. In contrast, patent litigation in the U.S. often takes five or more years to resolve with litigation costs running in the many millions of dollars. A fairly ordinary dispute when litigated in the U.S. can easily surge past $3,000,000 when you factor in the inevitable post grant challenges (each of which will run $500,000 to defend, sometimes more) and the federal court litigation after that…If multiple patents are infringed they will be each challenged in a post grant proceeding, which can and does easily raise the cost litigate to 10 times or more of what it costs in China…
Stated another way, a patent holder in China has an 84% chance of protecting their patented invention, quickly obtaining injunctive relief, which can completely shut down the infringing activity and securing patent licensing fees that reflect the true market value of their patented invention. Meanwhile, a patent holder in the U.S. has a nearly 90% chance of losing their patent claims to an invalidity challenge. And even if a patent holder can avoid having their patent claims invalidated, the best they can hope for is being forced to grant an infringer a compulsory license to their patent in exchange for licensing fees that do not necessarily reflect the true market value of the patented invention.

Paul Morinville and Terry Fokas

IPWatchdog.org

March 2018

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