The rapid growth of Chinese Industry is unparalleled in world history. China just recently surpassed Germany in terms of exports. To some, that may not be saying a lot. However, just last year, Germany was the world’s leading exporter of goods and services, ahead of the United States. This makes China No. 1 in terms of exports and in export growth.

Outside of exports, the economy of the People's Republic of China is the fourth largest in the world when measured by nominal Gross Domestic Product and is predicted to surpass Germany to assume third place in early 2008. On this measure, the US is still the world leader, yet able to boast having the largest consumer market. This of course will change too—it’s just a matter of time. Given that the life of a patent is 20 years from filing, you have to think long term when you think about where to file your patent applications. Within the scope of 20 years, almost every economist agrees that China will surpass all other nations in economic dominance. Therefore, obtaining a patent in China should be an important aspect of your overall intellectual property strategy.

Beyond the usual problems associated with a young and developing legal environment, the biggest problem for those wishing to protect their ideas and trademarks in China is finding reliable, and skilled Chinese patent attorneys to do the work for you, to represent you before the Chinese Patent Office, and before the courts. Zheng Shengli, dean of the intellectual property law school of Peking University, has been quoted as saying in late October that by 2010, China may need 55,000 to 60,000 IP professionals and 30,000 more experts will be needed in the following decade. "The number of patent filings has been growing by 15 percent on average in the past three years," said Zheng. "China led the world in trademark numbers for three years in a row, and the number of copyright registrations also grew substantially, so without adding more hands, authorities will have difficulty handling the demands." The demand is not just from Western companies and individuals. As China’s economy grows, so too will the internal demand for Chinese patent attorneys and IP professionals. Yes, China is becoming a global innovator, and is evolving away, albeit too slowly, from its copycat past. For example, China is taking the lead in the design and development of diesel engines. Just last week, China Yuchai International Limited , the leading manufacturer and distributor of diesel engines in China, announced its latest R&D innovation -- a hybrid diesel/electric engine, which has been widely recognized as a major technological development for energy conservation and emission reduction. "As China's economy continues to grow rapidly and shifts from manufacturing to one that is more innovation-based, it is becoming a hotbed of patent activity," said David Brown, Executive Vice President, Thomson Scientific. Consequently, as China’s own enterprises begin to claw for the best and the brightest of China’s IP talent, less and less will remain for the foreigner.

GreatWallIP.com is an early effort to help Western companies and individuals seeking qualified help in China, to file their patent applications, monitor the activity of competitors and copiers, and help organize actions against counterfeiters. The site is about “providing information and resources of interest to patent-minded European or US-based companies who are, who hope to, or who feel compelled to protect their intellectual properties in China.” (from the site).

You are not alone in thinking that having to deal with China is a necessity. The governments of Europe and the United States are mobilizing to put "equitable economic globalization at the core of their relations with China “just as in 1949 they made NATO the bedrock of global security”, European Union trade chief Peter Mandelson was recently quoted as saying. The United States, European Union and other key trading partners last month announced their intention to negotiate an Anti-Counterfeiting Trade Agreement (ACTA) to encourage other countries to meet higher intellectual property rights enforcement standards. Lawmakers in the United States concerned that global counterfeiting and piracy are hurting American business introduced two bills on Wednesday aimed at curbing the practices, and said they want more international cooperation to do so. While the U.S. has aggressively challenged China at the World Trade Organization, launching four new commercial complaints since 2006, Europe has been more reticent. It has initiated only one dispute, joining Washington in a case over Chinese rules on imports of foreign-made auto parts.

A cornerstone of all these efforts is to ensure meaningful intellectual property protection is available to all who seek it, regardless of national origin. Of course, you must “seek it” and secure your Chinese intellectual property rights in order to benefit from the international effort to protect these rights. Therefore, to even have a chance at winning the game, you must ante up by filing applications to protect your rights in China or cede your rights to the public domain, where those who can make the product at the lowest costs, the Chinese, have the clear upperhand.

Given the size of the market and the prospects for growth of that market over the life of a patent, obtaining Chinese patent protection is inexpensive. If a US or European patent application has already been written, it costs about $4500 to translate and file the same application in China. Obtaining copyright protection begins at about $500 per work. Chinese Trademarks can be had for about $2000 per mark.

Despite the overriding tendency to file patent applications in China, there are a few reasons NOT to file in China. The primary reason is when the product you wish to protect can easily be copied in China and where fixed costs of equipment represent a low barrier for entry. Why? Because low fixed costs often means mobile, light production equipment which are relatively easy for the Chinese copier simply to move should he change locales and begin copying elsewhere under a different name, in order to avoid accountability for his actions. If this is the case, a Chinese patent may simply inspire a copy of your product, with little you can do about it. On the other hand, if fixed costs of equipment represent high barriers to entry or manufacturing processes are difficult to replicate, then seeking a Chinese patent may be advisable. Another reason for not filing in China is where your invention is say, a manufacturing process that you can effectively keep secret during its exploitation. Of course, once the process is no longer secret, it enters the public domain and anyone may freely copy it, so there is a risk. Therefore, where the risk that the invention will become known is high, you should consider filing a patent application to protect it in China.

Da Vinci Partners LLC is a firm of European and US Patent attorneys. The firm is licensed to prepare and file patent and trademark applications directly in the US and Europe and can manage any filing in China. Visit the firm’s website at www.moetteli.com for more information.