Analyses & Studies

Survey on the intellectual property of French companies in China

INTELLECTUAL PROPERTY (IP) IS A MAJOR ISSUE FOR 82% OF FRENCH COMPANIES IN CHINA

55.1% of companies report having been confronted with bad faith trademark applications in the past three years.

 

With more than 2,100 subsidiaries employing nearly 445,000 people, France is the leading European investor in China in terms of number of companies. With 1,600 members, the French Chamber of Commerce and Industry in China (CCI FRANCE CHINE) has been defending the interests of these companies since 1992.

 

The latest Business Climate Survey (spring 2022) revealed that 56% of respondents believe that the intellectual property regime is an obstacle to the development of innovation in China. A detailed follow-up survey was conducted from January 2nd to 20th, 2023, on intellectual property (IP) issues in China among nearly 100 companies. The following lessons emerged:

 

Read the report of the survey here.

Consulter le rapport de l'enquête ici.

在此阅读完整报告.

 

Read the findings of the survey below:

  • IP protection in China is a major issue for more than 82% of companies surveyed. They extensively use intellectual property rights to protect their innovations, although one in ten respondents indicated they do not own any IP rights in China.
  • Companies that use IP to protect themselves in China mainly use trademarks (75. 5%) and invention patents (50%). More importantly, most companies combine different types of IP rights to best secure their innovations. For example, three-quarters of right-holding enterprises in China are protected by at least two different types of rights, some cumulating up to five types of rights. In addition, 71.4% of companies adapt their IP strategy to China and its specificities.

 

  • The overall perception of China’s IP environment by French companies is unfavorable. 49% of respondents believe that the level of protection provided by Chinese IP laws is insufficient, and 46.9% are dissatisfied with the enforcement of IP rights by the Chinese authorities.

 

  • While more than one in two respondents believe that procedures for obtaining rights are effective in China (50% consider them satisfactory, 7.1% find them excellent), 35.7% of respondents believe they could further be improved. This applies in particular to trademarks, especially regarding the problem of bad faith applications.

 

  • 55.1% of companies say they have faced bad faith trademark applications in the past three years, and 57.1% say they have faced other types of infringement of their IP rights over the same period. Nearly 47% of respondents have been confronted with both of these issues over the past three years. Furthermore, over half of the companies that fell victim of IP right infringements report that several types of their IP rights were infringed during this period.

 

  • IP violations negatively impact the activity of companies in 4/5 of cases. A third of the companies victim of infringements consider its impact as very significant (35.9%). The impact is mainly financial as 65.6% of companies having faced infringements have had to undertake significant expenses, regardless of the IP right defended. Some have renounced to enforce their IP rights, 30% of which due to a lack of confidence in the Chinese system.

 

  • This does not prevent some companies from being optimistic (37.8%) about the future evolution of the IP system in China; more than a third of respondents (34.7%) have a neutral outlook. Some are pessimistic about the future, and 24.5% of respondents indicate that their vision of the evolution of the IP system in China has a negative impact on their development strategy.

 

Intellectual property is an essential topic for French companies in China. An environment that respects IP rights, is conducive to obtaining and defending rights, and ensures legal certainty is essential to promote bilateral trade and investment between France and China. The number of French companies that face IP rights infringement in China remains too high, and bad faith trademark applications remain damaging for French companies, regardless of their size or sector. Efforts are therefore needed to better combat counterfeiting and fraudulent practices.

 

Read the report of the survey here.

Consulter le rapport de l'enquête ici.

在此阅读完整报告.

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