China fertile ground for software copyright litigation: report
Foreign software companies often enjoy high win rates and significant damages awards when enforcing their copyright in China, according to new data from IP firm Rouse.
According to a new report published yesterday, July 7, by Rouse and its Chinese affiliate Lusheng, while foreign software companies don’t often enforce their copyright in China, those that do enjoy a high level of success.
The Rouse report revealed that foreign software plaintiffs filed just 285 cases in China from 2010 to 2019, just 22%.
While China has a reputation for being a harsh legal environment for foreign plaintiffs, this figure is particularly low when compared to other areas of IP: “By comparison, during the same period, three times as many patent infringement cases were brought by foreign plaintiffs.”
Despite foreign plaintiffs’ reticence to bring software copyright cases, those that do tend to get results—a win rate for 85.3% for foreign plaintiffs is higher than that of domestic software companies.
Average compensation for software copyright plaintiffs reached $70,932, compared to the $29,037 figure for successful patent litigators.
This average was calculated from a dataset that included a top-end award of $2,830,456, with the top five awards all exceeding $990,000.
“The data shines an important light on previously unexplored trends in software litigation in China and reveals that a number of software licensors have successfully asserted their rights and collected large damages awards,” said Doug Clark, global head of dispute resolution at Rouse.
Clark added: “The small number of companies suing in court may reflect that China is not yet considered as a key market. Further, many enterprise software licensors often have in-house compliance programmes to pursue infringers through negotiation rather than litigation. Some will certainly have a strategy of first signing licenses with arbitration clauses so they can pursue claims through that route.”
“Nevertheless, we are often told by licensors that China is a jurisdiction where they are hesitant to litigate and the relatively small list of foreign companies that appear in our dataset as plaintiffs in Chinese courts seems to support this,” he concluded.
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