Rouse launches China Software Litigation Report

Report examines how foreign companies have fared in Chinese courts

In a report released today, Rouse and its Network Firm, Lusheng have analysed all software litigation cases published in China involving foreign software copyright owners between 2010 and 2019.

Some key findings of the report:

The number of foreign software companies litigating in China is small. Out of 1,303 first instance cases in CIELA during this period, cases brought by foreign plaintiffs at first instance number 285. By comparison, for patent litigation there are 13,923 total first instance cases in the same period, of which 612 cases are brought by foreign patent owners. This indicates that software publishers appear to be filing significantly fewer cases.

This may reflect the smaller number of global enterprise software licensors who may count China as a key market. It may also reflect the fact that enterprise software licensors often have inhouse compliance programs to pursue un-licensed or under-licensed users and convert them to customers. Thus negotiation, and not litigation, is the preferred strategy.

Nevertheless, anecdotal accounts from software compliance professionals indicate that China is a jurisdiction where many have been hesitant to litigate, and the relatively small list of foreign companies that appear in our dataset bears this out. Given that software piracy rates in China, according to the BSA’s latest survey1 , remain at 66%, this suggests that software licensors who do not make use of all available enforcement tools are missing out on significant revenues. As our report shows, most of those that have brought cases to the Chinese courts have enjoyed marked success.

The report has used data from CIELA, the Rouse owned and operated database of IP cases published buy China’s civil courts between 2006 and 2019, now totalling 50,000.

To access the report, please click here.

The report was authored by Chris Bailey, Rouse Principal based in the Shanghai office, Doug Clark, Rouse’s Global Head of Dispute Resolution, Landy Jiang, Partner of Lusheng Law Firm based in Beijing and Aria Tian, Head of the China Research Unit.