Chinese “Patent Extortion” Case Highlights Ongoing Shift in Perception of NPEs
As patent litigation expands in China, NPEs have come to occupy an increasingly prominent position in that narrative—but their cultural perception and their treatment in the courts is still evolving. That continued evolution is reflected in a prominent case widely covered by the Chinese media this fall, dubbed the country’s first example of “patent extortion”. Last year, an inventor was charged with criminal extortion for leveraging settlements from vulnerable, early-stage companies, but a court ruled that the defendant’s overall assertion strategy was a legitimate use of patent rights, charging him with extortion only for forging a backdated license agreement. The prosecutor has since challenged that ruling. Here, RPX takes a deep dive into the history of this case, based in part on exclusive translations of multiple key documents. Our analysis reveals a heated debate over the proper interplay between patent law and criminal law in China, and over how this balance could profoundly impact the further development of China’s patent system—along with the innovation that it is designed to enable.