Basic situation
From 1986 to 2004, there were ***39 "337 investigations" initiated by the United States against Chinese mainland, accounting for 13% of the total number of "337 investigations" in the United States after 1986. Especially in the past three years, the "337 investigation" of the United States against China has grown very rapidly.
It can be seen from the above figures that China has become the main target and the biggest victim of the "337 investigation" in the United States.
In the 39 "337 investigations" conducted by the United States against China, the products involved were concentrated in industries, mainly including electronics, chemical industry, light industry, machinery industry, automobile industry and leather industry.
On the one hand, the "337 investigation" affected the export of China enterprises to the American market and expanded their market share; On the other hand, American domestic enterprises also use Section 337 as a relatively hidden non-tariff barrier to attack China's competitors. In recent years, China enterprises frequently encounter this stumbling block. Except for a few settlements, almost all failed. Even the final settlement was forced to pay a high patent license fee because there was no bargaining chip. This situation has seriously affected the export of domestic enterprises and industries to the United States, and some even completely lost the American market. Frequent "337 investigations" have caused huge losses to domestic enterprises and become an important factor restricting export growth.
cause analysis
The "337 investigation" is mainly aimed at the competition in the fields of technology and intellectual property. Of the 39 cases in which the United States sued Chinese mainland, 26 cases initiated the "337 investigation" procedure on the grounds of patent infringement.
Many domestic sued enterprises lack independent intellectual property rights, and many products rely on imported core parts for export. Lack of innovation and intellectual property awareness in the whole process of technology and parts import. On the one hand, the imported technology has become a simple imitation, on the other hand, although it has been digested and absorbed, it has not been protected by intellectual property rights, let alone applied for patents abroad; In addition, in the process of export, I don't know much about the legal environment in the United States, which leads to frequent intellectual property lawsuits abroad.
On the one hand, the world manufacturing industry is shifting to China, and the technical content of China's export products is rising, which objectively constitutes competition with American counterparts in the American market. At the same time, it is also related to the economic downturn in the United States, and American enterprises are forced to seek to curb the export of China products through market-oriented technical barriers.
The legal and economic circles predict that in the next 10 year, the "337 investigation" will be the biggest threat to China's exports to the United States, which is greater than the anti-dumping and infringement lawsuits of ordinary courts.
For American enterprises, the initiation and litigation cost of anti-dumping procedures far exceeds that of 337 procedures, which generally requires the support of the whole industry and is not easy to initiate; And in the infringement lawsuit, it is aimed at the products that the defendant has entered the United States. However, the plaintiff who won the "337 investigation" can effectively prevent competitors' goods from entering the United States. In other words, if American enterprises feel the competitive pressure of a certain kind of China products, they can independently start the "337 investigation" procedure to exclude such China products from the United States, while saving time and money. On the other hand, Section 337 does not require the premise of actual damage, which is much stricter than the usual international intellectual property law. As long as the domestic applicant in the United States can prove that the imported products are infringing, and the related industries in the United States are indeed growing, it can be concluded that the defendant has unfair trade practices and there is no time limit. If it is a permanent exclusion order, the products involved will never enter the US market, resulting in a large number of downstream products in China being implicated in a technical lawsuit.
exist problem
Facing the "337 Investigation", the problems existing in China enterprises mainly lie in several aspects. First of all, they are indifferent to intellectual property rights and rarely apply for intellectual property protection abroad. China's independent intellectual property rights have been seriously inadequate because of its long-term focus on tracking and imitation.
Secondly, when being investigated by "337", responding to the lawsuit was not active. Since 1986, China enterprises have been investigated by Section 337 of the United States, and most of them chose not to respond to the lawsuit, and the enterprises were sentenced by default, which led to the closure of export doors in many industries.
China's production or export enterprises are unfamiliar with this huge international lawsuit and don't know how to deal with it, so most of them take an evasive attitude. According to Article 337, if the sued enterprise fails to respond to the lawsuit, it will automatically lose the case, and the US International Trade Commission will issue a "permanent exclusion order" to prevent all enterprises in China from entering the US market. The "multifunctional portable tool" in 1996 is an example. Because all the defendants in China did not appear in court, ITC ruled by default and made a ruling of "general exclusion order".
From the perspective of litigation costs, the legal fees for anti-dumping are usually tens of thousands to hundreds of thousands of dollars, while the legal fees for "337 investigation" are several times or even dozens of times that of anti-dumping. A case will often drag on for several years, and enterprises will spend a lot of manpower and material resources for it. This has become a very high threshold for China enterprises to respond to lawsuits in recent years.
Therefore, American companies think that few China enterprises will defend themselves in the "337 investigation", and they think that China enterprises are "soft persimmons that are easy to pinch", which has also prompted more American domestic companies and foreign companies to file "337 investigations" against China enterprises and confidently apply for "general exclusion orders", making more and more China enterprises become victims of Article 337.
Positive response
How should China enterprises respond to the "337 investigation"?
First of all, we should attach importance to technological innovation and raise awareness of intellectual property protection. Enterprises should establish a sound intellectual property strategy as soon as possible. From the strategy of coping with the crisis, enterprises urgently need to improve the ability of patent litigation negotiation and infringement judgment in science and technology industry and strengthen the offensive and defensive strength of industrial patents. From the perspective of long-term development strategy, enterprises need to accumulate patent chips.
Before the products are exported to the United States, we must first raise awareness of intellectual property protection and conduct an intellectual property investigation, that is, whether the products concerned will infringe the intellectual property rights in effect in that country.
Enterprises can consider registering trademarks, patents and copyrights in the United States, and use American laws to prevent unfair competition from other operators and protect their own rights and interests.
Second, once a case is involved, we should respond positively in time to minimize losses. Faced with the "337 investigation", domestic enterprises usually have "five fears": fear of lawsuits, fear of spending money, fear of trouble, fear of responsibility and fear of losses. Therefore, enterprises that take evasive actions will eventually lead to products that cannot be exported. Practice has proved that it is the defendant who ultimately benefits and the franchise that suffers.
If the accused enterprise does not respond to the lawsuit, the US International Trade Commission will acquiesce in the facts in the indictment and exclude the products involved from the US market. If the United States International Trade Commission issues an indefinite expulsion order at the request of the applicant, all the products involved will be banned from exporting to the United States, which will affect the whole industry. In fact, in 2003, Energizer and Eveready of the United States accused 24 companies in China of infringing their patents on mercury-free alkaline batteries, and other battery companies that were not listed as defendant companies bore part of the litigation costs.
Third, we should attach importance to the role of industry organizations and the government. In the face of more and more frequent "337 investigations" abroad, it is unbearable to rely on one or several enterprises to fight alone, and it needs the joint response of the whole industry, the whole industry and even the government.
In the process of responding to the investigation of alkaline manganese batteries in the United States, China Battery Industry Association explored the working mode of "enterprises as the main body, associations taking the lead, chambers of commerce cooperating, government supporting and selecting lawyers", which gave full play to the organization and coordination role of enterprises as the main body and trade associations.
Enterprises can also seek the support of the government and industry associations, participate in international coordination through the government and industry associations, establish an industry early warning mechanism, and establish a cost-sharing mechanism for responding to lawsuits. More importantly, China has established a system similar to the "337 investigation" in the United States.