Doing Business in Shenzhen – Navigating Patents

June 05, 2020

The City of Shenzhen has been central to China’s emergence as a global technology leader. Located on the Southern tip of Central China, Shenzhen was dedicated as a Special Economic Zone in 1979, and quickly grew from a small fishing village into a city of 12 million people. Shenzhen’s growth was fueled by manufacturing, but is being propelled forward by innovation. For years, the “electronics capital of the world,” Shenzhen makes 90% of the world’s electronics, including many products that were designed in the Silicon Valley. More recently, Shenzhen has become an innovation center in its own right, spending an impressive 4% of its GDP on research and development. Shenzhen’s emergence as a technology leader has been accompanied by dramatic increases in patent filings and IP litigation. In early 2020, China surpassed the United States as the largest filer of international patent applications, with nearly half of those applications coming from Shenzhen inventors. Shenzhen also has dedicated itself to making itself an international IP protection center. Shenzhen’s IP protection infrastructure includes a specialized Shenzhen IP court, the Shenzhen Intellectual Property Protection Center, the South China High-Tech IP arbitration center, two IP forensic institutions, and top intellectual property service providers and law firms.

Understanding the ongoing economic development of Shenzhen and the surrounding Great Bay Area, and the corresponding growth in IP and IP protection systems, is of critical importance to an ever-expanding list of industries. Here are some key considerations:

  • The Great Bay Area: In 2019 the China Central Government outlined a development plan for expanded geographic region known as the Great Bay Area. The development plan covers an 11-city cluster, including the special administrative regions of Hong Kong and Macao, and nine cities in Guangdong Province, including Shenzhen.
  • COVID-19-Related Opportunities: The pandemic has accelerated development of numerous technologies, including telemedicine; artificial intelligence; big data focused on diagnosis, tracking and tracing; online education, entertainment and gaming; e-commerce; and remote working solutions.
  • Life Sciences Set to Flourish: The next wave of growth likely will focus on the life sciences. Expect to see advances in medical devices, pharmaceuticals, and biotech. Shenzhen’s neighboring city, Guangzhou, is home to elite universities and research institutes, and has become a biopharmaceutical hub as China emerges as the world’s second largest pharmaceutical market. 
  • IP Litigation: Shenzhen’s businesses include many of China’s most successful companies, making them frequent targets for litigation in US courts. With the dramatic increase in international patent applications out of Shenzhen, expect to see more assertions of patent rights by Shenzhen business organizations, in both US and Shenzhen-based Chinese courts.

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