Swiss agrochemicals firm Syngenta has won a lawsuit against two Chinese companies that infringed patent laws by selling one of its insecticides without permission.
The ruling is seen in some circles as a sign that the Chinese authorities are making more efforts to protect intellectual property rights.
Syngenta is one of a number of foreign investors in China taking more aggressive legal steps to crack down on what they see as blatant copyright and patent infringements.
“Syngenta is on constant alert for any activities that infringe its intellectual property rights and will vigorously pursue all administrative and legal remedies against those who violate [these] rights,” the company said in a statement released on Monday.
“Syngenta believes that, by so doing, it can best ensure the quality of its products and thereby protect the interests of farmers in China and other countries.”
Syngenta filed the lawsuit against two Chinese companies, Yancheng Luye Chemical and Yancheng Yongli Chemical, for infringement of its Chinese patent on a new-generation insecticide, Thiamethoxam.
Under the terms of the agreement, the two companies have undertaken to respect Syngenta’s patent rights and to stop producing or selling Thiamethoxam.
They have also issued a written apology to Syngenta and agreed to pay unspecified damages, as well as legal expenses.
The Basel-based firm said that it would work closely with the Chinese government and industry counterparts to improve market regulations and the general business environment.
Swiss lawyer Paul Thaler, whose company – Wenger, Vieli, Belser – has offices in Shanghai, Beijing and Taipei, told swissinfo that one successful court case was unlikely to have much impact on the protection of intellectual property rights in general.
Thaler said that China had already subscribed to all major legal conventions in this respect and that the real problem was one of administrative implementation.
He added that in many cases, individual Chinese courts or legal officials made decisions based on a desire to protect local companies.
Thaler pointed out that many officials in China felt, with some justification, that international intellectual property laws had been drafted primarily for the benefit of developed countries.
But he said the situation had improved considerably in recent years, particularly since China joined the World Trade Organization in 2001.
swissinfo, Chris Lewis
Syngenta is a worldwide leader in crop protection, with 2003 sales totalling some $6.6 billion (SFr8.4 billion).
Its activities in China comprise three joint ventures, two fully-owned foreign enterprises and several representative offices.
Thiamethoxam is a new-generation insecticide developed and introduced by Syngenta in 1998.
Syngenta has won the backing of a Chinese court for its patent protection case against two Chinese companies.
The firms, which Syngenta accused of illegally selling its patented insecticide, Thiamethoxam, have agreed to stop doing so and to pay damages.
Syngenta is one of several companies taking an aggressive legal approach to infringements.