That a company in Shenzhen was ordered to pay a total of 6 million yuan ($860,000) in compensation to MGM Holdings for infringement of the latter's trademark and unfair competition last week indicates that China means what it says about the protection of intellectual property rights.
MGM Holdings filed two lawsuits against Shenzhen MGM Films Company in South China's Guangdong province for unfair competition and trademark infringement, as the Chinese company was using the name MGM and its lion logo and had even authorized more than 30 theaters across the country to operate under the brand name and logo. The Shenzhen company was ordered to pay 3 million yuan in compensation in each of the two cases, the maximum under Chinese law.
There have been similar cases recently in which Chinese enterprises were ordered to pay the maximum amount of compensation to foreign companies whose trademarks they were ruled to have infringed upon.
Foreign companies can be confident that China means what it says when it comes to the protection of intellectual property rights as it is earnestly striving to improve its business environment, as evidenced by the law on foreign investment which came into effect on Jan 1.
