By Martin Medeiros
The western world contrived the primogenitor of intellectual property law protecting innovation in 500 BC, with modern concepts emerging in the 12th and 13th century in present day England and Italy. For copyrights, we note petroglyphs of the handprint of cave artists in Europe as well as Australia, perhaps a form of copyright attribution. Thomas Jefferson, realizing how primitive post-colonial United States creativity was, ensured intellectual property was at the forefront of the U.S. Constitution in Article 1, Section 8: “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” The Jeffersonian strategy worked.
Contrasting New Chinese IP Law
Outside of arguable forms of IP rights like those in Lascaux, comparatively, China’s IP law essential started in the 1980s with China’s entry into World Intellectual Property Organization (WIPO). China joined the Paris Convention on March 19, 1985. That same year, the General Principles of Civil Law in which very basic rules regarding copyrights, trademarks and patents were laid down. In 2001, significant improvement triggered by The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The milestones in Chinese IP law include:
- Patent. April 1, 1985, the State Patent Office started to accept patent applications, and on that day 3455 patent applications from domestic and foreign applicants were filed. On January 1, 1993 effective date, the 1992 Amendments provided patent protection for medicine, chemical material, and food. Two flavors: invention patent’s monopoly extended to 20 years, and the term of utility model and design patent monopoly extended to 10 years.
- Trademark. March 1, 1983, Trademark law becomes effective, Chinese Trademark Act was passed in 1982.
- Copyright. June 1, 1991 Chinese Copyright Act came into effect on June 1, 1991.
- Trade Secret: 1993 Anti-Unfair Competition Law Articles 10, 20, 25 • Interpretation of the Supreme People’s Court on Some Issues Concerning the Application of Law in the Trial of Civil Cases Involving Unfair Competition (2007) Article 11-17.
- Criminal laws augmented in 2004 for infringement and amendments in 2015.
- Anti-Unfair Competition Law substantially strengthens trade secret protection in the civil and administrative proceedings in 2017 .
The 2018 Trade Sanctions
Much of the trade war deals with various policies and the issue is not about tariffs, but about IP. In 2017 “China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation” was best encapsulated in CSIS’s Deputy Director Scott Kennedy’s statement:
China’s core strategies and policies toward IPR [intellectual property rights] are not rooted in an unbending commitment to rule of law, but rather by a plan to promote industrial upgrading and technology acquisition that results in Chinese companies occupying higher rungs of the value-added chain across the full spectrum of industries both in China and in other markets.
This is not shocking, Chinese government stated as much in June 2008 when it published their National Intellectual Property Strategy (among others), which provides a detailed roadmap to how China plans to become one of the world’s most innovative countries by 2020. The aim of encouraging domestic innovation. Their past fast and loose IP strategy has failed as they have not yet effectively entered most western markets for various goods, such as cars. The response from the U.S. was muted, until last month.
At the end of the day, nothing does China should surprise. In the 1500 year old tome The 36 Strategies, methods of deception in transactions are described in loving detail. This book deals with methods of deception in transactions. Ironically, many of the precepts of the current administration’s strategies seem to be coming from this book.
Negotiation via Bureaucracy: Challenges for Westerners Will Remain for Years Due to China’s IP Complexity
Four different levels of law and nine different agencies deal with intellectual property laws and related subject matters in China as generally tabulated by Liguo Zhang:
|Agency Counter||Right Protected||The responsible governmental department|
|1||Patent, integrated circuit layout||State Intellectual Property Office|
|2||Trademark||The Trademark Office of the State Administration for
Industry and Commerce
|3||Copyrights||State Copyright Office|
|4||Unfair competition / Trade Secrets||Antimonopoly and Anti‐unfair Competition Enforcement Bureau of the State Administration for Industry and Commerce|
|5||Geographical indications||general administration of quality supervision, inspection and quarantine|
|6||Agricultural Plant varieties||Ministry of Agriculture|
|7||Forestry Plant varieties||State Forestry Administration|
|8||IPR matters in the international
|Ministry of Commerce|
|9||IPR cross border transaction||General Administration of Custom|
There are four levels of Local Government Units: 1) province, autonomous regions, direct‐controlled municipalities; 2) municipality or prefecture; 3) county, city or district; 4) town. China has 22 provinces, five autonomous regions, four direct‐controlled municipalities. This may look far from the U.S. but it is not that far off. The issue China is the master of negotiating via bureaucracy.
Contrast with the United States: State and Federal Courts that here claims and filing and limited administrative claims in Federal Patent and Trademarks – USPTO; Copyrights – Library of Congress (Copyright Office); Trade Secrets (Federal Defense of Trade Secrets Act and State level Uniform Trade Secret Acts); Remedies generally in Federal and State Courts.
Why China Blinked
Among onerous laws are the requirement of controlling Chinese ownership in ventures directed in the Chinese market and the requirement to transfer technology when accessing the Chinese market. This was not a winning strategy, given China’s inability to exploit world markets in various goods. But this is a long march, concessions announced on April 17, 2018 will not happen soon and a sprint to meet the leader in innovation in 2020 is a noble goal, but will not be realized unless the intellectual property walls are open and rights enforced expeditiously as they are in western nations.
Introduction to Intellectual Property Protection in China by Liguo Zhang The Trademark Act(adopted 1982, amended 2001)
- The Patent Law (adopted 1984, amended 2008)
- The Copyright Act(adopted 1990, amended 2001)
- The Computer Software Protection Regulation (adopted 2002)
- The Regulations for the Protection of New Varieties of Plants (adopted 1997, amended 2013)
- The General Principles of Civil Law (adopted 1987)
- The Contract Law (adopted 1999)
- The Property Law (adopted 2007)
- The Regulation for the Protection of Integrated Circuits (adopted 2001)
- The Science and Technology Promotion Law (adopted 1993, amended 2007)
- The Promotion of Commercialization of Scientific and Technological Achievements (adopted 1996)