China Business Law Association – New York Upcoming Meeting with Chinese IP Delegation in NYC

This announcement is from the Chinese Business Law Association in New York City (http://cblalaw.org/):
Join a very high-level PRC delegation for a roundtable discussion on IP legislative developments:
 
The delegation includes:
  • Members of the Ministry of Commerce, including the Americas division, the Law and Treaties Division and the IP Leading Group.
  • Two Judges from the Supreme People’s Court
  • Standing Committee of the National People’s Congress, Deputy Directors of the Legislative Affairs Commission
  • State Administration for Industry and Commerce, Director of Division of Anti-Unfair Competition
  • Legislative Affairs Office of the State Council
  • Procurator, Supreme People’s Procurate of the PRC
  • Chief Officer, Enforcement Division, National Copyright Administration of China
  • State Intellectual Property Office
  • Chief Officer, Legal Affairs, China Food and Drug Administration
  • Deputy Chief Judge, Beijing No. 1 Intermediate People’s Court

 

Note that I will be moderating this discussion.
 
Co-Hosts:
  • Chinese Business Law Association
  • The Fordham IP Institute

 

NOTE: The delegation speaks excellent English, but translators will also be available.
 
EVENT ONE: AN INTIMATE ROUNDTABLE DISCUSSION AT FORDHAM LAW SCHOOL
Friday, September 19, 2014
4:00 to 5:30 PM
At Fordham Law School, Costantino Room
150 W. 62nd Street, between Columbus & 10th Avenues
FREE but RSVP is required. 
 
EVENT TWO: DINNER AND DISCUSSION
Friday, September 19, 2014
6:00 to 6:30 PM – Social networking
6:30 to 8 PM – Dinner and informal discussion
Seats are very limited.  Please RSVP immediately. 
Attendees will be responsible for cost of their own dinners (approximately $100).  Please bring a check.
 
Register by emailing events@cblalaw.org and specify which event(s) you would like to attend.
 

MofCOM’s September 12 IP Program in DC Covers A Wide Range of IP Developments

Here is a digest of some of the highlights of the half day program hosted by MofCOM on IP in Washington DC on September 12.

The Supreme People’s Procuratorate gave a useful overview showing the policy reasons for the big increase in criminal IP cases, including the expanding role of the procuratorate.

SIPO underscored the increase in its examiners and the decreasing pendency periods to 22.2 months.   SIPO has also conducted a social survey which showed a relatively high approval rating of its procedures (81.8%).

The Chinese side did not address the foreign-related impact of the Specialized IP courts. However the low foreign utilization of the civil IP system was generally acknowledged.

Regarding the new TM law, procedures for auditory marks was discussed, oppositions for non use, and changes in the recordal system for licenses. SAIC was careful to underscore that its recordal system did not require submission of business confidential information.   SAIC also discussed the changed provisions for liability by reasons of “providing convenience” to infringement, including storage, transportation, mailing, printing, concealing, providing a business premises and providing an on-line goods trading platform.

SAIC also noted that the TM law also sought greater coordination with other laws, including the anti-unfair competition law and criminal laws. For example, it provided support for demonstrating “intentionality” in  TM infringement when other indicia, such as trade dress infringement, are present.  Chinese IP Attaché Chen Fuli also noted that a key provision of the new TM law was its including of concepts of honesty and credibility into the TM system, which were borrowed from the civil law.

The National Copyright Administration noted that there were now at least 632 million Internet users in China, and 527 cell phone users, with 2,730,000 websites. NCA also noted that there were widely differing opinions on the types of amendments that were necessary for the copyright law.  In revising the law to address recent developments, NCA was looking at earlier State Council regulations on on-line liability, and recent civil and criminal JI’s.  NCA also noted that the on-line “Sword Campaign” resulted in 201 cases sent to criminal referral.  In addition NCA was supervising 25 websites for their content of top movies, and TV programs.  In NCA’s view, music and published works were continuing to experience significant problems, and NCA hoped to address these through a black-list system.  Also, NCA noted that many IP addresses for companies that were subject of its enforcement campaigns were located overseas, including in the US.

The Leading Group reviewed its numerous, generally successful, efforts at improving coordination on IP enforcement, including its recent campaigns. Unfortunately, its special campaign on trade secrets had only resulted in 21 administrative enforcement cases in the first half of 2014.

Regarding China’s sui generis system of GI’s, AQSIQ noted that this system was based on China’s Product Quality Law, and was initially implemented in 2004 by the Department of Science and Technology of AQSIQ. AQSIQ noted that relevant rules governing operation of the sui generis system included the Provisions on Protection of Geographical Identity Products, and the Working Rules on GI Product Protection, which provide for opposition and cancelation of GI applications.  Describing GI’s as a “public rights” system, AQSIQ also noted that it has set up a  GI working group, it has started work on a GI products encyclopedia,  it had promulgated over 1000 standards for GI products,  and that it had set up exemplary zones for GI products..  AQSIQ also noted that NAPA Valley had secured GI protection in China.  Its GI application was published in August 2011 and there had been no opposition to it.

Altogether, it was a useful and informative program.

Full disclosure: I co-moderated the program, although this summary represents my personal views only.

FTC Chairwoman Ramirez on China’s Approach to Licensing Standards Essential Patents in China

Federal Trade Commission Chairwoman Ramirez recently delivered a speech on  “Standards-Essential Patents and Licensing: An Antitrust Enforcement Perspective at Georgetown University’s Global Antitrust Conference” (Sept. 10, 2014).    Here’s what she said about China:

“In contrast to the FTC’s and EC’s approach, media reports indicate that China’s antitrust authorities may be willing impose liability based solely on the royalty terms that a patent owner demands for a license to its FRAND-encumbered SEPs, as well royalty demands for licenses for other patents that may not be subject to a voluntary FRAND commitment.

I am seriously concerned by these reports, which suggest an enforcement policy focused on reducing royalty payments for local implementers as a matter of industrial policy, rather than protecting competition and long-run consumer welfare.

As I have stated previously, here and elsewhere, I am of the firm belief that consumers are best served when competition enforcement is based solely on sound economic analysis of competitive effects. A contrary approach risks damaging the investment incentives that are critical to continued growth in many of today’s global technology markets, in the ICT sector and beyond. We intend to continue to engage with our counterparts in China and around the world on these issues, in an effort to build consensus on policies that will benefit competition and consumers globally.”

Here is the link to the full text of the speech.

 

In an unrelated development, Deputy FTC Commissioner Marueen Olhausen was reported by the Chinese press as cooperating in a “joint siege” (共商围剿) on “Patent Troll” companies, with the Chinese, European and Korean enforcement agencies, at an antimonopoly law conference in Seoul, Korea on September 4 which focuses on Patent Assertion Entities.  At that conference, NDRC’s Xu Kunlin reportedly discussed  “problems arising from bringing enforcement actions against patent trolls companies” with foreign competition enforcement counterparts.   Xu also reportedly discussed enforcement actions against holders of SEP’s involving bundling of patents, including licensing of expired patents.

Of course, patent trolls have some history in China, as I have previously noted.  The Chinese press noted that Olhausen referred to the FTC’s on-going research into this area.

Xu Kunlin also took the opportunity to respond to criticisms of selective enforcement of China’s AML law against foreign companies. (update posted Sept. 14, 2014)

 

UK Concludes Week of IP Activities in China

Both the United States and the UK just recently concluded a week of activities on IP issues.  Here’s a summary of the UK activities:

Baroness Neville-Rolfe,  the UK Minister for IP, led a large delegation and series of activities that covered 8 cities (Beijing, Shanghai, Hangzhou, Suzhou, Nanjing, Guangzhou, Chongqing and Hong Kong) in 4 days. The delegation attended the 2nd UK-China IP Symposium in Beijing, which was attended by 180 companies from the UK and China, as well as a High Court judge, and officials from the UK Intellectual Property Office (IPO).  SIPO Commissioner Shen Changyu opened the Beijing program.

The speech by Baroness Neville Rolfe is worth reading. It emphasizes some of the science and technological cooperation between China and the UK, including scientific citations and the Newton Fund for further developing science and technological cooperation. The speech also talks about joint criminal enforcement and other cooperative efforts, as well as how “good collective licensing can contribute hundreds of millions to the economies of both the UK and China.”  Minister Rolfe also highlighted four areas where UK businesses thought that worked well in China: border detentions by China Customs; sophisticated judgments in the Chinese courts; enforcement of IP rights at trade fairs in China and the transparency and openness to stakeholder input during recent legislative reforms

Agreements were also signed, including between the China Britain Business Council with Alibaba Group, covering IP protection on the Alibaba and Taobao sites, and between the UK Copyright Licensing Agency and the China Written Works Copyright Society on collective licensing cooperation.

The program also included extensive government to government meetings at the central and provincial/municipal level, including a bilateral with State Councillor Wang Yong which made the CCTV1 evening news. Here are some links to news reports:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/353057/China_IP_Newsletter__IP_Symposium_Special_Edition_.pdf

http://www.britishchamber.cn/content/uk-china-ip-symposium-week-held-successfully-across-china

Last week, the United States hosted the bilateral JCCT IPR Working Group in Washington, DC.  The Ministry of Commerce also hosted a bilateral cooperation forum.  More on the forum in my next blog.

Thanks to Tom Duke, the UK’s IP Attache in Beijing for pointing out these UK activities to me!

Withering Problems in China’s Patent Drive? – The Latest from SIPO

SIPO’s six month report on patent filings, available on line in China shows some surprising data for the first six months of 2014.

Regionally, Jiangsu and Beijing are in the number 1 and 2 slots in terms of patent applications.  Both regions showed continued growth (slide 3).  Guangdong, however, showed a slight decline.  Anhui, Guangxi and Guizhou showed the most increase in patent applications in percentage terms (70-90%).  Interestingly, while invention patent applications increased by about 4% from domestic applicants, foreign applications were down about 11% (slide 9).  In general, increases in  Chinese-origin invention patents applications in China were not offset by decreases in utility model and design patents, with an overall decrease of 8 percent for Chinese versus a 2% overall increase for foreigners.

In terms of patent grants, amongst foreign countries, the United States showed an increase of 12% from the same period last year, while Japan and Germany (number 1 and 3, respectively amongst foreign filers), both showed declines of about 4.5%, as reflected in the following chart:

foreignpatentrates

In this chart, the orange and blue bars represent 2014 and 2013 respectively.  Japan, the USA , Germany, Korea and France are the first countries listed to the far left on the x axis.    The y axis reveals the number of granted invention patents in 2014.  The chart shows that patent grants were down for all three top foreign applicants for the first half of 2014 (by the percentages at the top of this graph). However, this could be due to drops in applications from several years prior.

The problem of low maintenance rates for Chinese-source patent applications also remains acute.  As I have previously blogged, China already shows lower patent maintenance rates than other IP-5 jurisdictions.  This report makes it clear that Chinese filers appear to be the predominant parties in China who prematurely curtail patent protection (p. 15).

patentmaintenance

The green line represents domestic patent filers; the orange line is foreign patent filers.  The x axis shows the year of the patent, through its 20th year, while the y axis shows percentage of patents filed.  The close-up image in the upper right corner is of SIPO’s own preparation.

The report also identifies Beijing as the city with the highest density of patents per capita (nearly 5,000 per million people).  Shanghai and Tianjin follow.  This further underscores that innovation is an urban phenomenon (page 17).  Guangdong also remained the main filer of PCT applications with nearly 6,000 applications — outpacing second place Beijing with about four times the number of applications (p. 25).

Some of the more dramatic changes are in utility model patents and design patents.  UMP applications from China dropped by 7.5% and design applications dropped by 28%.  The most dramatic drops were in non-service applications for UMP’s and in service inventions for designs (24.5% and 34.9% respectively).  However, foreign applications for UMP’s and designs continue to grow from a modest base (p. 29).   Non-service inventions still play a large role in China’s domestic utility model and design patent application portfolios (about 26.4% and 50.7% respectively).

 

In summary, the data shows continuing dramatic changes in China’s patent system, including shifting trends amongst domestic and foreign filers.  My guess is that the report shows the impact of an increased focus on invention patents by the government, and a decline in subsidies for utility model and design patents in key patenting regions.  The increase in service inventions for UMP’s is significant as it may show a shift to patenting in UMP’s for enterprises that actually practice the invention.   The rapid increase in regions like Anhui may be due to active government support in those regions.  The drops in patent filings for foreigners are surprising considering China’s continuing economic growth.  The report also underscores a predictable rise in China’s cities as centers of patenting activity.  Although individual PCT filers are not identified, the growth in PCT filings is probably to continued growth of companies like Huawei and ZTE from Guangdong.

Loyola – Los Angeles Hosts US-China IP Summit November 7

Loyola University Law School is hosting the third annual US-China IP Summit November 7.

Here is how Loyola describes the conference:

“The 3rd US-China IP Conference will bring together senior policymakers, academics and international practitioners from China and the U.S. to discuss five important topics:  (1) Revisions to the US and Chinese Copyright Law; (2) IP issues related to the entertainment industry; (3) Role of specialized IP courts; (4) Updates on patent and trade secrets legislation and protection; and (5) Challenges and strategies in cross-border IP enforcement.

The conference is an annual event co-hosted by Loyola Law School, Los Angeles, Berkeley Center for Law and Technology and China Renmin University IP Academy.  Loyola Law School is proud to be the hosting site for the 2014 US-China IP Conference.

The conference draws professionals from business, legal and entertainment industries who want to hear from prominent speakers and experts from both the US and China about cutting edge intellectual property and related issues.  Optional: Four hours of MCLE available. Loyola Law School, Los Angeles is a State Bar MCLE-approved provider.”

Here’s the link:  http://www.lls.edu/resources/events/listofevents/eventtitle,89748,en.html.

 

 

ABA Comments on Patent Judicial Intepretation (2)

The American Bar Association has released its comments on the recently released draft judicial interpretation (JI) on patent litigation, no. 2, available here. Articles 1, 10 and 24 deal with patent law matters and were prepared by the ABA’s Sections on Intellectual Property Law and International Law.   The Section on Antitrust Law joined only in comments on Articles 27 and 30, which deal with standards setting and compulsory licensing/denial of injunctive relief. The ABA as a whole did not join in commenting on this JI.