Entry Level Position at the WTO Secretariat to Work on TRIPS Matters

The TRIPS Division of the WTO Secretariat is seeking candidates for an entry level position for people interested in working on the intersection of international intellectual property rules and trade in the general context of public international law. The deadline for applications is December 5, 2013.

Applications should be filed online here.  Attached is the vacancy announcement, as well as an overall description of the WTO compensation package.

Ministry of Commerce IP Program in DC December 5

Chen Fuli, IP Attaché at the Chinese Embassy in Washington, DC the morning of December 5.   The program is free of charge, but seating may be limited.   You should RSVP at: lishuai@mofcom.gov.cn.

The topics are all ones that I have actively followed in this blog.  Here is the tentative agenda:

International High Level IPR Cooperation Forum

Dec 5,  Georgetown Holiday Inn

2101 Wisconsin Ave, NW, 20007, Washington DC

 9:00-9:20  Opening remarks, by Both China and U.S. Representatives

 9:20-9:40   New developments in IP enforcement in China, by Director Jing Zhang from the Office of Fighting Against IPR Infringing and Making or Selling Counterfeit and Shoddy Products under the State Council

9:40-10:00  New amended Chinese Trademark Law, by Deputy Director General Qing Xia from CTMO

 10:00-10:15 Q & A

 10:15-10:30 Coffee Break

 10:30-10:50  Amending of Chinese Copyright Law by Deputy Director Ping Hu from NCAC

10:50-11:10  Amending of Chinese Patent Law and Regulation on Service Invention by director Yanhong Wang from SIPO

11:10-11:30  New practice of IP trials after the amendment of Chinese Civil Procedure Law by Judge Yuanming Qin from SPC

11:30-11:50 Q & A

11:50-12:00 Closing Remarks

—————-

12:00-13:30                    Lunch (hosted by China for all the participants)

In addition to the speakers noted above, there will also be Chinese official participants from public security, Customs, procuratorate, AQSIQ and other agencies, which should help make for lively discussion and interaction.  I hope to see you there!

Qualcomm Subject of AML Investigation – Other Developments on the Way

China’s use of the Antimonopoly Law to deal with pricing for royalties may have taken another turn with recent launch of an Antimonopoly Law investigation by the National Development and Reform Commission against Qualcomm. Although the exact basis for the investigation is unknown, the press reports speculate that the investigation is related to the forthcoming launch of TD-LTE by China Mobile in early 2014 as well as negotiations on chip and licensing pricing between Qualcomm and China-based companies.

Qualcomm announced the case on Monday November 25. The investigation has been covered in several articles in Reuters as well as other press sources, including the Chinese press. An NDRC spokesperson was quoted in China’s official press on Sunday November 24 that China’s AML authorities would focus on six areas of technology and pharmaceuticals. Some observers have also tied the case to the impactful recent Huawei-Interdigital case(https://chinaipr.com/2013/10/29/huaweiinterdigital-appeal-affirms-shenzhen-lower-court-on-standards-essential-patent) adjudicated in Guangdong, which also involved standards and royalties.

In separate developments, at a conference sponsored by China’s Ministry of Industry and Information Technology that I attended in Beijing on November 13, it was announced that the State Administration for Industry and Commerce will be revising its rules on AML and Intellectual Property. Last August a draft revision to its IPR enforcement guidelines was floated selectively for public comment(https://chinaipr.com/2012/08/26/a-quick-read-of-the-aml-ipr-enforcement-guidelines-fifth-draft/). Additionally, at this November 13 conference, the Supreme People’s Court noted that it would be looking into revising its judicial interpretation on patent infringement regarding availability of injunctions, presumably to make injunctions less automatic (or presumably, denied) in the case of standards-essential patents.

There are some areas where there appear to be less momentum, at least for now. I am unaware of any public initiative to deny orders stopping infringement in the case of standards-essential patents and administrative patent enforcement. In addition, I am unaware of any public request to date for an administrative compulsory license of patents through the State Intellectual Property Office for an antitrust violation or a refusal to license. To judge by the recent MIIT conference, there is also no active discussion on patent “hold-out” for refusal of a licensee to take a license under a standards-essential patent, and what that would mean in the Chinese context, where damages are low in litigation, injunctions are almost always granted, the state plays an active role in standardization, the statute of limitations is short and China’s equities as a patent holder and manufacturer are in flux. Also, noticeably absent from the November 13 program was Ms. Dai Hong from the Standards Administration of China, who had been active on these issues for SAC – an agency which had been relatively active on these issues some years ago. Please send in your comments if you know of other developments.

Overall, China’s ramp-up on AML is not unlike its ramp up for other disruptive economic laws, such as the bankruptcy law. Frequently these laws are enacted for “trial implementation” or alternatively they are not actively enforced until after regulators and the public have had time to become familiar with the laws and their implications and/or the political timing is “ripe.” It will be very interesting to observe future developments.

Through a Glass Less Darkly: China’s March to Administrative Enforcement Transparency

Poster Describing AQSIQ Enforcement Against Making/Selling Shoddy Products - Beijing

Poster Describing AQSIQ Enforcement Against Making/Selling Shoddy Products – Beijing

On November 20, the State Council, at an executive meeting chaired by Premier Li Keqiang, approved the “Opinion on Making Publicly Available According to Law Information on Administrative Penalties Concerning the Production and Sale of Fake, Counterfeit and Sub-standard Goods and Intellectual Property Rights Infringement” (关于依法公开制售假冒伪劣商品和侵犯知识产权行政处罚案件信息的意见). While, ironically, the opinion is not yet available on line, a statement released after the meeting said:

“The publication of such information [on administrative enforcement of IP] should be an important part of the government information disclosure requirements. Except for trade secrets and privacy considerations, the publication requirement should be self-initiated and apply generally to procedures for public disclosure of information regarding investigation and handling of all administrative punishment cases. Administrative enforcement officials should disclose information on the case according to law within the determined time frames for the determination of the punishment or a change in the punishment。

Published information should include the principle facts of the determination of illegality, the type of penalty, the basis for the decision and the results. This should be open and transparent, and there should be prompt replies to social concerns. Further, relevant administrative penalty information should be included in the social credit system so as to create “omnipresent constraints” on the creditworthiness of counterfeiters and infringers.

Administrative enforcement officials should strictly impose punishments according to law, and implement their responsibilities. Every level of government should promptly establish complete management and accountability systems, and strengthen supervisory investigation. We shall continue to correct with strict accountability to enable societal supervision for administrative enforcement for those who do not implement their responsibility to disclose information, who do not disclose in a timely fashion, who alter contents, who obtain payments against the laws, etc.”

Here it is in Chinese: http://www.gov.cn/ldhd/2013-11/20/content_2531230.htm.

The transparency contemplated by Premier Li may yet prove challenging to achieve for administrative IP and IP-related actions. The number of IP administrative cases (patents, trademarks and copyrights) is in excess of 100,000 at this time. If one included “substandard” goods, and other quasi-IP enforcement, for the full range of Chinese enforcement actors, the numbers could easily exceed 200,000 – including the enforcement regimes of SAIC (trademark, but also consumer protection, and antitrust), AQSIQ, SFDA, Ministry of Culture, SARFT/GAPP, Tobacco Monopoly, Chinese Customs, City Management (Chengguan), Police, etc.

One also hopes that these transparency efforts can also improve the administration of antitrust cases involving IP, where both general data as well as case-specific information is often lacking. It is also hoped that non-confidential versions of cases involving confidential information can be made available, even if there is confidential information in a specific case.

It is remarkable to think how far the quest for administrative transparency in IP has progressed since China joined the WTO. The TRIPS Agreement, Article 41 provides: “Decisions on the merits of a case shall preferably be in writing and reasoned. They shall be made available at least to the parties to the proceeding without undue delay.” Back in 2004, at the Trade Review Mechanism of the WTO, the Chinese delegation was asked to provide copies of its enforcement decisions. The response was: “Regarding obligations of administrative agencies to provide written decisions with interpretations for their enforcement decisions, [the Chinese delegate] said that his delegation believed that this question was not relevant to the IPR system and that his delegation was not obliged to answer it here.” TRIPS Council Meeting of December 1-2, 2004, IP/C/M/46 (11 Jan. 2005). The statement was repeated in a similar fashion later in 2005: (TRM, IP/C/39, p. 4 (21 Nov. 2005). The US requested a summary of China’s enforcement cases in its so-called “Article 63” request, which included information of the type that Premier Li is now requesting – information on the legal basis, remedies, location, year, competent authority, type of product, transfers to criminal authorities, and whether foreign nationals were involved, which was never provided (IP/C/W/461, Nov. 14, 2005).

Premier Li’s perspective reflects a general trend towards greater transparency, which he has now accelerated. For example, when a concern over transparency was also voiced by former USPTO Director Kappos in the context of SIPO’s more expansive role in administrative enforcement, SIPO Commissioner Tian responded in September 2012: “SIPO attaches great importance to the enhancement of the transparency of the administrative enforcement, as well as the importance of ensuring its openness, fairness and impartiality.”

Along with the legal reforms of the Third Plenum and other changes from the Supreme People’s Court under Zhou Qiang, these are signals suggesting deeper roots for China’s legal reforms, particularly in China’s omnipresent administrative system.

The End of Year Hook in Administrative Patent Enforcement?

Along with Prof. Zhen Lei of Penn State, I have previously blogged about the late autumn surge in patent filings in China, in 2012, as well as in prior years.  This autumnal hook likely arises in response to subsidies, quotas or other support that must be exhausted before year end.

During a recent visit to China, I had an opportunity to talk about similar trends in patent administrative enforcement.   For the past two years, there appears to be a year-end uptake in patent enforcement:

  Infringement Disputes Other Disputes Patent Passing-off Total
2004 1414 66 1689 3169
2005 1360 132 2409 3901
2006 1227 43 966 2236
2007 986 27 713 1726
2008 986 27 713 1726
2009 937 26 578 1541
2010 1077 18 728 1823
2011 1286 27 1704 3017
2012 2225 268 6512 9005
2013 (mid-year) 1074 129 2633 3836

Here is what it looks like in graph form, with data ending at September 2013, on an annualized basis the totals would be 19,118:

Image

Why has there been such a sudden uptake in year-end administrative enforcement?  One explanation is an end of year rush to accept or resolve cases to show increased efficiency and impact.  On the converse side, the data also shows a significant drop in activity around holiday seasons, especially spring festival in January/February.    These factors may apply across the board to many forms of Chinese government activity.

Looking to policy factors, on June 28, 2011, SIPO announced a special campaign involving patent administrative patent enforcement.   However, the campaign did not immediately result in a significant uptake in administrative actions.

What may be more significant is the  August 2012 publication by SIPO of proposed patent law amendments, which provide for an expansion for administrative enforcement and greater involvement by SIPO with IPR as an instrument for “market order”.  These new policies may have precipitated a major uptake in administrative patent enforcement actions, on the assumption that “if you enforce it, they will legislate it”.  In fact, October 2012 was one period of high rapid increase – with enforcement actions increasing 112% from September 2012, followed by a drop in November 2012.

The rapid increase in patent “passing off” (counterfeit patent) cases similarly may also be timed with the patent law amendments.  The amendments contemplate an increased role for SIPO in policing “market order”. Since such cases may be initiated by self -initiated by parties other than the infringer, they may also be more responsive to policy changes by SIPO.  Local governments, such as Guangzhou, may also offer rewards for reporting these activities.  Moreover, the change in the mix of administrative enforcement actions is striking.  From 2006 to 2011 infringement cases dominated. Now patent passing off cases are approximately twice infringement cases.

There may be other factors contributing to this rapid increase, such as enhanced authority of local enforcement agencies.  In addition newly empowered agencies may now be engaged in rent-seeking behavior, such as by seeking revenue from filing fees. Indeed, Premier Li Keqiang identified excessive fee taking as a potential issue in IP administrative enforcement (http://www.gov.cn/ldhd/2013-11/20/content_2531230.htm).

One comparison that does not appear highly relevant is with overseas trends.  An influential article by Zhao Meisheng of SIPO Management Division Enforcement Administration Department  “An Analysis on the Trend and Reasons That US Government Agencies Strengthen Intellectual Property Rights Enforcement” ( 试析美国政府机构加强知识产权执法的态势与原因 – 赵梅生 (国家知识产权局管理司执法管理处)电子知识产权 (Electronics Intellectual Property) (2013, 4)  suggested that administrative patent enforcement is on the increase globally, including the United States.   Comparing “civil” or “administrative” actions in one country to another is often an “apples to oranges” type comparison, nonetheless, “Section 337” actions in the United States, which involve US administrative procedures, are only a very small fraction of Chinese patent administrative enforcement actions, and have been relatively constant over the past several years.
chart3

The growth in administrative litigation does not seem to be linked either with Chinese domestic IP litigation, which has shown steady growth over the past several years.
chart5

(The preceding was adapted from a presentation I gave at the recent Asia Pacific IP Forum sponsored by Renmin University in Suzhou.  The opinions in this blog are my own).