IP in the Xi-Obama Meeting – Following the Data Stream

There wasn’t much IP in the recent meeting of the Chinese and US heads of State at APEC in Beijing, nor should one expect more than a brief mentioning amongst all the other issues that the U.S. and Chinese leadership have to discuss. However there were two points of reference.  One was in the Chinese tabulation of the list of agreed outcomes which stated:

七、双方同意于2015年初举行中国公安部和美国国土安全部部级会晤。双方将利用这一契机深入探讨加强反恐、执法等相关领域合作。双方同意继续在追逃追赃、遣返非法移民、禁毒、打击网络犯罪、加强知识产权执法等领域开展对话与合作。

Essentially this commits the Ministry of Public Security and the Department of Homeland Security to their first Ministerial-level meetings in 2015 to discuss deepening cooperation in enforcement related actions. In addition they agree to dialogue and cooperation in addressing including online crimes and strengthening intellectual property enforcement.

President Obama also noted in the joint press conference that he “stressed the importance of protecting intellectual property as well as trade secrets, especially against cyber-threats [with Xi Jinping].”

This is one instance where the statistical back story supports the respective statements of the leadership.

In China, there has been a big increase in domestic criminal IP cases in China during 2014. In the first half of 2014, the number of all the intellectual property-related criminal cases of the first instance was 5,429,r ising 29.35% over the same period of last year.

In 2013, intellectual property-related criminal cases. of first instance handled by local courts, were reduced by 28.79% to 9,331 cases, including 5,021 infringement cases (3,473 involved infringement of registered trademarks, such as use of counterfeit marks, and 1,484 cases involved copyright infringement).  This drop of 35.96% from the prior year was probably due to the end of a special campaign.

The multi-year trend clearly shows continuing increases in criminal enforcement. Wang Yu(王瑜),an IP lawyer, tabulated the number of IP cases in a recent blog (Oct. 29, 2014), translated here.

From the above chart, the IP-related criminal cases appear to be rising again.  Copyright cases are also rising fast, from 0.6% of 2010 to 39% of 2013.  Trade secret cases, however, are a small percentage and hover around 50 total.

USDOJ data shows that there were about 168 and 178  federal cases filed in 2011 and 2012 respectively. As the data shows, the US federal government has a much smaller litigated criminal IP docket than China.

The data suggests that: (a) China has a comparatively large, and rising docket of criminal IP cases, and (b) the numbers and proportion of Chinese criminal trade secret cases are rather few. The above data, of course, does now reveal qualitative differences, plea bargaining, or how many cases were international in nature, amongst other important differences between the US and Chinese systems..

In sum, after looking at the data, if I were Mr. Obama, I might ask Mr. Xi about improving trade secret enforcement. If I were the Chinese leader, I might ask Mr. Obama about cooperation on criminal IP cases.

And that’s what they appeared to do.

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