January 1 – 15 2018 Updates

Here are some updates on IP developments in China from past two weeks.

1.2017 USCBC Annual Member Survey (English) ­­­­­American companies have seen improved sales performance in China over the last year, but full market access continues to be a challenge for many American companies, according to the US-China Business Council’s (USCBC) most recent annual member survey. Among the top 10 challenges, four focus on technology related issues, which are: (2) Licenses and approvals, (5) IPR enforcement, (6) Cybersecurity, and (9) Data flow barriers.

In addition, tech transfer requirements to gain access to the China market is an acute issue for those who face it; nearly 20 percent of companies in the survey have been asked to transfer technology during the past three years. JV requirements and government approvals provide leverage to China. The request most frequently comes from a Chinese partner, rather than a government entity. Half of the companies surveyed considered this request unacceptable and mitigated the request, but still ended up transferring some technology. Tech transfer itself is not listed among the top ten challenges for 2017, but was ranked 11th in 2014’s survey.

IPR enforcement climbed the ranks to number 5, which was the number 8 challenge in 2016. It was a top tier concern in 2014.  Trade secret, trademark, and patent are the greatest concerns for respondents for IP infringement. Fifty-two percent respondents think that China’s IP protection over the past year remains unchanged.

Related:    State Council cuts red tape for businesses (English); 国务院开年第一会:进一步优化营商环境! (Chinese).  China will work to improve the business environment with measures that further streamline administration and reduce corporate burdens, under a decision made at a State Council executive meeting chaired by Premier Li Keqiang on Wednesday. To further improve the business environment, the government will prioritize cutting red tape, taxes and fees.  Enterprises of various ownership structures will be treated the same way in qualification and approval, government procurement, major projects in science and technology and standards setting. Properties of various types will receive equal protection, and more efforts will be made to protect intellectual property rights.

2.  China Sees Double-Digit Increase in Invention Patent Applications (English).  2017年知识产权事业发展量质齐升 (Chinese).  China made 1.38 million invention (utility) patent applications in 2017, a 14.2 percent increase year on year. Of the total applications, 744,000 patents have been examined and concluded, said Shen Changyu, Commissioner of the State Intellectual Property Office. Under the Patent Cooperation Treaty, a total of 51,000 international patent applications were received in 2017, up 12.5 percent from the previous year. The number of invention patents on the Chinese mainland reached 1.35 million, meaning that for every 10,000 people there are 9.8 patents on average. It’s getting closer to the goal set by the 13th Five-Year National Intellectual Property Protection and Application Plan, which is 12 patents every 10,000 people by 2020. About 67,000 administrative patent cases were handled last year, increasing by 36.3 percent on a yearly basis.  Related:  Head of SIPO Shen Changyu delivered a work report on 2018 National Intellectual Property Office Heads meeting 申长雨在2018年全国知识产权局局长会议上的报告(摘编) (Chinese).

3.SIPO and Ministry of Education Jointly Released Notice on “Construction of Colleges and Universities Intellectual Property Information Service Center” 国家知识产权局办公室 教育部办公厅关于印发《高校知识产权信息服务中心建设实施办法》的通知 (Chinese).    Colleges and Universities in China are encouraged to establish intellectual property information service center. Those centers will collect and analyze information on intellectual property for a university, build an IP information sharing platform, and advise on IP related matters. SIPO and Ministry of Education will provide guidance and support for the construction and operation of those centers.

4.China Beefs Up Cyber Defenses with Centralized Threat Database. China said on Wednesday it will create a national data repository for information on cyber attacks and require telecom firms, internet companies and domain name providers to report threats to it.

5.ZTE Settles in Multi-Defendant Cellphone Patent Suit(English), 中兴与NPE和解;韩国法院将可用外语审理知产案件 (Chinese).  Chinese telecom company ZTE Corp. is settling in a consolidated IP suit from a licensing company that also accuses Apple, Motorola and other mobile heavyweights of infringing on data transfer patents, according to dismissal papers filed in Texas federal court on Wednesday.   Related:  ZTE: NPE Battleground Moving from US and Europe to China! (English).

6.Ford China Fails TM Lawsuit, Changes Mustang Brand Chinese Name.  Recently, Intermediate People’s Court of Chengdu City of Sichuan Province adjudicated in the first trial that Ford Motor (China) Ltd. (Ford China) should cease further infringing the trademark Yema owned by Sichuan Yema Automobile Co., Ltd.  Yema means wild horse (mustang) in China.

7.China Becomes One of the Top 5 U.S. Patent Recipients for the First Time. Chinese inventors received 11,241 U.S. patents last year, a 28 percent increase over the same period in 2016, according to a report released Tuesday by IFI Claims Patent Services. That propels the nation into the top five recipients for the first time, behind the U.S., Japan, Korea and Germany, but ahead of Taiwan.

8.Alibaba Listed as Notorious Market, Hits Back over Blacklist. The Office of the US Trade Representative has blacklisted Alibaba’s popular online shopping platform Taobao again this year over its problem with fake goods. According to USTR’s 2017 Out-of-Cycle Review of Notorious Market, Alibaba presented its  considerable efforts to address many concerns identified in the 2016 List, but important unresolved concerns remain. Alibaba was requested to take more effective means to address the full range of U.S. business concerns.  Related:  Notorious Markets, Alibaba and the JSP (Comments on 2016 list of notorious market), US blacklist of e-commerce sites ‘protectionism’. 

9. SAIC investigated 21,000 infringement and counterfeiting cases工商总局查处1万假冒案件 (Chinese). SAIC has prosecuted 21,000 trademark infringement and counterfeiting cases in the first 11 months of 2017. This number went down comparing to prior year, which was 25,000 in the first 11 months of 2016.

10. China customs pushes int’l rules on cross-border e-commerce (English), 我国将推动制定世界海关跨境电商国际规则 (Chinese). China’s General Administration of Customs (GAC) is helping to draw up a standard framework for cross-border e-commerce to regulate the sector. The GAC is pushing for the formulation of international rules on cross-border e-commerce of the World Customs Organization (WCO), according to GAC official Zhao Ruxia.

MIIT interviewed three companies including Alipay 工信部约谈支付宝等三家企业 (Chinese). MIIT interviewed Baidu, Ant Finance (Alipay) and toutiao.com regarding their reported violation of user privacy. MIIT found that all three companies had not adequately informed users on use of personal information and rules of collecting personal information and requested those companies to address those issues immediately.

12. Huawei defeats Samsung in patent battle (English), 华为vs三星,华为胜!(Chinese). Chinese tech giant Huawei won a patent infringement lawsuit against South Korea smartphone rival Samsung on Thursday, according to information released by a Chinese court. The court ruled in the Chinese company’s favor over two standard essential patents involving fourth generation phone technology. The judge ordered Samsung Electronics to immediately stop selling or manufacturing products using the technology and to pay a small court fee. The ruling did not cite specific phone models.  Related:  Samsung Liable for Infringing Huawei Patents After Maliciously Delaying Negotiations,  Shenzhen Court Enters Injunction Against Samsung for Infringement of Huawei SEPs.

13. Micron the target of a $42m patent suit as trade secrets row spills into Chinese litigation. A month after finding itself on the receiving end of a trade secret lawsuit from Micron, Taiwan’s UMC has asserted patents in China against the US chip major. The suit asks Micron subsidiaries in Xi’an and Shanghai to pay $42 million in damages for infringing patents related to DRAM DDR4 technologies, solid state drives and graphics cards. UMC is also seeking an injunction.

We hope to be providing more updates in the year ahead from the Berkeley Center for Law and Technology.  As usual the information contained herein does not necessarily represent the opinion of any government agency, company, individual or the University of California.

By Berkeley staff.

December 2017 Update


Here are some updates on IP developments in China from this past December 2017:

1.  Xi Jinping: China must accelerate implementation of big data strategy (English) 习近平:实施国家大数据战略加快建设数字中国 (Chinese).  Xi Jinping, during a collective study session of the Politburo on December 8th, has urged the country to accelerate implementation of its big data strategy to better serve social and economic development and improve people’s lives. Xi said efforts should be made to advance national big data strategy, improve digital infrastructure, promote integration and sharing of digital resources, and safeguard data security.

2.  Legal Daily on December 5, 2017 notes that leakage of private data from government  websites is getting attention, all local governments start rectification and protection mechanism  政府网站泄露隐私问题受关注,各地整改升级保护机制 (Chinese)

3.  Ministry of Education, Department of Human Resources and Social Security, and Ministry of Finance regulated information disclosure of private information 教育部人社部财政部三部委规范信息公开 保隐私信息安全自查工作要不留死角(Chinese).  This appears to be related to the developments described in the Legal Daily article described above.  Note that unauthorized disclosure of confidential information of foreigners had been a concern during prior meetings of the bilateral Joint Commission on Commerce and Trade.   Compare 2014 and 2016 U.S.-China Joint Commission on Commerce and Trade (JCCT).   From 2014 JCTT: The United States and China confirm that trade secrets submitted to the government in administrative or regulatory proceedings are to be protected from improper disclosure to the public and only disclosed to government officials in connection with their official duties in accordance with law.  Each side will further study how to optimize its respective relevant administrative and regulatory procedures within its legal system, where appropriate, including by strengthening confidentiality protection measures, limiting the scope of government personnel having access to trade secrets, limiting the information required from companies to include only information reasonably necessary for satisfying regulatory purposes, and stipulating that any requirements on government agencies to publicly disclose information appropriately allow for the withholding of trade secrets.  Government officials who illegally disclose companies’ trade secrets are to be subject to administrative or legal liability according to law.  The United States and China agree to exchange information on the scope of protection of trade secrets and confidential business information under their respective legal systems.  China acknowledges that it is to conduct a legislative study of a revised law on trade secrets.  The United States acknowledges that draft legislation proposing a Federal civil cause of action for trade secrets misappropriation has been introduced in the U.S. Congress.  From 2016 JCCT: Both sides confirm that, in those cases in which a judicial or administrative enforcement authority requests the submission of confidential information in conjunction with a trade secret enforcement matter, such requests will be narrowly tailored to avoid putting at risk sensitive business information and will be subject to appropriate protective orders to control additional disclosure and ensure that information is not further misappropriated and that any decision that is made publicly available in conjunction with a trade secret enforcement matter will have all confidential information appropriately redacted. The United States and China confirm that trade secret investigations are conducted in a prudent and cautious manner.

4.  Overview of China’s intellectual property protection: 32000 suspected criminal cases have been transferred since 2011.  中国知识产权保护状况全景式展示  2011年以来移送涉嫌犯罪案件3.2万起(Chinese).  Note: This is data on referrals from administrative to criminal enforcement. The transfer from admin to criminal seems like part of overall efforts that China took to improve IP protection. The article mentioned that three agencies: National Copyright Administration, SAIC and SIPO, all enhanced IP protection enforcement. For instance, National Copyright Administration, through “Jian Wang” (Swordnet) project, investigated 5560 infringement cases over the past 13 years; SAIC investigated 19,400 trademark infringement cases from Jan to Oct 2017; and SIPO and other IP protection agencies investigated 189,000 all kinds of infringement and counterfeiting cases in 2016.Related background information: State Council Opinion on Improving Administrative/Criminal IPR Enforcement Coordination.

5.  China Intellectual Property Development Alliance was established  中国知识产权发展联盟成立 (Chinese).   The focus of this alliance is to create a good environment for IP application and protection and to build an ecosystem for IP operation.

6.  Notice on establishing national intellectual property pilot parks.  关于确定国家知识产权试点园区的通知 (Chinese).  2017 new list of national intellectual property pilot parks 2017年新一批国家知识产权试点园区名单 (Chinese).  These pilot parks are established by local governments.  They will provide IP services, information sharing services, help incubate IP intensive industries, and provide supporting infrastructure. SIPO approves them, and will monitor pilot parks’ work progress and review document for renewal.

7.  The story behind of independent development of C919 (English); C919背后的自主研制之路 (Chinese).  The Chinese article describes the patents involved in the C919 aircraft project.

8.  China implemented the first national military standards of intellectual property management in the field of equipment construction 我国首部装备建设领域知识产权管理国家军用标准实施 (Chinese).

9.  China’s R&D investment hits a new high.  我国研发投入再创新高 (Chinese).   China’s total GDP in 2016 was $11 trillion and R&D investment is around $230 billion, which is about 2.15% of GDP. For US, R&D investment is estimated to be around 2.8% of GDP in 2016.

10. China’s invention patent applications exceed one million from Jan. to Oct. (English); 前10个月发明专利申请量超百万件 (Chinese).

11.WIPO Stats on Patent Application Filings Shows China Continuing to Lead the World (English);  China Tops Patent, Trademark, Design Filings in 2016 (English).

12,  “China Big Data Rule of Law Development Report 2017” released.   《中国大数据法治发展报告(2017)》发布 (Chinese).  Related:  Presentation on 2017 China Big Data Rule of Law Development Report 2017中国大数据法治发展报告(实录与PPT)(Chinese)

13.  China to boost competitiveness in AI (English) 产业三年行动计划提出在八大领域率先取得突破——人工智能服务渐入千家万户(Chinese).  The Ministry of Industry and Information Technology (MIIT) recently released an action plan to substantially improve the development of the AI industry. This plan set to make breakthroughs in eight areas, including smart cars, service robot, drone, AI medical diagnosis, facial recognition, voice recognition, smart translation and smart home product. The MIIT promised more policy support, including special funds, talent cultivation and a better business environment. Measures will also be rolled out to build industry clusters, set up key laboratories and encourage data sharing.

14.  Encourage indigenous innovation and build strong brands.  鼓励自主创新 聚力品牌经济 (Chinese).  The China Council for Brand Development is working with the National Development and Reform Commission to formulate “China’s Brand Development Strategy.” This program aims to cultivate 1000 well-known international brands in five years.

15.  More than 2000 clues have been received for the “Suyuan” campaign against trademark infringement.  打击商标侵权“溯源”行动已收到2000余条案件线索 (Chinese)  SAIC started a campaign called “Suyuan” against trademark infringement in September 2017. Until the end of November, more than 2000 clues on cases have been reported.

16.  Shenzhen IP court and Shenzhen Finance court were established 深圳知识产权法庭和深圳金融法庭同时揭牌办公 (Chinese).   A new Shenzhen IP court was opened on December 26, 2017. This court will handle intellectual property cases which were under the jurisdiction of the Shenzhen Intermediate People’s Court.

17,. Wang Jinshan was appointed as the Chief Judge of Beijing IP Court.  王金山被任命为为北京知识产权法院院长 (Chinese).  Wang replaces Chief Judge Su Chi, who has guided the court since it was first launched and implemented numerous reform projects. We wish him well. Judge Wang graduated from Peking University with a major in Law. He was the party secretary of Beijing IP Court since May 2017. Judge Wang also previously worked at Beijing Intermediate People’s Court.

18.  China’s software copyright registration exceeds 700,000 in 2017.  2017年我国软件著作权登记量突破70万件  http://www.nipso.cn/onews.asp?id=39313 (Chinese).

We hope to be providing more updates in the year ahead from the Berkeley Center for Law and Technology.

As usual the information contained herein does not necessarily represent the opinion of any government agency, company, individual or the University of California.

By Berkeley staff.