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.

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