Three New Reports Proposing Policies for China Engagement

Three reports were recently released on Chinese law, Chinese science cooperation and US-Chinese relations with recommendations for the incoming administration. Here is a summary:

The Brookings Institution’s report “The Future of US Policy Toward China – Recommendations for the Biden administration” has a chapter on “Revitalizing Law and Governance Collaboration with China”  written by Jamie Horsley. 

Ms. Horsley urges the renewal of legal engagement with China.   She draws heavily on IP engagement for her suggestions.  She notes that “the U.S. Patent and Trademark Office hosted its first Chinese delegation [in 1979] and explained the American patent system to officials working on China’s first laws governing intellectual property (IP). U.S.-China IP law exchanges helped promote the establishment of specialized IP courts, introduced the practice of amicus briefs in IP proceedings, and supported China’s development of a form of case precedent to enhance uniformity of court judgments. All of these developments were informed by U.S. law and practice and are contributing to a procedurally and substantively fairer system of IP law in China.”  This cooperation, she further notes, has “promoted more professional and accessible courts and specialized intellectual property tribunals in which foreign plaintiffs are winning a majority of their patent infringement cases.”

As a further example of successful cooperation, Ms. Horsley points out that “the U.S. Department of Justice joined with Commerce in 2016 to hold the first high-level U.S.-China Judicial Dialogue, which brought officials and judges from both countries to discuss case management, alternative dispute resolution, precedent, and evidence in civil and commercial cases.” In fact, a principal focus of this program was also, IP. In preparation for those meetings the USPTO reached out to several prominent Chinese IP judges, including Justice Tao Kaiyuan of the SPC, the former President of the Beijing IP Court (Su Chi), Chief Judge He Zhonglin of the International Cooperation Division at the SPC and formerly of the SPC IP Tribunal, and former Deputy Chief Judge Wang Chuang of the SPC IP Tribunal (now with the SPC’s national appellate IP court).  These four judges are in the picture above, taken at the 2016 meetings. 

The second report, “Meeting the China Challenge: A new American Strategy for Technology Competition” was prepared by  the Working Group on Science and Technology in US-China Relations under the leadership of University of California San Diego Prof. Peter Cowhey. I was part of that Working Group.

IP issues play a role in many of the recommendations of the report.  The report criticizes a prior ban on US participation in standards setting activities with Huawei as counterproductive.  It also views NIST support for IP rights in standards setting processes as helpful to new market entrants in standards setting.  It expresses concern over Chinese efforts to dominate standards essential patents (SEPs) in 5G.  However it is agnostic over the quality of Chinese SEPs, noting that “the purpose of this Working Group is not to settle debates about the significance of the total number of patents in 5G standards versus an emphasis on the technological significance of specific patents. This group agrees that China has set a policy goal of being the overall leader in setting global 5G standards. The question for us is how to respond.”

The report also urges oversight of China’s pharmaceutical-related IP reforms in implementing the Phase 1 Trade Agreement. It also urges greater strengthening of IP protection in the pharma sector in the United States through “reform[ing] [US] interpretation of the intellectual property (IP) laws to allow important new forms of biotechnology eligible for patenting by aligning its practices with those of the European Union and China.”

Regarding “IP Theft”, the report states that “[t]e U.S. government and private and public research laboratories should cooperate in criminal investigations and support active monitoring of patent filings, ‘shadow labs,’ and research publications to alert U.S. entities of patent fraud and IP theft….”  “Patent fraud” refers to  instances where patents may have been filed in China in violation of the rightsholder. The patents may be filed with requests for anonymity when published to avoid revealing the theft.

The third report, “The Elements of the China Challenge” was prepared by the Policy Planning Staff of the State Department.  Despite the limited focus on IP, this report shares many similar recommendations to the other reports.

One of the common recommendations involves training.  The State Department report argues that the US needs to train and develop  “a new generation of public servants — in diplomacy, military affairs, finance, economics, science and technology, and other fields — and public policy thinkers who not only attain fluency in Chinese and acquire extensive knowledge of China’s culture and history.”   Horsley’s report is more specific on consequences of untrained officials: “better understanding [of Chinese law is needed to] facilitate more effective resolution of bilateral disagreements and help ensure that bilateral agreements are enforceable under Chinese law.” She also points to “misunderstanding concerning the binding force of various Chinese documents.” This is a phenomenon I have also observed.    

Other common recommendations are to “use diplomacy to coordinate with other allies and like-minded countries” (UCSD report), and to “strengthen…at home” (Brookings).    The UCSD report particularly underscores the need for a range of technological self-strengthening steps. Importantly, the reports all recognize that the United States “must promote American interests by looking for opportunities to cooperate with Beijing subject to norms of fairness and reciprocity” (State Department).  I agree that confrontation or collaboration  is a false dichotomy in our complex engagements with China.

The Biden agency review teams would be well served by reviewing these reports to implement pragmatic approaches to better manage U.S. interests in our IP and other relations with China.  

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