Towards a Better Understanding of “Forced Technology Transfer” Policies in China and Their Strategic Implications

In August 2017, President Trump issued an executive order setting in motion an investigation of China’s trade policies including IP, technology transfer, and investment policies. The “Section 301” report on this investigation came out earlier this year. The Report itself uses the word “force” or “forced” 47 times and identifies a range of practices that result in “forced technology transfer.” However, there is a significant amount we still do not know regarding how these controversial Chinese policies actually work and the degree to which a technology owner’s behavior has in fact been compelled by state actors. A new paper by Dan Prud’homme, Max von Zedtwitz, Joachim Jan Thraen, and Martin Bader published in Technological Forecasting & Social Change explores this important issue.

The authors evaluate the ability of “forced technology transfer” (FTT) policies – which they define as policies meant to increase foreign-domestic technology transfer that simultaneously weaken appropriability of foreign innovations – to contribute to technology transfer. They draw on a survey of foreign firms, interviews with foreign firms, and case studies of Chinese firms.

The authors identify three categories of FTT policies that have significantly impacted foreign-Sino technology transfer in recent years:

(1) Policies which risk market loss (including market access preconditioned on meeting technology transfer requirements),

(2)  Policies that offer no choice regarding compliance (including unfair court rulings in IP civil litigation), and

(3) Policies that are based on legal obligations (including provisions in the technology import-export regulations; and certain policies related to the intersection of anti-trust and IP, and IP and technical standards).

Several other controversial policies were also identified, including disclosure of confidential business information through regulatory approvals, pharma patent issues, and certain tax schemes and subsidies.

The authors find that, with the exception of no-choice policies, foreign firms are allowed some flexibility to decide whether or not they want to comply with China’s FTT policies. Therefore, even though non-compliance with the policies is always met with consequences, the technology is not actually “forced” against a party’s will. After noting this limitation of the term, the authors explain that they retain the term “FTT policies” in their research for readability and because it is part of well-established lingo, but only use it to the extent that it meets their aforementioned definition.

Much of the research focuses on foreign-Sino transfer of frontier technology, i.e. the most advanced technology emerging from research and development which is generally not at the point of mass commercial adoption. According to the authors, not only the design of FTT policies per se helps determine if they exert substantial leverage over (i.e., force) frontier technology transfer, but the environment in which they are deployed is equally important. The authors find that FTT policies appear to exert the most leverage over frontier technology transfer when accompanied by seven conditions: (1) strong state support for industrial growth; (2) oligopoly competition; (3) other policies closely complementing FTT policies; (4) high technological uncertainty; (5) policy mode of operation offering basic appropriability and tailored to industrial  structure; (6) reform avoidance by the state, and (7) stringent policy compliance mechanisms.

Based on each of these conditions, the authors developed an FTT Strategy & Risk Forecasting Matrix with corresponding strategies the state may adopt to fully exploit, i.e. maximize the leverage of, FTT policies.

The authors’ analysis has several possible implications for technology transfer policymaking. In the authors’ view, Chinese FTT policies may enable domestic acquisition of frontier foreign technology if all seven conditions determining policy leverage are fully exploited by the state. However, if the state does not fully exploit all seven conditions, the FTT policies have less leverage. Moreover, if the state exploits none or only a few of the conditions, the FTT policies may result in a lose-lose game where foreign firms are discouraged from transferring valuable technology and domestic firms’ acquisition of new technology is made more difficult.

With this analysis, the authors provide evidence that can be used to appeal to the Chinese authorities to change some of their FTT policies: some of the policies are actually counterproductive in meeting their aims. The risks of loss of technology acquisition posed by Chinese policies is an important phenomenon which this blog has also identified, particularly as an unintended consequence of China’s Technology Import/Export Regulations (especially for start-ups and litigation-prone technologies, but also for technological collaboration) and which has been mentioned by the US Chamber of Commerce in its IP Index and its report on licensing.

The authors argue that in order to increase the chance that FTT policies will spur sustained transfer of frontier technology, Chinese regulators should not deprive foreign firms of  minimum level of appropriability. The policies should also allow foreign firms to benefit in at least minor ways from technology transfer arrangements.

The research also has important implications for technology strategy formulation and risk management. The authors’ FTT Strategy & Risk Forecasting Matrix can guide foreign firms to anticipate risks associated with FTT policies and serve as a starting point for understanding how to further quantify or mitigate these risks. The risks are of course compounded by potential trade secret theft, cyber intrusions, and less formal pressure points on foreign licensors to assign or transfer their technology in China. And these risks must be considered alongside major rising challenges to doing business in China, which Prud’homme and Zedtwitz have also discussed (in MIT Sloan Management Review), including: problematic areas of regulation in China and rising competition from Chinese rivals in terms of their recruiting and retaining top talent, more large-scale and strategic use of intellectual property, and ever faster time-to-market of products and services. Mitigating these many risks requires carefully integrated intellectual property, innovation, non-market, and human capital strategies, alongside yet other responses.

Edited of June 23, 2018:  An interview with Prof. Liu Chuntian of Renmin U. Law School on this same topic of forced technology transfer is found on page 2 of the People’s Daily (June 22, 2018, 2nd edition) (reporter Wang Yu)   A machine translation by Google is found here.  Liu focuses primarily on market access as a separate discpline from intellectual property under the WTO and as being essentially voluntary; he does not support formal and informal incentives in place (including the Technology Import/Export Regulations as noted in the article by Dan Prud’homme.

What the EU and US WTO IP Disputes Reveal About Trade Diplomacy

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Two contrasting approaches to using the WTO for China-related IP issues involving technology licensing and forced technology transfer are now pending at the WTO.

The United States initiated a WTO dispute on China’s licensing practices by filing a  consultation request on March 23, 2018.  Shortly after the filing of that case, Japan, the European Union, Ukraine, Saudi Arabia and Chinese Taipei requested to join the consultations.  The European Union additionally filed its own parallel WTO consultation request on June 1, 2018, with a broader scope. It is too soon to tell which countries will join the EU request.

Both countries timed their requests in conjunction with other trade actions. The WTO case was filed by the United States one day after the Section 301 report  was released. The European Union simultaneously filed its case against China with a WTO case against the United States regarding US tariffs on steel and aluminum imports.

The EU’s approach to this IP case is markedly different from the last time the US filed a WTO dispute involving China’s IP practices (DS/362).   At the time that the US filed a request for IP-related cases from China, the EU declined to make a similar transparency request.  It also did not join the US as a co-complainant in the ensuing WTO case, nor did it file a parallel complaint, but it did participate as a third-party.  By contrast, the EU approach in the current dispute is to both support the US and dig deeper.

The US consultation request was portrayed by USTR as addressing “technology licensing requirements.”  The thrust of the complaint involves China  “denying foreign patent holders, including U.S. companies, basic patent rights to stop a Chinese entity from using the technology after a licensing contract ends.”  The consultation request is therefor somewhat narrow.  The US complaint does not specifically address other technology-oriented rights, such as trade secret protection or undisclosed data, nor does it take on the topics set forth in the Section 301 report involving “IP theft.”   The consultation request is now numbered WT/DS542/1.

The EU complaint (WT/DS549/1), cites several Chinese measures in addition to those identified in the United States’ consultation request, and invokes more expansive WTO principles and procedures. The additionally cited measures include the “Working Measures [sic] for Outbound Transfer of Intellectual Property Rights (For Trial Implementation), (State Council, Guo Ban Fa [2018] No. 19)” (知识产权对外转让有关工作办法(试行)) which was previously discussed here.  The Chinese promulgation of these interim Regulations only five days after the US filed its consultation request, looks to some like another act of synchronized trade diplomacy — in this case as a possible retaliatory act for the 301 report and the WTO case.  My guess is that the EU, by referring to these new largely untested regulations is however seeking to address the legality of controls China has additionally imposed on foreigners’ transferring IP out of China.

The EU has also swept in other measures into its complaint, including China’s trade secret law (the Anti-Unfair Competition Law), the Anti-Monopoly Law, the Regulations [sic] of State Administration for Industry and Commerce Administrations on the Prohibition of Abuse of Dominant Market Position, and the Regulation [sic] on the Prohibition of Conduct Eliminating or Restricting Competition by Abusing Intellectual Property Rights.  The nomenclature the EU uses for these various legal documents appears imprecise.  The March 2018 “measures” may properly be classified as “regulations” 法规 issued by the State Council. The SAIC “regulations” should properly be classified as “rules” 部门规章 issued by an administrative agency. This is the nomenclature China set forth in the Report of the Working Party on the Accession of China (WT/ACC/CHN/49), paragraph 66 ( the “Protocols of Accession“).  The Working Party Report nomenclature establishes clear legislative hierarchies pursuant to China’s Law on Legislation.

The EU also argues that China’s appears to directly or indirectly “nullifying or impairing” the benefits accruing to the European Union and its Member States that were expected by China’s WTO accession, thereby opening the door to broader arguments regarding how China may deprive WTO members of the benefits they legitimately expected while at the same time not violating the literal language of any commitment (See, e.g., Art. 64 of the TRIPS Agreement).  These arguments have been subject to a moratorium and have historically been difficult to assert, but in my estimation have some relevance to the current situation in China.  The EU is also seeking to utilize provisions in the WTO that address the “impartial and reasonable application and administration of its laws, regulations and other measures” (Article X.3(a) of the GATT 1994 and Paragraph 2(A)2 of the Protocol on the Accession of the People’s Republic of China to the WTO).  The “impartial administration” requirement, as found in the Protocols of Accession requires China to “apply and administer in a uniform, impartial and reasonable manner all its laws, regulations and other measures … pertaining to or affecting …  trade-related aspects of intellectual property rights (“TRIPS”)” (p. 74).

Contrasting the actions of the US and the EU, the EU complaint urges a legalistic and multilateral resolution of trade disputes, using doctrine that has proven difficult to assert.  The approach also appears to reflect a waning confidence by some that China today in fact has an effective and independent legal and political system which “impartially administers its laws”.   My former colleague at Fordham, Prof. Carl Minzner describes some of these political reversals in his recent book  End of an Era: How China’s Authoritarian Revival is Undermining Its Rise (2018).

The US approach, by contrast, uses the 301 report to point to perceived technological threats, manifested through industrial plans, vague laws, industrial espionage and unfairly adjudicated cases, to make the point that the WTO might be inappropriate to resolve its concerns. In a sense, the US assumed in the Section 301 report that in the party- and plan-controlled China of today, with a resurgent state sector, there aren’t many “laws, regulations and other measures” to administer impartially.  The United States therefor pays scant attention in the 301 to the numerous legal reforms and civil adjudication in intellectual property that have taken place in recent years.  The United States approach is also more broadly consistent with the perspectives of Prof. Mark Wu at Harvard Law School who prophetically pointed out in his article “The ‘China, Inc.’ Challenge to Global Trade Governance”  that “the WTO faces a challenge: can the institution craft a predictable and fair set of legal rules to address new trade-distortive behavior arising out of China, Inc.? If not, key countries may turn away from the WTO to address these issues.”

While the EU and the US likely have common goals with respect to China’s IP regime, I believe that they likely could also learn something from each other in their strategies and perhaps they will as these cases progress.

 

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Bottom photo by Mark Cohen of Charleston, SC United States Custom House.

 

US Files Consultation Request at WTO on Chinese Technology Licensing Practices

Fresh on the heels of the Section 301 announcement, USTR on March 23, 2018 made a  consultation request  of China regarding China’s discriminatory licensing practices.  This is the first step in initiation of  a WTO dispute.  Here is a link to the press announcement.

The consultation request broadly speaking alleges discriminatory treatment in licensing pursuant to China’s joint venture regime as well as the  Administration of Technology Import/Export Regulations (“TIER”), as compared to provisions under China’s contract law that may govern purely domestic technology transfers or Chinese exports of technology.  The complaint is based on the National Treatment provisions of the TRIPS agreement as well as Article 28.2, which provides that “Patent owners shall also have the right to assign, or transfer by succession, the patent and to conclude licensing contracts.”  The Section 301 Report of USTR also discusses these issues.

Update of June 2, 2018:  On June 1, the EU filed its own complaint against China at the WTO involving China’s technology licensing practices, including the TIER.  A copy of the request for consultations, which appears somewhat more extensive is available here.

 

 

 

March 13 – 19, 2018 Updates

1. China’s export of IP royalties increased 311.5% in 2017  According to the statistics of the State Administration of Foreign Exchange, the volume of trade of Chinese IP royalties totaled 33.384 billion USD in 2017, a 32.7 percent increase from 2016. The amount of exports of IP royalties totaled 4.786 billion USD, a 311.5 percent increase from 2016, which ranked No.1 in terms of the speed of growth in service trade. The exports and imports of IP royalties for manufacturing industry ranked No. 1, at 3.793 billion USD, a 544 percent increase from 2016.  The import amount totaled 20.753 billion USD, up 16 percent. In terms of category. The amount of exports of replication/distribution computer software ranked No.1. at 3.405 billion USD, up 652 percent from 2016. In terms of region, Guangdong province was the No.1 in amount of export and import of IP royalties in 2017. Its export amount totaled 4.013 billion USD, up 591.9 percent from 2016 and its import amount totaled 7.525 billion USD, up 9.8 percent from 2016.

Despite the significant increase in the amount of exports of IP royalties in 2017, China still has a trade deficit in IP royalties. The amount of the deficit totaled 23.812 billion USD, which increased by 0.978 billion USD. About 60% of the deficit reportedly originated from the United States, Germany, and Japan.

IP commercialization and utilization has been a focus of China’s IP efforts since the third plenum of the Communist Party in 2014. However, foreigners continue to view China as very challenging licensing environment despite China’s claims of a licensing “deficit”. China’s technology import/export regulations had been one of the challenges that foreigners expressed special concern. In the US Chamber’s recently released IP Index, it was noted that IP commercialization in China was hampered by “[s]ubstantial barriers to market access and commercialization of IP, particularly for foreign companies.” China received zero points for “Regulatory and administrative barriers to the commercialization of IP assets.”  Here is a link to the discussion of Chinese licensing practices. The US Chamber’s conclusion is not unlike that of the Global Innovation Index (2016) which, as we previously reported, scored intellectual property payments according to a formula as a percentage of total trade. China came out at 72nd place, while it ranked number 1 in high tech exports. Similar concerns were also voiced by USTR in the recently released Section 301 report.

2.SIPO takes efforts to develop ability and capacity of IP mediation entities.  SIPO recently issued a “Notice on Developing the Ability and Capacity of Intellectual Property Mediation Entities” (“Notice”), as part of its effort to strengthen the role of mediation in IP dispute and the overall IP protection system. According to the Notice, SIPO will select 20 to 30 existing IP mediation entities every year as the target for ability and capacity development and help with such development for two years. After the two-year period, SIPO will release the basic information as well as specialties of entities that made great progress. Selection and review of existing entities will start this year, which is done by SIPO. Entities can apply either through local IP offices or to SIPO directly.

Within the region, Japan is also considering the use of mediation system to resolve IP disputes. The Japan Patent Office (JPO) intended to introduce an ADR system to determine appropriate license fee of SEPs in 2017. However, the ADR SEP system is likely to be deferred, as reported after a JPO committee meeting in November 2017.

3.  Huawei v Samsung patent decision released by Shenzhen IP Court. The recent decision in Huawei v Samsung was released by the Shenzhen IP Court.  The case involves assertion of two SEP’s by Huawei, and the grant of an injunction against further infringement.

Summary of MoST Presentations at the Two Sessions

Thanks to Mr. Dai Nian, Research Associate, Duke Kunshan University for this summary of some of the presentations of the Ministry of Science and Technology at the two sessions of the National People’s Congress and Chinese People’s Consultative Conference (“lianghui”) meetings.   Much of this summary has direct implications for IP, particularly patents – including regarding China’s continuing innovation in fintech, AI, autonomous vehicles, US-China clean energy cooperation and science cooperation, and commercialization/licensing of technology.

Overall assessment of past achievement and current status

The strategic importance of Science and technology innovation in the overall development of party and state has been significantly increased. China’s S&T innovation capability and efficiency have been largely improved. The country is gradually transforming from passive follower and learner to leader in many fields. The contribution rate of science and technology has risen from 52.2% to 57.5%, with the new economy leading the world such as digital economy, sharing economy. Five years since the 18th National People’s Congress, the major historic achievements of China’s S&T can be summarized as:  S&T capability is significantly improved, the country has entered a stage of “并跑 (at the same speed)” and more and more “领跑 (take the lead)”. China’s strategic high techs is currently at the world forefront; S&T innovation provides strong support to supply-side reforms and improvement of people’s livelihood, fully integrating into socio-economic development.

Artificial intelligence

The critical step for AI to deeply integrate with all aspects of our life is to have strong capability and constant breakthroughs in key technologies, basic research, and make it available to individuals, entrepreneurs dedicated to innovation. But most importantly, China should strengthen the foundation for AI:  enhance the science foundation for AI, speed up integrated systematic R&D of key technologies, and improve R&D discoveries in open platforms. The Chinese government will release AI guidance and detailed rules and regulations in order to achieve breakthroughs in basic frontier theories and key technologies; expedite commercialization and application of AI. At the same time, research on policies, laws and regulations should be enhanced so as to properly address challenges arising from social ethics, employment structure, individual privacy, national security, etc; AI is an international trend. China will strengthen international cooperation, support Chinese AI companies and research institutes to have cooperation with foreign partners.

New energy car and US-China S&T cooperation

Volume of sales of electric cars and new energy cars reached 770,000 last year, and China is now in possession of 1.6 million accounting for half of world total. Primary reasons for developing new energy cars are: improve structure of energy consumption, reducing reliance on oil; reduce air pollution; significantly alleviate traffic congestion when autonomous driving, AI is combined with electric cars in sharing economy model. China and the United States have been cooperating closely in this field. e.g U.S.-China Clean Energy Research Center (CERC) that focuses on energy saving buildings, clean coal,  and electric cars. China-U.S. S&T innovation cooperation will constantly strengthen. The Chinese government is confident that bilateral S&T cooperation will go deeper, given that scientists, entrepreneurs, and government of each country have established well-functioning communication mechanisms.

Scientists and researchers are the main force of S&T management reform

The most important thing to do is focus on people (S&T personnel) if we want to strengthen basic research, promote commercialization, and improve performance of all-chain innovation. Over the past five years, the government has carried out substantial reforms in the overall S&T management system and use of funding. S&T personnel are empowered to have more discretion of fund allocation, to start businesses that commercialize S&T discoveries. Wan Gang points out some obstacles blocking the implementation of reform measures such as fiscal constraints, cap on the rewards to researchers, lack of budgetary flexibility. MOST will produce relevant policies in the near future regarding evaluation system, S&T commercialization, tax preference, and credibility of S&T personnel.

双创 (mass entrepreneurship and innovation)

Under national enthusiasm for 双创 (literally double creation, or mass entrepreneurship and innovation), a lot of group innovation space (GIS) have sprung up that give full play to young people‘s creativity and entrepreneurship and also greatly facilitates economic transformation and development.  Meanwhile, 双创 together with GIS helps promote openness and sharing of S&T resources because R&D achievements made by enterprises, universities, and research institutes are integrated here, with many public services becoming open to all. 双创improves the level of internationalization of China’s innovation, given that there are already many offshore Chinese innovation centers.

Wan Gang highlights three major task to be accomplished in order to upgrade 双创: deep integration of industry, university, and research institute so as to realize high level innovation and entrepreneurship that will serve real economy; promote fintech (finance and technology combination) and provide diverse financial services for tech entrepreneurs and start-ups; absorb and leverage international resources through cooperation, build a favorable ecology for innovation and entrepreneurship that is made up of GIS, incubators, accelerators, S&T parks that cultivate talent, promote commercialization, effectively combine VC with industries.

S&T commercialization

China has accomplished a trilogy in S&T commercialization: over the past five years, the government revised laws on S&T commercialization, promulgated a number of rules and regulations that facilitate and promote S&T commercialization, kicked off a series of moves—the end result is positive considering the significant progress made in technology commercialization and rapid growth of tech transaction market which reached 1.3 trillion yuan in 2017.

MOST at Two Sessions:

http://digitalpaper.stdaily.com/http_www.kjrb.com/kjrb/html/2018-03/10/content_390065.htm?div=-1

http://most.gov.cn/xinwzx/xwzx/twzb/fbh18031001/twbbzbzy/201803/t20180310_138522.htm

http://most.gov.cn/xinwzx/xwzx/twzb/fbh18031001/twbbzbzy/201803/t20180310_138521.htm

http://most.gov.cn/xinwzx/xwzx/twzb/fbh18031001/twbbzbzy/201803/t20180310_138520.htm

http://most.gov.cn/xinwzx/xwzx/twzb/fbh18031001/twbbzbzy/201803/t20180310_138519.htm

http://digitalpaper.stdaily.com/http_www.kjrb.com/kjrb/html/2018-03/12/content_390192.htm?div=-1

 

January 30-February 12, 2018 Updates

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

  1. China’s tough cyber rules raise risk of infiltration US business group says In a report released on Monday, the US-China Business Council urged Beijing to loosen limits on data flow and storage that raise the risk of security breaches for foreign companies. The council said China should follow best international practice by opening access to cloud computing services, levelling the playing field in technology procurement and allowing foreign firms to send copies of data abroad for analysis and processing. The Council’s report also recommended that foreign partners in joint ventures be allowed to own and control software and other technology licensed to the joint ventures.
  2. MIIT Chief says China does not force foreign enterprises to transfer technology, says MIIT chief China did not and cannot force foreign enterprises to transfer technology to the country, and any cases of technology transfers are enterprises’ own choices driven by the market, Miao Wei, head of the Ministry of Industry and Information Technology (MIIT), said at a press conference on Tuesday, adding that China has been taking steps to better protect intellectual property rights.
  3. .The Supreme Court of China Issued Seven Typical Cases on Property Rights Protection最高法发布7起保护产权典型案例 on “property rights protection” last Tuesday. Among those seven cases, two focused on intellectual property rights, with one on trademark infringement and unfair competition, and the other on criminal trade secret protection in an employment context. Details of those typical cases are available here.
  4. FTC, Justice Department Officials Meet in China On Antitrust Enforcement The head of the Federal Trade Commission (FTC) and a representative from the Justice Department met with Chinese officials from NDRC, MOFCOM and SAIC in Beijing this week to discuss efforts to ensure effective antitrust enforcement and increased interagency cooperation. This is the U.S. delegation’s fourth meeting in China since the between the countries signed an antitrust memorandum of understanding on July 27, 2011.
  5. Baidu Accused of Not Playing Fair by Popular News Aggregator Beijing ByteDance Technology, which runs the Jinri Toutiao app that had 232 million monthly active users as of December last year, said on Tuesday that it filed the lawsuit against Baidu at the Haidian District People’s Court in the Chinese capital. In a post on its official WeChat account, ByteDance said Baidu used its “monopoly advantage” to mislead users and damage Toutiao’s reputation, the details of which it has filed in court. Ahead of the ByteDance filing on Tuesday, Baidu issued a statement that described ByteDance’s lawsuit, like its public relations efforts, as reflecting “anxiety over its own challenges in development”.
  6. China sees robust growth in technology transactions More than 367,000 technical contracts were signed in China in 2017, up 14.7 percent from the previous year, according to the Ministry of Science and Technology. The transaction value of the contracts totaled 1.34 trillion yuan (213 billion U.S. dollars), with a year-on-year increase of 17.7 percent. Electronic information, urban construction and social development, and transportation are the top three fields that gained the most value.  Among four types of technical contracts, technical service contracts (技术服务合同) and technological development contracts (技术开发合同) had strong growth. However, technology licensing contracts (技术转让合同) and technical consulting contracts (技术咨询合同) in fact had a decline.  Over 40 percent of transactions were contracts involving intellectual property rights. Biotechnology and pharmaceutical contracts had a strong growth of 62.94%, with a total overall transaction value of 1.19 billion yuan. The transaction volume of invention patents grew by 19.2 percent in overall transaction value year on year.    IP utilization has been a focus of China’s IP efforts since the third plenum of the Communist Party in 2014. However, foreigners continue to view China as very challenging licensing environment. In the US Chamber’s recently released IP Index, it was noted that IP commercialization in China was hampered by “[s]ubstantial barriers to market access and commercialization of IP, particularly for foreign companies.” China received zero points for “Regulatory and administrative barriers to the commercialization of IP assets”  Here is a link to the discussion of Chinese licensing practices. The US Chamber’s conclusion is not unlike that of the Global Innovation Index (2016) which, as we previously reported, scored intellectual property payments according to a formula as a percentage of total trade. China came out at 72nd place, while it ranked number 1 in high tech exports.
  7. The rise of Chinese groups applying for US patents The breakdown of patents granted in the U.S. per country changed little in 2017 from previous years, with China the glaring exception, according the analysis by patent service and analytics company IFI CLAIMS.  China’s overall slice of the pie remains relatively small. Just 11,240, or 3.5%, of the 320,003 utility patents granted in the U.S. last year went to Chinese companies, compared with 31% to other Asian businesses. But it is the pace at which certain Chinese tech companies have risen in the rankings that will have rivals from the U.S. and elsewhere taking note. For instance, BOE Technology Group (京东方科技集团股份有限公司), whose core business centers on display sensor technology and the Internet of Things, was granted 1,414 patents during the year, compared with 19 in 2013.  
  8. Guangdong’s accumulated invention patents top China Guangdong Province topped the country in the number of valid invention patents granted over the past eight years, according to local authorities. By the end of 2017, the accumulated number of valid invention patents in the province reached 208,500, said He Jufeng, deputy director of the Guangdong Intellectual Property Office. Note that although Guangdong has the most accumulated patent grants, in recent years Guangdong has met some competition.  Jiangsu Province, for example, was the No.1 for invention patent application in 2015, while Guangdong was No. 2, based on data from SIPO for 2015. Meanwhile, in 2014, Jiangsu was the No.1 for invention patent application and Guangdong was No.3. Guangdong has also been a source of many of China’s PCT filings, from companies like Huawei and ZTE.   
  9. Conference proposes int’l e-commerce cooperation An e-commerce conference held in Beijing called for coordinated regional cooperation on areas including supervision and standard setting to promote sustainable development of the emerging sector. The first global regulatory framework for e-commerce was put forward during the conference. Proposed by Chinese customs, the document listed eight core principles in e-commerce management including clearance procedures and the role of online retailers.
  10. New Intellectual Property initiative extends Berkeley Law’s reach in Asia China’s push to create a dynamic economy with innovative companies is creating opportunities for new academic, commercial, and government partnerships. Eager to maximize those opportunities—and to deepen its foothold overseas—Berkeley Law has launched the Asia IP Project.  Led by Professor Mark Cohen, and powered by the school’s Berkeley Center for Law & Technology (BCLT), the initiative seeks to enhance existing collaborations and develop new ones with academic institutions and other partners in Asia. Center leaders will bring together Chinese and U.S. academics, government officials, and practicing lawyers to better understand Asia’s intellectual property law issues through research, workshops, conferences, and other eventst. The program had its first US meeting on February 9, 2018.

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.

October Offerings on Chinese IP

Here are some upcoming programs that involve China in North American in October:

October 11-12, 2017, I will be speaking on a China IP Panel at the ABA IP West conference in Long Beach, California.  The panel will focus on China’s recent (paradoxical) emergence in IP protection and enforcement.  Mike Mangelson, China IP Attaché in Shanghai will also be speaking at a session focused on the China IP Attaché program at this ABA program.

On October 14, 2017, I will be moderating a session on new trends in Chinese IP litigation, courts and enforcement at the Sixth Annual IP  Summit hosted by Loyola University of Los Angeles.

On October 18, 2017, the University of Indiana/USPTO will be hosting a China “Road Show” in Indianapolis.

On October 20, 2017, the John Marshall Law School will be hosting a China “Road Show” with USPTO in Chicago.

On October 26, 2018, I am scheduled to be commenting (as an academic) at the Fordham IP Institute on a presentation by Dr. David Cole of the Hagley Museum and Library on “A Nation of Inventors: The Politics of American Patent Models.  The Hagley Museum is planning an exhibit in China of its patent models in 2018.

Apart from these events, there are also China IP road shows scheduled for Salt Lake City and Denver in October.   Watch the USPTO website for more information on these and other programs.

An addenda to October offerings, per its Federal Register Notice, on October 10, 2017, USTR will be hosting a hearing on the Section 301 investigation involving China’s Technology Transfer, Intellectual Property and Innovation – Related Rractices.