Action Plan for Further Implementation of the National IP Strategy (2014-2020) Approved

According to a Chinese Government website, on  December 29, the State Council reviewed and approved the Action Plan for Further Implementation of the National IP Strategy (2014-2020) (Action Plan). The Outline of the National IP Strategy (NIPS) had been implemented for 6 years.  Premier Li Keqiang, and SIPO Commissioner Shen are quoted in the this brief summary.

Chinese authorities have pointed to three key aspects of the NIPS Action Plan:

A.  First, to “Strive to Build A Strong IPR Country”  (努力建设知识产权强国).

B.  To improve IP utilization and protection (知识产权运用和保护).

C.  Practical new steps are to be announced, including plans to promote the development of IP intensive industries (知识产权密集型产业发展).  This  includes greater coordination amongst various branches of national and local government.  Interestingly, and perhaps of greater concern, it also includes “strengthening patent pilot projects,  joint utilization of patents and collective management of patents… to strengthen the competitive advantages of industries.” (强化专利导航、专利协同运用、专利集群管理等工作…增强产业竞争优势).

Here is how I read the tea leaves on this announcement:

First, the references to China becoming an IP “strong country” , and not merely an IP “big country” is a new concept in the NIPS, and likely reflects the observations and approaches of former Commissioner Tian Lipu.  In fact, many observers believe that too much patenting, particularly patenting of a low quality, can be harmful to innovation. I have often noted in this blog that patent quality is a continuing negative side effect of China’s metric-driven approaches to innovation.  In addition, innovation is largely a local phenomenon – China’s efforts to become a strong innovative country this time will also include programs to make strong IP provinces and cities in China.

Second, the reference to IP utilization directly quotes the negotiated language of the Third Plenum and its commitment to “Strengthen the Utilization and Protection of IP” (加 强知识产权的运用和保护).  This was also something that former Commissioner Tian discussed as a positive outcome of that meeting.

Third, the reference to IP intensive industries is new to China’s strategic planning, and, as noted by Commissioner Shen, reflects the influence of the influential US government  2012 report on Intellectual Property and the US Economy.   Reference is also made by Commissioner Shen to IP intensive industries being low on resource demands and low polluting.

The legislative basis for the National IP Strategy is the China Science and Technology Promotion Law (Dec 2007).  Article 7 of that law provides that China will establish a NIPS, in order to promote innovation, encourage indigenous innovation (激励自主创新), and raise the utilization protection and management of IP.  This 2007 law was famous for codifying the concept of indigenous innovation, which elicited considerable concern at the time over potential discrimination against the foreign technology community.  This Action Plan introduces several new and useful concepts which, if implemented fairly, will benefit foreign and domestic investors alike.

 

 

Loyola/Berkeley/Renmin Program Highlights Recent US-China IP Developments

On Friday November 7 I attended and spoke at the US-China IP Summit at Loyola (https://chinaipr.com/2014/09/07/loyola-los-angeles-hosts-us-china-ip-summit-november-7/). Here are some highlights:

Prof. David Nimmer (UCLA) talked about whether there is a need to reintroduce a concept of formalities in copyright again, in order to deal with problems in determining rights and better utilize information technologies.

Dean Liu Chuntian of Renmin University, argued that China’s true economic constitution should be a civil code. He took issue with those that argue the Antimonopoly Law is China’s “new economic constitution.” In addition he expressed concern that IP shouldn’t depart from the civil law. Prof. Liu also reiterated his long-standing opposition to administrative enforcement in civil law matters and also argued that copyright law reform issues should focus on matters of economic importance. Copyright protection of sports broadcasting in China was singled out as such an economically important issue.

Regarding specialized IP courts, Dean Liu also noted that several “10’s of members” of the NPC Standing Committee dissented from the NPC decision. Prof. Luo Li noted that the Beijing Specialized IP Court was established last week, just before APEC. Prof. Luo noted that the jurisdictional divisions of the courts were quite complicated, due to differences in adjudication amongs civil, criminal and administrative jurisdiction. Computer software cases (piracy?) would also be heard by the specialized IP Courts.

I raised concerns in this discussion on the courts about how foreigners would be treated by these specialized courts, in light of evidence that suggests foreigners may fare less well in appellate specialized IP tribunals (see: https://chinaipr.com/2014/08/22/specialized-ip-courts-about-to-launch-in-three-cities-and-are-they-good-for-foreigners/)

Prof. Merges of UC-Berkeley described AIA post grant proceedings as a kind of “quiet harmonization” with foreign practices, including with SIPO. As with China, there is no mandatory stay of civil proceedings during these administrative proceedings.

Prof. Zhang Ping of Peking University discussed the Huawei/InterDigital Corporation case as a pioneering effort on the part of Chinese courts to deal with global standardization crises, including by determining appropriate royalty rates for standards essential patents.

Prof. Huang Wushuang of East China University of Politics and Law discussed current efforts at trade secret legislative work. He noted that he had submitted proposed revisions on the Antiunfair Competition Law regarding trade secrets, by expanding the current one article to 10. His discussions focused on several issues, including what constitutes reasonable precautions to protect trade secrets and the role of non-compete agreements and how to strike a balance between rights of employers and employees. He noted that he did not think it reasonable for injunctions in trade secret matters to be permanent, since every trade secret has its own life span. Regarding damages, he thought that a traditional hierarchy should apply by basing calculations on the plaintiff’s loss, the defendant’s profits, reasonable royalty and statutory damages. He also noted that there were few cases in China which showed a causal relationship between damages and infringing cases.

The last panel discussed trans-border cases and was one where I participated. There was an especially lively discussion on issues involving recognition of judgments and the timely implementation of Hague Convention requests for evidence. Various speakers noted efforts to settle global IP disputes such as by suspending cases in favor or one or more venues, using Hong Kong arbitration for cases involving Chinese entities, and the need for means to resolve increasingly more complicated trans-border disputes.

There were many more great speakers — my notes are hardly complete. Hopefully a transcript or summary of the presentations will be compiled shortly. Kudos to the organizers, including Prof. Song of Loyola, for another great program.

Two Early US Presidents and Chinese IP

GeorgeWashington

Today is President’s Day in the United States, named after George Washington and Abraham Lincoln and I pay a brief tribute to the role of these two presidents in bilateral IP issues.

Probably no president had more of an indirect stake in IP and traditional Chinese medicine in China that George Washington, our founding father. Washington was likely involved in the profitable ginseng trade, which was an important part of the first trade between the newly independent United States and China. In 1784, the Empress of China set sail from the United States to China, carrying 30 tons of the herb. About the same time George Washington (1732-1799) recorded it in his diary, “I met numbers of Persons & Pack horses going in with Ginseng: & for salt & other articles at the Market Below.”

The President’s portrait was also the subject of considerable copyright piracy. Gilbert Stuart sued one merchant, John Swords, who had one of his famous portraits of Washington, copied onto glass in Guangzhou (see: http://www.artnews.com/2009/10/01/the-many-faces-of-george-washington/).

paintingonglasschina

PaintingonglassUSA
Abraham Lincoln, the sole US president to have been granted a patent, had little contact with China. However, contemporaneous rebellions consisting of the Civil War in the United States (1861-65) and the Taiping Rebellion in China (1850-1864) were remarkable for the limited role that patents would play in the rebel cause. The Confederate States of American quickly established a patent office upon their secession from the North. One of the important patent inventions at that office was for an iron-class naval vessel, an important technological breakthrough in naval warfare. At about the same time, in 1859, Hong Rengan tried to establish a patent system in China for the areas under control of the Taiping’s. Although US expatriates, including Union loyalists, played an active role in China during the Taiping Rebellion (see http://opinionator.blogs.nytimes.com/2012/05/04/a-little-trouble-in-big-china/ ) , there is no indication that US mercenaries or technology were the inspiration for this initial Chinese effort at developing a patent system. It might, instead, be surmised that both rebel causes, in the United States and China, saw an IP system as affording them a potential technological edge in their efforts to achieve victory.

Software Piracy by the Government: A Tempest in the Tomato Garden?

The Chinese media, including China Radio International, broke the news on October 8 that the website of China’s State Intellectual Property Office (www.sipo.gov.cn) was hosting training materials which appeared to have been prepared with pirated software that was acquired through the notorious “Tomato Garden”  website.  Information on the presentation is available here  – under “author” are the Chinese words “番茄花园” (tomato garden).  The facts were uncovered by a microblogger, and picked up by mainstream publications such as Xinhua.  The “Tomato Garden” website was the subject of a well publicized and successful criminal case which resulted in jail time and fines for illegally distributing software online. Continue reading

Chinese IPR in New York City

As New York City gets ready for the Xmas holidays, it seems as if there is a small, but noticeable increase, in China IP-related spots around town.  Here are a few….  Continue reading

National Academies and Standardization in China

On October 3 the National Academies are hosting a program on
“Management of Intellectual Property in Standards Setting Processes”.
The China paper by Dan Breznitz and Michael Murphree, entitled
Shaking Grounds? Technology Standards in China” is already posted,
and the authors have consented to my linking to it here.

The October 3 morning session is on Standards Processes and IP
Treatment in Emerging Economies, chaired by veteran  Richard
Suttmeier.  The program has a great cast of scholars, officials and
corporate executives who work global standardization issues and
policies.  Here is the preliminary agenda.

Obama’s New Laboratories for IP Enforcement Involving China

The President mentioned China four times in his State of the Union address on January 24, 2012.   Although it’s a bit unclear what his game plan is, it seems that he is looking closely at IP-related claims.  “It’s not right when another country lets our movies, music, and software be pirated,” Obama said:  “Tonight, I’m announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trade practices in countries like China. “

What will be the nature of this Trade Enforcement Unit? During the Bush administration, a “top to bottom” review at the U.S. Trade Representative’s office resulted in the creation of a China trade enforcement unit within USTR that took the lead on China trade cases at the WTO.  Claire Reade, the current Assistant USTR for China was the head of that unit.  Continue reading