CNIPA’s Notice on Cancelling Patent Subsidies: A Deeper Dive

On January 27, 2021, the CNIPA issued the “国家知识产权局关于进一步严格规范专利申请行为的通知” (Notice on Further Strictly Regulating Patent Application Behavior)”. Although the Notice, on first glance, is reacting to the USPTO Report and is transformative in nature, it in fact builds upon prior efforts of CNIPA and other agencies, it does not completely address issues involving market externalities, such as subsidies, in patent filings.

Phase 1 and CAI: A Tale of Two Agreements

CAI, RCEP and the Phase 1 Trade Agreement all responded to different economic, trade demands and political urgencies. The CAI has been understood as a sign by the Biden administration that the European Union will pursue its own trade relationship with China based on its own interests. While the IP and forced technology transfer provisions of the Phase 1 Agreement helped establish new standards in China that are applicable to all countries, the non-IP provisions of the Phase 1 Agreement were not kind to Europeans and other allies in their preferential buying requirements. The EU, however, did not significantly advance IP protections in the CAI text. The bright side of this picture is that the CAI leaves space for the United States and the European Union to further coordinate strategies on IP protection in China.