A Statistical Snapshot of IP Prosecution, Admin. Enforcement and Monetization for 2018

As reported by zhichanli, CNIPA (the new agency formed from SIPO, SAIC and AQSIQ’s – IP authorities within the State Administration for Market Regulation) held a news conference on January 10 to report on statistical developments for 2018.  Here are some of the highlights:

Explosive Patent Growth Continues: 1,542,5000 invention patent applications were received by CNIPA, an increase from 2017 when it was 1,381,594.  432,000 patents were granted.  Of these 346,000 were domestic patent applications (2017: 326,970).  This leaves 86,000 foreign applications for 2018 (2017: 93,174).  There was therefore an increase of  5.8% to 19,030 in Chinese domestic patent grants in 2018, while foreign grants appear to have dropped by 7.7% to 7,174.  Any drop in a growing economy and IP system can be indicative of a problem of some type.

In total 93.3% of the domestic invention patents were service inventions, which is one indicator of possibly increasing quality.    Huawei remained the lead domestic filer with 3,369 invention patent applications.

CNIPA had a busy year examining 808,000 invention patents, 1,874,000 utility model patents (an increase from 1,687,593), and 667,000 design patents (an increase from 420,144).  The PRB heard 38,000 cases, resolved 28,000 and invalidated 5,000 patents.

Comparative data on 2017 is drawn from this report.

Trademarks Too, on Overdrive: CNIPA received 7,337,1000 trademark applications (2017: 5,748,00) and registered 5,000,7000.  Of these, 4,797,000 were domestic applicants.  In aggregate, there were 18,049,000 trademarks registered in China (2017: 14,920,000).  The good news is that the rapid growth in TM applications is slowing.  In 2017, there had been a year-on-year increase of 55.7% in trademark applications. In 2018, the increase was “only” 31.8%.

Patent Administrative Enforcement Continues to Be the Focus:  CNIPA reported 77,000 administrative patent cases, with an increase of 15.9% over the previous year.  35,000 cases involved patents disputes, of which 34,000 involved infringement (an increase of 22.8%).  43,000 cases involved counterfeit patents, with an increase of 10.9%.  There were also 31,000 cases involving illegal trademark activities.  This was an increase from approximately 30,000 the year before, which was itself a decrease of 5.1% from the prior year.  The apparent administrative enforcement realignment to patents thus continues, despite recent moves to improve the civil patent system, including the establishment of a specialized IP court at the SPC level, and the relatively high historic utilization of the administrative trademark system by foreigners.

Another odd development: 2018 marked the launch of the first administrative case involving infringement of a registered semiconductor layout design.

TM’s Remain Number 1 in Geographical Indications: There were 67 sui generis GI registrations approved, presumably under the former AQSIQ system, and 961 GI trademarks registered.   The trademark-based GI system thus appears to be occupying a dominant role.

Cross-border Trade In IP – is it Growing:  CNIPA also reported that “usage fees” for IP rights in cross border trade increased to 35 billion USD.  Comparative data to prior years and breakout data with individual countries would be especially useful, in order to do year-on-year comparisons and to also compare with US data on licensing revenue.  As reported in an earlier blog, according to official Chinese statistics for 2013, technology import contracts into China were reported at 41 billion dollars, with patent licensing contracts constituting 15.4% of that total.  I don’t have comprehensive data to make even preliminary comparisons at this time – and such data would be highly useful.

Summary: Altogether, the report shows a rapidly growing huge IP system, with active government involvement, encouragement and planning.  The report also suggests that there may be a diminishing foreign role, relative and/or absolute, in certain areas.  Finally, this report is the first hint of how the combined CNIPA may report on its joint activities in patents, trademarks, semiconductor layout designs, GI’s and administrative enforcement.  Additional data is usually released around IP Week of each year (April 26).

NDRC IP Abuse Guideline Out For Public Comment

IPabuseguidelines

NDRC has released a draft for public comment of its Antitrust Guidelines for Abuse o IP知识产权滥用的反垄断指南(征求意见稿)(English language wordcloud above).   As with the NDRC questionnaire this appears to have been selectively released although some versions have also been made available on line by bloggers and the like.  Several organizations are commenting on it, and some bloggers have made its content publicly available.  The release of the guidelines has also been reported by the media based on NDRC presentations at public conferences.

Below is what I believe is the Chinese text regarding on abuse of dominance involving intellectual property rights.  Unfortunately I do not have an English text I can release.  I have added English captions so that non-Chinese readers can see some of the key areas discussed.

I did notice that the provisions on the availability of injunctive relief for infringement of standards essential patents thankfully address “whether the two negotiating parties in the process of negotiations have shown real willingness to negotiate”, which I believe is a significant problem in the Chinese environment.  Interestingly, in addressing the problem, the draft incorrectly identifies requests for injunctive relief as “the request of the patentee of a judicial body to issue an order to enjoin use of relevant patents.”  In fact, I believe the injunctive relief that is sought is typically to enjoin infringement, as there has been no authorized use of the patents in the absence of a license.

I am also wondering whether other agencies, notably MofCOM and SAIC are also preparing drafts of the abuse IP guidelines, particularly as SAIC only recently released its rules in this area.

———–

三、涉及知识产权的滥用市场支配地位行为

 (一)不公平的高价许可费 [unreasonably high royalties]

权利人有权就其知识产权获得合理的经济补偿,这是弥补其研发投入和激励创新的基本动力,权利人收取许可费的行为,通常不会受到《反垄断法》的规制。但是,如果权利人滥用其具有的市场支配地位,向被许可人收取不公平的高价许可费,会排除、限制竞争,损害消费者利益。

分析和认定知识产权权利人是否收取不公平的高价许可费,可考虑以下因素:

  1. 相关知识产权许可历史或者可比照的许可费标准;
  2. 权利人是否超过知识产权覆盖的范围收取许可费;
  3. 权利人是否迫使被许可人接受不合理的许可方式或者许可期限;
  4. 权利人进行一揽子许可时是否迫使被许可人接受过期或者无效的知识产权。拒绝许可是权利人行使知识产权的一种表现形式,一般情况下,权利人不承担与竞争对手或者交易相对人进行交易的义务。但是,具有市场支配地位的知识产权权利人无正当理由拒绝许可,同时符合下列条件的,可能排除、限制竞争:
  5. (二)拒绝许可 [refusals to license]
  1. 拒绝许可可能导致相关市场上的竞争或者创新受到不利影响,损害消费者利益或者公共利益;
  2. 许可该知识产权不会对权利人造成损害。(三)搭售 [tying]搭售可能对相关市场的竞争产生不利影响,主要表现为排除了被搭售品市场中其他供应商的交易机会,并损害了消费者的选择权。同时,搭售也可能对相关市场的竞争产生有利影响,主要表现为可以降低交易成本,促进产品功能的完善等。搭售的正当理由,需要在个案中进行具体分析。如果搭售是基于技术兼容、产品安全、产品性能、交易成本等方面的考虑而实施的,可能被认为具有正当理由。具有市场支配地位的权利人在交易中附加下列限制条件,可能排除、限制竞争:
  3. (四)附加不合理的交易条件 [Attaching unreasonable conditions of trade]
  4. 具有市场支配地位的经营者没有正当理由,违背交易惯例、消费习惯等或者无视不同知识产权或商品的性质及相互关系,将不同知识产权,或者知识产权与商品强制捆绑销售或者组合销售,并且使该经营者将其在搭售品市场的支配地位延伸到被搭售品市场,可能排除、限制竞争。
  5. 搭售是指权利人就一项知识产权以许可、转让等方式行使时,违背交易相对人的意愿要求其接受另一项知识产权的许可或转让,或者从权利人处或者权利人所指定的第三人处购买某种商品。
  6. 拒绝许可的正当理由,需要在个案中根据具体情况进行分析,通常考虑的因素包括:被拒绝的潜在被许可人缺乏必要的质量、技术保障或支付许可费的能力,能够确保技术的正当使用或者产品的安全和性能;被拒绝的潜在被许可人使用知识产权行为可能会对节约能源、保护环境等社会公共利益产生不利影响等。
  1. 要求交易相对人将其改进的技术进行独占性回授;
  2. 禁止交易相对人对其知识产权的有效性提出质疑,或者针对其提起知识产权侵权诉讼;
  3. 限制交易相对人利用竞争性的商品或者技术;
  4. 对过期或者无效的知识产权主张权利;
  5. 禁止交易相对人与第三方进行交易,或者对交易相对人与第三方的交易行为在对象选择、交易地域等交易条件方面进行限制。一般来说,知识产权权利人对不同的被许可人实施不同的许可条件,是权利人的自由。但是,具有市场支配地位的知识产权权利人对被许可人实施差别待遇,同时符合下列条件的,可能排除、限制竞争:
  6. (五)差别待遇 [Differential treatment/discriminatory treatment]
  1. 拒绝被许可人提出与其他被许可人实质相同的交易条件;[the party refused a license offers substantially similar conditions of trade of a prior licensee]
  2. 差别待遇对被许可人参与相关市场的公平竞争产生了显著不利影响。四、涉及标准必要专利的知识产权行使行为 [Concerning Implementation of Standards Essential Intellectual Property] 具有市场支配地位的标准必要专利权利人下列行使权利的行为,可能排除、限制竞争:标准必要专利权利人有权就其专利获得合理的激励性回报。但是,标准必要专利权利人所要求的许可费应当合理体现相关标准必要专利的经济价值。如果拥有市场支配地位的标准必要专利权利人向被许可人索取不公平的高价许可费,可能排除、限制竞争,损害消费者利益。
  3. 分析和认定标准必要专利权利人是否收取不公平的高价许可费,可以考虑以下因素:
  4. (一)收取不公平的高价许可费 [Receiving unfairly high license fees]
  5. 专利权人持有标准必要专利并不必然导致其具有市场支配地位。分析和认定标准必要专利权利人是否具有市场支配地位,可考虑以下因素: [the following may be considered](1)相关标准的市场价值与应用程度;[the value and use of the standard in the market](2)是否存在替代性标准;[are the substitutable standards](3)行业对相关标准的依赖程度及使用替代性标准的转换成本;…(4)不同代际相关标准的演进情况与兼容性;(5)标准必要专利许可双方的相互制衡能力等。
  6. 分析和认定是否构成差别待遇,在考虑被许可人的交易条件是否与其他交易对象实质相同时,[in analyzing and determining whether there is differential treatment, and considering whether the conditions of trade of a licensee are difference in substance, the primarily consideration should be from the the rightsholder perspectives regarding whether the intellectual property transaction costs are the same.]  主要从权利人的角度考量不同许可行为的交易成本是否相同。同时,还会综合考虑该知识产权的用途和使用该知识产权生产产品的属性、销售范围、销售量、销售额与利润率等因素。
  1. 被许可的标准必要专利的技术价值;
  2. 相关产业的技术特点;
  3. 符合相关标准的产品所承担的整体许可费情况;
  4. 相关标准必要专利所负担的许可承诺;
  5. 相关标准必要专利许可历史或者可比照的许可费标准;
  6. 相关产品市场上下游合理的利润空间。在标准必要专利许可中,下列交易条件可能排除、限制竞争:
  7. (二)附加不合理的交易条件 [Attaching unreasonable conditions of trade]
  1. 捆绑非标准必要专利;
  2. 强制要求免费交叉许可和回授;
  3. 强制要求被许可人给予许可人所指定的第三方免费专利许可;
  4. 就过期或者无效专利继续收费;
  5. 禁止被许可人质疑专利有效性或者针对许可人提起专利侵权诉讼。禁令救济是专利法赋予专利权人的救济手段,标准必要专利权利人有权依法申请禁令救济以维护其合法权益。但是,如果标准必要专利权利人利用禁令救济申请迫使被许可人接受其提出的不合理许可条件,可能排除、限制竞争。
  6. 分析和认定标准必要专利权利人申请禁令救济是否排除、限制竞争,可考虑以下因素:
  7. (三)滥用禁令救济 [abuse of injunctive relief]
  1. 谈判双方在谈判过程中所表现出来的真实谈判意愿;
  2. 相关标准必要专利所负担的有关禁令救济的承诺;
  3. 谈判双方在谈判过程中所提出的许可条件及许可条件的合理性;
  4. 申请禁令救济对双方谈判地位、相关市场及下游市场竞争和消费者福利的影响。

..consider the following factors:

  1. whether the two negotiating parties in the process of negotiations have shown real willingness to negotiate;
  2. whether the relevant standardsessentialpatentsare burdened by commitmentsrelating to injunctiverelief;
  3. the proposed licensing conditions and the reasonableness of the licensing conditions brought forth by the two negotiating parties during the negotiation process;
  4. the role of applications for injunctive relief in negotiations of the parties, competition in the relevantmarketand the downstream market, and the effectson consumer welfare.

本指南所称禁令救济,是指专利权人请求司法机构或者准司法机构颁发的限制使用相关专利的命令。

Injunctive relief as referred to in this guide, refers to the request of the patentee of a judicial body to issue an order to enjoin use of relevant patents.

SAIC Releases IP Abuse Rule

saicwordcloudblackwhite

The State Administration of Industry and Commerce has issued final Rules on Stopping the Abuse of Intellectual Property to Eliminate or Restrict Competitive Conduct on April 7 (Order No. 74)  (关于禁止滥用知识产权排除、限制竞争行为的规)with an effective date of August 1, 2015.

Above is a wordcloud drawn from a machine translating (Bing) of the new SAIC IP abuse rules.

New Opinion from SAIC and MIIT on Reinforcing Collaboration on Supervision of Domestic Online Trading Sites

On October 13, 2014, SAIC and MIIT jointly issued  “Opinions on Reinforcing Collaboration on Supervision of Domestic Online Trading Websites and Active Promotion of the Development of E-commerce”. Simone IP Services has provided a translation here.  The original announcement of SAIC is found at: http://www.scaic.gov.cn/zwdt/zxfb/201410/t20141013_177728.html.

The Opinion sets up a collaboration mechanism between these two important agencies.  The intention behind this collaboration is to help address “management of domestic online  trading  websites,  forcefully  strike  against  illegal  operation  of domestic online  trading  websites, strive  to  create  an  online  trading environment of  fair competition, earnestly  safeguard  the  legitimate  rights and  interests  of  consumers  and vendors,  and  actively  promote  healthy development  of  e-commerce,”  The issues that the collaboration is intended to address include “phenomena  such  as forgery and fraudulent  use  of  legitimate market players’ identity for setting up website, intellectual property rights infringement,  the sale  of counterfeit  and  shoddy  goods,  malicious  fraud, unfair  competition,  false  advertising, etc.”

Online infringement has also been a focus of the National IP Leading Group. It issued a “Strategy for Working on Striking Against Infringement of Intellectual Property and the Manufacturing and Sales of Substandard Products in the Online Environment” ( 打击联网领域侵犯知识产权和 售假冒伪劣商品工作方案 ) on June 18, 2014 to step up enforcement and coordination for the second half of 2014.

Although this Opinion appears to be a positive step, greater international collaboration with on-line infringement a focus on the domestic environment may also need to be supplemented with increased international cooperation to address cross-border trade in infringing and substandard products.

 

ABA Conference on 8th Draft of SAIC IP Abuse Rules in DC

This is from Yee Wah Chin via Don Clarke’s Chinalaw list-

SAIC’s 8th Draft AML/IP Rules

August 26, 2014

Noon-1:15PM Eastern

On June 11, 2014, China’s State Administration for Industry and Commerce (SAIC) released the 8th Draft of its Anti-Monopoly Law/IP Rules.  Panelists from the U.S. Federal Trade Commission, academia, and private practice will discuss controversial provisions of the 8th Draft—including the application of the essential facilities doctrine to intellectual property rights, liability for failure to disclose essential patents, and liability for failure to license patents found to be essential on FRAND terms—as well as possible implications, and the U.S. approach to such issues. 

Moderator

D. Daniel Sokol, Levin College of Law; Senior of Counsel, WSGR LLP

Panelists

Koren W. Wong-Ervin, FTC

Yee Wah Chin, Ingram Yuzek Gainen Carroll & Bertolotti LLP

H. Stephen Harris, Jr., Winston & Strawn LLP

Tad Lipsky, Latham & Watkins LLP

Location: Winston & Strawn LLP

1700 K. St. N.W. Washington D.C. 20006

To register, open this file:  ABA Program_SAIC’s 8th Draft IP Rules_August 2014.

The ABA’s comments were previously posted by me: ABA SAL-SIPL-SIL SAIC IP abuse rule comment final package.

Microsoft under Chinese Antitrust Scrutiny?

Yesterday, July 28, the Western press, including the Washington Post and South China Morning Post, as well as Chinese online media reported that the State Administration for Industry and Commerce (SAIC), one of China’s three antitrust regulators, was investigating Microsoft for possible antitrust violations by visiting Microsoft’s offices at Beijing, Shanghai, Guangzhou and Chengdu.

Chinese IT analysts suggested that if there were an antitrust investigation, it would involve Microsoft’s operating system, which controls 95% of the market.   However, analysts also noted that while PC OS has not been a principal focus of attention of China’s antitrust regulators, China has potentially eight domestic competitors to Microsoft in the OS sphere, and that there market share has been growing in part through government procurement efforts. While OS is a basic platform for building computer systems and services, these analysts noted Microsoft’s technological depth in this area has brought it many competitive advantages.

One hopes that Chinese regulators note that the 95% “market” dominance figure that is being discussed necessarily refers to the legitimate, non-pirated market only since Microsoft’s chief competitor in China is likely the stolen pirated versions of its own software.

The limited news that is available makes it difficult to infer much. SAIC handles non-pricing related investigations involving monopolistic agreements, and abuse of dominance. In recent months, however, NDRC has undertaken several price-related antitrust investigations. SAIC is a vast agency which also has broad authority in a range of IP and market regulation areas, including “abuse of IP” pursuant to article 55 of China’s Antimonopoly Law as well as supervisory authority under China’s contract law.

History also offers little guidance, in part because of Microsoft’s extensive involvement in a range of tech sectors. A Hong Kong based company reportedly accused Microsoft of discriminatory and excessive pricing for its software products in 2012 in a case in Guangdong. .” On a positive note, however, Microsoft’s merger with Nokia was also recently approved by China’s antitrust regulators

China does appear to be more clearly expanding its efforts to regulate technology markets.   These efforts began even when there was an unclear legislative basis. The press had reported that Microsoft had been reported to be the subject of an antitrust investigation by SIPO in 1998, which thereafter led nowhere except to a flurry of denials. In fact, as I noted in the 2011 book I coauthored on Antimonpoly Law and Practice in China, MofCOM Vice Minister Yi Xiaozhun complained even before implementation of the antimonopoly law (2007) of high licensing fees “running counter to fair competition”. More recently,the Huawei/Interdigital case appears to have been a harbinger of a more active role by the government, particularly NDRC, in regulation of foreign players in China’s technology markets.

We noted in the 2011 book that there are likely be “increasing concerns regarding policies that appear oriented towards enhancing national competitiveness rather than competition per se. These concerns over an emerging Chinese “techno-nationalism” have been escalating with increasing frequency.” At the same time, I also expressed hope that “China’s emergence as a major center of innovative intellectual property activity may alter policies that appear to diminish the value of foreign IP rights and may also temper rhetoric that is occasionally heard of using competition law and other policies as ‘counter strategies’ to Western ‘IP oppression.’”  More recently, these themes were echoed at the recently concluded Strategic and Economic Dialogue where China “recognized that the objective of competition policy is to promote consumer welfare and economic efficiency, rather than to promote individual competitors or industries, and that enforcement of its competition law should be fair, objective, transparent, and non-discriminatory. ”

These days at conferences no one seems to doubt that China is interested in IP protection. The “goods news” remains that China is interested in IP. Unfortunately, the bad news is also that China is interested in IP  —  as a tool of development for its “socialist market economy.” Striking the right balance will be a critical issue for both China and its trading partners in the years ahead.

The opinions expressed above are the author’s own.

New SAIC Draft of IP Abuse Rules to Be Released for Public Comment

According to press reports, SAIC is set to release on Wednesday June 11 a new draft of its SAIC Rules on Ceasing Abuse of Intellectual Property That Eliminate or Restrict Competition  (Draft for Public Comment)  工商行政管理机关禁止滥用知识产权排除、限制竞争行为的规定(征求意见稿).

Key components of the draft:

Refusing to license IP,  tying of intellectual property and unreasonable restrictions on IP may be deemed anticompetitive.

Certain conduct, such as are involved in patent pools, standards setting and standards implementation, collective management of copyright, and abusive mailing of IP infringement warning letters, can constitute monopolistic agreements, and/or abuse of dominance, but in most cases will be the latter.

Fines and bases for enforcement are also set forth in the draft.

This is another version of the draft of 2012 and was released for public comment on two separate occasions since 2013. The American Bar Association, as well as foreign governments and the Chinese public had all commented on prior drafts.

I hope to post more on this as further information develops.

Source: Sina.com (http://finance.sina.com.cn/china/20140610/191719370076.shtml), and other sources.