State Council Clears Patent Law Amendments, Forwards to NPC, Patent Linkage Is Not Referenced ….

According to the official central Chinese government website, on December 5, 2018, Premier Li Keqiang chaired a State Council meeting which cleared the long awaited proposed draft of the patent law amendments.  The description of the draft is set forth below:

为进一步加强专利权人合法权益保护、完善激励发明创造的机制制度、把实践中有效保护专利的成熟做法上升为法律,会议通过《中华人民共和国专利法修正案(草案)》。草案着眼加大对侵犯知识产权的打击力度,借鉴国际做法,大幅提高故意侵犯、假冒专利的赔偿和罚款额,显著增加侵权成本,震慑违法行为;明确了侵权人配合提供相关资料的举证责任,提出网络服务提供者未及时阻止侵权行为须承担连带责任。草案还明确了发明人或设计人合理分享职务发明创造收益的激励机制,并完善了专利授权制度。会议决定将草案提请全国人大常委会审议。

A rough translation is as follows:

In order to further strengthen the protection of the legitimate rights and interests of the patent rights holder, improve the mechanism system for stimulating creation of inventions, and raise those mature practices for effectively protecting patents into law, the meeting passed the “(Draft) Amendments of the Patent Law of the People’s Republic of China.” The Draft aims to increase the severity of penalties for intellectual property infringement, draws on international practices, significantly increase the amount of compensation and fines for willful infringement and counterfeiting of patents, and significantly increase the cost of infringement to deter illegal acts;  it clarifies the burden of proof for the infringer to cooperate in providing relevant information, and sets forth that the network service provider should bear joint liability for not stopping infringement in a timely manner. The Draft also clarifies the incentive mechanism for inventors or designers to equitably share the proceeds from the creation of service inventions, and improves the patent authorization system. The meeting decided to bring the Draft to the NPC Standing Committee for its review.

In a possibly unrelated development, the National Development and Reform Commission released a Chinese interagency Cooperation Memorandum of Understanding on December 4, 2018  to deal with entities that have lost trust due to IP (patent) infringement. 关于对知识产权(专利)领域严重失信主体 开展联合惩戒的合作备忘录.  Compared to the proposed patent law amendments, this lengthy document focuses even further on public law aspects of a patent law system, including recidivist infringers, “irregular” patent applications, providing false documents to the patent office, etc. and includes a range of 33 different punishments to be meted out from a wide number of agencies, including denial of subsidies, debarment for procurement purposes, denying access to range of government programs, prohibiting leisure travel, etc.

The two documents taken together may suggest a disheartening renewed emphasis on administrative measures to deal with patent infringement and innovation incentives.  Such measures may be intended to address US trade concerns about IP infringement and “IP theft”.  They may also represent a return to China’s increasingly administrative enforcement-oriented approach to patent issues.  However, this renewed focus on administrative measures is also occurring the same time as China is moving to quickly establish a new national appellate IP court attached to the SPC by as early as the beginning of 2019.  This new court will be a national appellate circuit court with jurisdiction over administrative appeals and technical IP matters and will likely include seasoned judges from Beijing and the SPC itself.  Much work needs to be done to get this court off the group quickly.

What, however, is missing from both these documents is any reference to a patent linkage system for pharmaceutical products, which has been much talked about in this blog.  As previously reported, former CFDA Commissioner BI had been dismissed from his post as party secretary to SAMR this past summer in response to China’s tainted vaccine scandal. A State Council notice (no. 83) of August 20, 2018 on deepening reform in China’s medical sector thereafter also ominously omitted any reference to patent linkage.

As the original deadline for passage of the patent law amendments was the end of this year, my guess is that this draft may be referred on to the NPC by the end of this year, and passage may occur as early as the first half of next year.  I assume that a draft for public comment will be released by the NPC sometime early next year.  Generic and innovative pharmaceutical companies that believe a linkage system would help accelerate innovation in the pharmaceutical sector and support early introduction of high quality generics, may consider commenting on these issues once a public comment draft is made available.

New State Council Decision on Intellectual Property Strategy For China as a Strong IP Country

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On July 18, 2016, the State Council issued a new policy document,国务院关于新形势下加快知识产权强国建设的 若干意见-重点任务分工方案  — the “Opinion of the State Council on Accelerating the Construction of Intellectual Property Powers for China as an Intellectual Property Strong Country under the New Situation –Division of Tasks.”  Here’s a link to this action plan (docketed as State Council  Working Office No. 66)  , and a link to the machine translation, from which the world cloud above is drawn.   The action plan itself is drawn from a State Council document issued in 2015 on accelerating the establishment of a strong IP country in the context of a new situation.  This 2015 document identified such problems as China being a big country for IP, but not a strong country, protection was not adequately strict, infringement was easy and pervasive, and that these factors were affecting industry’s efforts to innovate.

As I discussed previously, the idea of China needing to become a strong IP country appears in the 2014-2020, National IPR Strategy Action Plan, which has the goal of “Striving to Build A Strong IPR Country”  (努力建设知识产权强国). While China indeed has become “big” on most scales: invention patent filings, trademark, utility models and design patents, intellectual property litigation, criminal IP litigation and administrative litigation, to name a few, “strong” suggests quality, which is much harder to judge.

Here are a few specific observations about this action plan:

  1. Much of the action plan repeats existing efforts, through the MofCOM IPR Leading Group and SIPO’s National IP Strategy Office, and their current efforts at analyzing and coordinating IP effort, as well as cooperative activities (Arts. 1, 3, 13, 15, 18, 21, 22, 25, 30, 44, 88, etc.).
  2. There are greater efforts to incorporate IP into macroeconomic strategies, such as in calculations regarding the national economy and national social welfare (Art. 9), as well as credit reporting (Art. 23).
  3. Increasing compensatory  and punitive damages are a focus (Arts. 14), which have also been an effort of China’s IP courts.  This is one of the key civil-law reform proposals in this plan.   There continues to be an undue emphasis on speed, which I assume is focused on patent administrative enforcement as a more rapid remedy (Art. 16).  China is already a fast moving IP environment.
  4. International cooperation in criminal enforcement is underscored (Arts. 19, 21, 22).
  5. Regarding trade secret protection, the focus is on revising trade secret laws, and protecting IP when employees change jobs (Art. 24).  Changes to China’s discovery regime and other appropriate measures which would greatly assist trade secret claimants, are not discussed.
  6. Geographical indications are a focus, including drafting a stand-alone GI law at “the appropriate time” (Art. 32), increasing the role of trademarks in promoting farmer prosperity (Art. 58), and promoting GI products (Art. 90).
  7. Regarding the long-delayed IP Abuse Guidelines, NDRC, MofCOM, SAIC and the State Council Legislative Affairs Office are all listed as being responsible for drafting “according to their responsibilities” (Art. 36).  Rules on standard essential patents that are based on FRAND licensing and “stopping infringement” are also noted (Art. 38), with the involvement of AQSIQ, SIPO, MIIT, and the Supreme People’s Court).  Encouraging standardization of Chinese patents also remains a priority (Arts. 61, 71).
  8. Service Invention Regulations, an area of some controversy are not specifically noted as a priority.  Encouragement is to be given to enterprises to set up appropriate invention recognition and reward programs in accordance with law (Art. 45), and research is to be undertaken in giving compensation for new scientific achievements (Art. 46).  The language may suggest that more flexibility will be given contractual arrangements and the market, as was agreed to bilaterally between China and the United States.   Relevant agencies involved in these efforts include SIPO, MoST, Ministry of Education, Ministry of Finance, Ministry of Agriculture, SASAC, Chinese Academy of Sciences, MIIT, Ministry of Defense, etc.
  9. Chinese universities are also encouraged to become more actively engaged in commercialization of technology, through establishment of technology transfer offices (Art. 53) and other efforts.
  10. The impact of US efforts to study IP-intensive industries in the US economy is also apparent in this plan in terms of the government’s efforts to investigate promoting IP intensive industries in the Chinese economy, government procurement of products from IP intensive industries, and developing model districts for IP intensive industries (Arts. 55-56).  Interestingly, there is no specific reference to engaging economists on any of these efforts, despite the role of foreign economists in similar efforts, some of who have also directly engaged China on how to determine IP-intensity in an economy.
  11. There is discussion of using tax and financial policies to promote IP creation in China (Arts. 98, 99).  There is no explicit discussion of harmonization with OECD guidelines regarding patent boxes and other forms of international tax avoidance.
  12. The report discusses a number of strategies and plans to reduce overseas IP risks facing Chinese companies, including assisting Chinese companies in strategic planning, patenting and licensing (Arts. 72-76), developing information resources on risks and cases (Arts. 78-79), and – rather ominously – developing policies for countering large intellectual property cases overseas (with the support of MofCOM, Customs, SAIC, AQSIQ, NCA, and the China Council for the Promotion of International Trade – “CCPIT”).   There is no discussion on any changes to current technology import regulations which impose onerous indemnity and non-grant back requirements on foreign licensors.
  13. The report directs research to be conducted of placing IP officials overseas in important countries, region and IP organizations.  Although China’s current IP attaché in the United States is a MofCOM employee, the responsible agencies for this effort include SIPO, NCA, SAIC, and CCPIT (Art. 85).  The first Chinese IP attaché was dispatched to the United States pursuant to a bilateral commitment of the  2005 Joint Commission on Commerce and Trade.
  14. The report notes that China will become more involved in promoting a more “fair and reasonable” international IP regime, through support of the Doha amendments to the TRIPS Agreement, the Convention on Biodiversity and various IP conventions.  The Hague Convention on Industrial Designs is noted, but not UPOV 1991.  Promotion of intangible heritage and folklore are also noted (Arts. 59. 87).
  15. IP talent creation and training are also key elements of the plan (103-105).

 

Often in looking at plans like these, it is also equally important to ask what is not being covered.   The plan does not focus enough on a China where there is greater scientific collaboration with foreign scientists and engineers, which are also result in an increasingly large number of co-invented patents.  Similarly, increasing Chinese investment in IP-intensive industries in the United States means that many Chinese companies will own substantial IP interests and may be less inclined to view IP issues as “us” vs “them.”  The relative under-emphasis on civil remedies for IP issues in this plan is also troubling, as the availability of adequate civil remedies is what drives IP commercialization.

The report also does not suggest increasing the role of economists in IP and antitrust agencies, despite a clear focus on increasing the IP-intensity of the Chinese economy. Gaps in Chinese law, such as denial of copyright protection for sports broadcasting, weak protection for trade dress, and “circular” litigation between the patent and trademark offices and the courts which may delay final adjudication on matters, controlling trademark squatting and subsidies for unexamined patents are not discussed.

Although there are many positive aspects of this plan, I believe that focusing on issues like compulsory licensing, the Doha Declaration and folklore, or what appears to be political solutions to overseas infringement may also not deliver as much value to the Chinese economy and China’s scientists, engineers, artists and entrepreneurs, as returning to core IP concepts which let the market govern IP creation and enforcement through such measures as improving the scope of rights that are protected under Chinese law, limiting government intervention, increasing the role of the civil judicial system, and promoting increased collaboration.

USPTO-SIPO To Conduct Second IP Licensing Program

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USPTO and SIPO are cohosting another program on IP licensing on July 29 at SIPO’s training center in Beijing. I reported on the last program earlier this year here. Although the final agenda is not set, this program is intended to take a “deeper dive” on many of the issues raised in the earlier program. Registration can be accomplished by emailing jia.liu@trade.gov.

Note: Drawing is used pursuant to a Creative Commons License for non-commercial purposes.(http://www.iisvolta.gov.it/home/).

USPTO/SIPO Program on Patent Licensing and Technology Transfer – A Quick Readout on a 41 Billion Dollar Business

A China-U.S. Joint Seminar on Patent Licensing and Technology Transfer was jointly hosted by SIPO and USPTO at SIPO’s China Intellectual Property Training Center in Beijing on April 15, 2015.  The focus of the program was on contractual and non-antitrust aspects of technology transfer.  Program speakers included an economist discussing the economic reasons for licensing and current trends, an accountant on tax planning for licensing transactions, Chinese and American lawyers and officials, as well as wide spectrum of company representatives primarily in the IT sector, but also including the life sciences.

Here are my personal, general observations of the points made by the speakers:

To begin, speakers  addressed difficulties in understanding the data on technology transfer.  According to China’s Statistical Yearbook on Science and technology (2007-2014), the value of technology import contracts into China was 41.09 billion USD for 2013, nearly triple of what it was in 2005.   Patent license fees accounted for 15.4% of the total and proprietary technology was 37.7%.  Technology consultation and services were  29.7%.  However, many speakers also noted the difficulty in collecting comprehensive data.   Moreover, payment mechanisms such as extensive use of tax havens and transfer pricing in licensing technology further distorts data on bilateral technology flows.

Several speakers introduced the range of regulations in China affecting technology transfer.  These regulations included the Contract Law, Technology Import /Export Regulations, rules on registering patent licenses, restricted areas of technology trade, license registration rules, and taxation rules.

Many foreign speakers expressed concerns about obligatory provisions of China’s Technology Import/Export Regulations (“Regulations”), including provisions regarding whether the foreign licensor needs to indemnify a licensee against third party infringement, as well as other provisions on grant-backs, no challenge clauses, etc.  Article 24 of the Regulations was noted several time by Chinese and foreign speakers alike, including its conflict with article 353 of the Contract Law, which would give authority to negotiate indemnities if the contract did not involve a technology import into China.  Several Chinese speakers thought that the Contract Law, as superior legislation, may govern any conflict between the two.  However there were significant contrary arguments, including the fact that the Regulations were both more recent and more specific (I tend to side with this argument).  Many felt that these Regulations were out of date and not suited to China’s current circumstances, particularly in light of China’s desire to become a technology trade player, as well as the difficulties of mandtory indemnity provisions in technology imports from start-up companies or in litigtion dense technologies (such as smart phones).

There was a general consensus of a need for more information on the impact of indemnity/grant back and other clauses on licensing transactions.  The Regulations are a source of concern even if they are of uncertain legal impact.  One speaker noted that the uncertainty caused by the Regulations had generated considerable legal work over the years.  Some speakers noted that they thought it would be helpful if the courts provided additional guidance on the Technology Import/Export Regulations and the Contract Law provisions on technology contracts in order to achieve greater assurances about how best to structure technology transfer agreements.

A few speakers suggested that an appropriate strategy in handling mandatory indemnities is to conduct a freedom to operate analysis and negotiate risks, perhaps by reducing them to a liquidated amount in a contract.   Another speaker thought that a way to bypass the warranty provisions of the Regulations is by arbitrating outside of China under New York or other foreign law. However, there was also concern expressed about whether arbitral decisions would still be governed by Chinese policy, or arbitral awards might not be enforced within China.    Many speakers noted that choosing foreign law could lead to uncertain results.  Moreover, if enforcement of some kind is needed in China, choice of foreign law may be sub-optimal as Chinese courts will not enforce foreign judgments and it will be impossible to obtain preliminary injunctions or other immediate relief.  Note that I have discussed the issue about using foreign choice of law in technology transfer contracts elsewhere on this blog, as well as problems that arise if US law is used to enforce the contract in the United States.

Another proposal of a speaker at this program was, where possible, to change the cost of the technology to zero and place more value in to service contracts.  However, one speaker thought this alternative also posed risks, including the possibility of being considered a joint infringer in the event a law suit is brought against the “licensee”/ purchaser.

The Regulations also appear to have an uncertain jurisdictional scope.  One speaker mentioned that one way to avoid application of Chinese law is by licensing foreign technology to an overseas subsidiary of a Chinese company, and then having this company license the technology back to China.  Another speaker suggested that transactions such as these might not be viewed as an import of technology into China which should be governed by the Regulations.  At the same time, regulatory officials have viewed a transfer of technology within China by a foreign-invested company to a Chinese company as a technology import notwithstanding that the transaction occurred solely within China.

Speakers discussed difficulties in differentiating improved licensed technology which belongs to the licensee and the actual licensed technology under China’s mandatory grant back regime.  Another source of concern was determining when the technology has caused infringement if the licensed technology was proprietary in nature and was to be maintained as a trade secret.

Judicial settlement agreements and covenants not to sue were also discussed as alternatives to license agreements.  For example, under what circumstances when one settles a litigation would such an agreement no longer constitute a technology transfer agreement?    Is a covenant not to sue not a technology transfer agreement? I had the opportunity to raise the question of whether the  Regulations governed settlements of technology infringement cases of a senior Chinese judge at another conference – and the quick answer I received is that the answer is — unclear.

Speakers were generally optimistic about future prospects of enforcing audit clauses particularly in light of recent changes in China’s civil procedure law, judicial practices, and proposed changes to China’s patent law regarding production of documents and provisional measures.

Former Chief Judge Rader of the CAFC also provided a useful update on US case law involving no-challenge clauses, and smallest saleable unit as a basis for calculating damages.  He noted that in fact in some cases he now believes the market value of the infringing product should prevail, although the SSU doctrine was originally of his creation.

The role of registering contracts with MofCOM or assignments with SIPO was discussed, as well as MofCOM’s continued supervision of contracts when it registers a contract.  Several speakers also discussed an earlier MofCOM  (or perhaps MofTEC) notice which established an “unoffical cap” of royalties equalling 5% of net sales.  The experience of several speakers was that MofCOM will not say that there is a 5% cap, and that the contract needs to be “fair and reasonable.”  One speaker thought that this unofficial cap was not necessarily a deal breaker, although there remains a persistent belief that 5% is fair and reasonable.  This cap is of especial concern as data from the Licensing Executive Society suggests that average royalties for high tech sectors are 6%, and for life sciences about 5%.

Tax planning in licensing was also discussed, including indirect licensing from tax havens such as Belgium, Holland, Luxemburg and Ireland, as well as advantages to owning IP or technology locally in order to benefit from local Chinese incentives (such as High and New Technology Enterprise or R & D deductions).  An accountant noted that transfer pricing is of increasing concern in China – imposing a burden on licensors and licensees to prove that a transfer is priced at fair value.  It is likely that going forward third country licensors may not be able to obtain special incentives unless one controls and orchestrates the IP from the onward entity.   Moreover, a State Administration for Taxation Announcement (no. 16) provides that if you are paying from China to an overseas entity and the entity just owns the legal rights but doesn’t conduct substantive activities, the tax deduction may be completely denied, and they will reopen 10 years of tax returns.  This Announcement builds upon a previous announcement (146) of 2014.

China’s High and New Technology Enterprise program offers numerous incentives but also contains numerous restrictions, including regarding IP ownership, sufficiency of R & D conducted in China, and percentage of R & D of total turnover or percentage of profits derived from HNTE profits.   An accountant noted that this deduction is of declining use due to aggressive tax auditing when the incentives are used.   Moreover, there is a tension between transfer pricing and HNTE status.  One speaker noted that changes to the HNTE program are due in 2015.   This speaker noted that there is also an R&D super deduction is available, which is more readily obtained, but is also a strong audit risk.  Another HNTE risk is that if a company is developing core IP further and your original IP is no longer necessary, one could lose HNTE status.   Moreover, licensors may risk establishing a permanent establishment in China, particularly if the licensor is engaged in onshore trading.

All speakers and attendees I spoke with believed that this topic is nonetheless of increasing importance.  One academic privately noted to me that she thought licensing was not adequately discussed in academia, and that there was not enough focus by industry and government.   Attendees were also unanimous in wanting to see more programs of this nature going forward.

The preceding is an unofficial summary and should not be construed as a substitute for professional legal advice.  I hasten to add that one should also seek a tax professional for advice on tax planning.

Draft Service Invention Regulations Out For Public Comment

On April 2, 2015, the State Council Legislative Affairs Office (“SCLAO”) published a draft of the Service Invention Regulations along with an accompanying explanation.  The draft was prepared with the assistance of SIPO and the Ministry of Science and Technology.   Comments are due by May 2, 2015.

Here is a quick translation of what the explanation says about the “hot issue” of the balance between contracting autonomy and providing mandatory minimum rewards for inventors:

The draft fully respect the autonomy of the parties, and adopts the principle of priority of the agreement on the rights of ownership and incentive remuneration reached by the parties according to law.  At the same time, in order to prevent a disguised deprivation or restriction of the rights of the inventor by the employer, the draft establishes a certain restriction on the principle of priority of the agreement of the parties. The draft provides that whenever there is nullification of the inventor’s rights under these regulations, or when the enjoyment or exercise of these rights is subject to unreasonable contractual provisions or rules, those conditions are invalid.

草案充分尊重当事人的意思自治,在权利归属和奖励报酬方面采取约定优先的原则,即当事人依法达成的协议对权利归属和奖励报酬有约定的,优先适用其约定。同时,为了防止单位变相剥夺或者限制发明人的权利,草案对约定优先原则进行了一定限制,规定任何取消发明人依据条例享有的权利或者对该权利的享有和行使附加不合理条件的约定或者规定无效。

Licensing: A Forthcoming Program and Some Historical Perspective

With recent antitrust investigations in China, as well as China’s design to have more market-oriented targets for IP, export growth in IP rights from China is slated to grow from 1.36 billion USD in 2013 to 8 billion USD in 2020, according to the Action Plan for the National IP Strategy.  Commercialization-related goals were also found in the Third Plenum, to increase IP utilization generally.

In this light, attached is the agenda for a forthcoming USPTO-SIPO program on licensing of intellectual property, which will take place April 15 in Beijing.  There is no fee for the program.  Seats are currenlty only available on a wait-list basis.   U.S. companies and their counsel can wait -ist for the program by contacting Ms. Liu Jia at the USPTO office in Beijing: jia.liu@trade.gov.

I also recently recovered from my own files an unpublished case on technology transfer from China to the United States, from over 10 years ago in the Eastern District of Texas.  The case involved a Chinese university professor that licensed his technology to a US company to collect revenue and litigate, as necessary.   I was an expert witness in that case, involving Infineon Technologies.  Although China’s tech transfer regime has since changed considerably, as I recall the case dealt with using US choice of law for the licensing of a Chinese-owned Chinese patent and US patent, including whether defects in Chinese ownership or regulatory approval for the license could be cured after the case was filed.

In a previous blog post, I noted that “choice of law in IP and technology transfer contracts is a “sleeper” issue – i.e., one that is too infrequently considered for all its strategic implications.  There may be situations where foreign law is preferred for a Chinese contract, or when Chinese law is preferred for a contract to be implemented overseas, or where choice of Chinese law brings some unhappy surprises.”  Although the choice of US law was ultimately sustained by the court, this decision demonstrated that there could be “unhappy surprises” in China’s then-existing over-regulation of technology contracts, including choosing United States law as a means to avoid these controls.

Since this case, China’s antitrust regime has interjected another level of uncertainty into licensing contracts for standards setting including by substituting Chinese law for a previously agreed choice of law.  .

Here’s a link to recent testimony I gave in an official capacity on licensing challenges in China. 

As always, this blog reflects my non-official, personal views.

Jail House Inventors and Fake Jail Infringements

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Here’s another  IPR oddity: the jail house innovator.  Both China and the United States have them.

The Chinese government, like many other governments, has had policies for reducing criminal sentences for a variety of factors (age, health, behavior, restitution etc.).  Uniquely, however, it has also had an explicit policy encouraging innovation in the prisons.  The most recent version of that rule is the April 10 Rule of the Supreme People’s Court on Procedures for Review of Commutation and Parole Cases (最高人民法院关于减刑、假释案件审理程序的规定).  Article 5, states:

执行机关以罪犯有立功表现或重大立功表现为由提出减刑的,应当审查立功或重大立功表现是否属实。涉及发明创造、技术革新或者其他贡献的,应当审查该成果是否系罪犯在执行期间独立完成,并经有关主管机关确认

My translation: Agencies implementing sentences should consider the accuracy of whether the offender had rendered meritorious service or major meritorious grounds for commutation.   When such a request involves invention creations, technology innovations or other contributions, agencies shall examine whether these results were independently achieved while serving sentences, and if the relevant department has recognized that accomplishment.

This compassionate policy raises a host of interesting theoretical questions.  For example, are there  “service inventions” in the prison system of China? Will the convict keep the revenues from the invention?  Will local government provide subsidies to convicts?  Do IP agencies work with prisons in evaluating patents and innovations?  Are prisons themselves recognized as institutions promoting innovation?    If the prisoner had been convicted of an IP-related offense, such as counterfeiting a patent, is he or she really to be trusted?  Moreover, can the prisoner or his assignee bring a suit on his independent patent? 

Actually, prisons, inventors and patents have had an awkward relationship in both the United States and China.  In the United States, David Marshall “Carbine” Williams, served time for making moonshine and was held responsible for killing a federal officer.  He was helped in prison by a compassionate prison warden who enabled him to come up with some of this greatest ideas while in jail.  He later helped the US war effort after he left jail through his work on the M-1 rifle.  HIs life story was later made into a film, with Jimmy Stewart as the film’s star.  

Inventors have also served time in both our countries.  Jin Fuey Moy, the first Chinese inventor in the United States, served time a US jail, presumably while his patents were still in force.   In China, Wang Lijun, who handled public security under convicted Chongqing former government Bo Xilai,  held 150 patents.  He was sentenced to 15 years in prison in 2012 on corruption charges.    

Apart from this compassionate policy, China’s IP enforcement agencies had also, in the early stages of their development, an awkward understanding of their own responsibilities to stop IP infringement in their house.  In the past, for example, reeducation through labor camps were charged with the manufacture of counterfeit goods for export.  In those early days, China’s Supreme People’s Procuratorate had actually pirated a series of books on IP by the late scholar Zheng Chengsi,   As I have blogged about elsewhere, I believe the question is not really whether government agencies have infringed but how they prevent infringement, and how they behave after they discover the infringement (https://chinaipr.com/2013/10/14/software-piracy-by-sipo-a-tempest-in-the-tomato-garden/). 

Today, illegal counterfeiting operations may actually resemble prisons as they seek to hide their underground operations from law enforcement and engage in unsafe work practices.   How bad are the working conditions? In one particularly bizarre development, some ten years ago, a fake “prison” was in fact discovered in Sichuan that was making counterfeit cigarettes.  http://www.iol.co.za/news/world/chinese-police-snuff-out-fake-prison-1.121231.  One can only imagine what it was like to work there…