IPR Protection Requires All Countries on Board
"China's IPR protection system was established and developed as a result of China's reform and opening-up," said Zhang Zhicheng, Director General of Protection and Coordination Department of the State Intellectual Property Office (SIPO). As of now, China has established an IPR system covering all fields conforming to international norms and rules, and acceded to the world's major international IP treaties. China has become a powerful country with regard to IP, serving as a defender, participant and builder of international IP rules.
China sees remarkable achievements in implementing the policy of stringent IPR protection
For years China has made unremitting efforts to establish a world-class business climate, serving all innovators of all countries. In particular, since the 18th National Congress of the Communist Party of China, China has attached greater importance to strengthening IP protection, making it a basic guarantee and important support for China's endeavor to implement innovation-driven strategy and build China into an innovative country. China has seen rapid progress in IPR undertaking by thoroughly implementing national IP strategy, speeding up the construction of IP powerhouse and releasing the 13th Five-Year Plan for National IP Protection and utilization.
According to Zhang, the number of invention patent filings in China reached 1.382 million in 2017, up 14.2 percent from 2016, pacing the world for seven consecutive years. China received 5.748 million trademark applications in 2017, ranking the first globally for a more impressive 16 years in a row.
China has been consistently reinforcing IP administrative enforcement. In the past five years, 192,000 cases of patent infringement and counterfeiting were investigated and punished in China, as well as 173,000 cases of trademark infringement and counterfeiting. IP Judicial protection has also been strengthened with establishment of specialized IP courts in Beijing, Shanghai and Guangzhou and IP tribunals within courts peppered around the country. Sanctions were toughened against infringers to protect the legal interests of right holders. A 2017 World Bank report revealed that China has moved up 18 places in the global ranking of ease of doing business in the past three years. It shows that China's business environment keeps improving.
According to a survey by SIPO, overall satisfaction with IP protection reached 76.69 percent points in 2017 from 63.69 percentage points in 2012. China's IPR protection is widely recognized. So far, China is working hard to improve the upper limit of legal compensation, add punitive compensation system, enhance administrative enforcement in key areas and actively conduct arbitration and mediation affairs.
Enhancing bilateral and multilateral IPR cooperation with other countries and regions
With the increasing economic globalization, world-wide innovative cooperation and problems such as IPR protection, commercialization and assignment have become more complicated. All countries face the common problems including IPR rights confirmation, technology diffusion, benefits and interests sharing, infringement and piracy.
"In order to address and improve these problems, we cannot rely on trade protectionism and deviate from the ultimate purpose of IPR system and even use IPR as a tool to contain the development of other countries," Zhang noted that efforts should be made to reinforce IPR protection, maintain a healthy and well-organized market order and promote fair competition through closer international cooperation. It is the common responsibility of all members of international community in particular major countries such as China and the United States to build IPR system into a bridge for innovation and cooperation among all countries and establish dynamic coordinative and cooperative system on the basis of common interests.
For years, Chinese IPR protection practice has always been in line with international norms and rules, strengthening bilateral and multilateral cooperation with other countries and regions, coordinating cross-border joint law enforcement operations to crack down on IPR infractions. In 2017, China and the U.S. successfully solved the June 7 cross-border IPR infringement case. Customs from China and U.S. worked together to target selected goods on multiple occasions. Customs from China and Russia also launched joint operations on goods circulation through mail and courier services.
China and the U.S. are important IPR partners. Both countries are now technology manufactures for the world. In 2017, the U.S. interests acquired 24,000 Chinese patents, ranking the second among all foreign countries while the U.S.-based Qualcomm was the most prolific foreign user. Across the Pacific, China obtained 11,000 patents in the U.S., qualifying for top 5 foreign countries. In the meantime, China filed the second most number of 51,500 patent applications via the Patent Cooperation Treaty (PCT), tracing only the U.S.
China opposes running trade protection in the disguise of IPR protection
According to Zhang, IPR disputes between Chinese and U.S. companies is not a bit more unusual than those between the U.S. and companies of other origins. This is just another day of operation for IPR system, which shall be treated reasonably, evaluated properly, improved and solved through cooperation. As a matter of fact, China has open and effective lanes for resolving IPR disputes, whether through administrative or judicial avenues. Unsubstantiated accusation of pilfering IPRs is irresponsible and will serve no good course. China treats all companies, foreign and domestic on equal footing and renders the same protection to safeguard the lawful rights of all holders.
For instance, in the Qualcomm case, the concerning Chinese court rejected all pleas from Shanghai Genitop (Note: Company's Chinese name literally the same with Qualcomm) and secured Qualcomm's legitimate rights in China. In another case earlier this year, Shanghai Customs discovered that 34 million yuan worth of the U.S.-based VEECO products imported through Shanghai Pudong International Airport was suspected of infringing a patent of Advanced Micro-Fabrication Equipment Inc. (Shanghai). After being sanctioned by the customs, VECCO approached the Chinese patentee for negotiation and eventually reached a settlement deal blanketing the global market.
Statistics do not lie. Effective IPR protection in China translates into tons of interests for foreign right holders every year. In 2001, China paid US$1.9 billion in royalties for using IPRs to foreign interests. That number skyrocketed to US$28.6 billion in 2017 and the relevant China-foreign deficit dwelled over US$20 billion with China eating the red. A relevant survey echoes the above view by revealing that foreign corporate right holders are more satisfied with IPR protection in China than an average corporate right holder in the past three consecutive years.
Enhancing IPR protection requires both China and the U.S. on board. "China is strongly opposed to abuse of IPR rules, unilateralism and protectionism. We are even more opposed to running a clandestine operation of trade protection in the disguise of IPR protection and could not stand stressing rights only while evading obligations, or cocooning oneself in a world of 'I, me, myself' and turning a blind eye to established international rules," said Zhang, "China is willing to work with the international community to secure the multilateral trade mechanism and keen to build an open, inclusive, balanced and effective international IPR system."