New National IP Strategic Action Plan in China

The IPKat has just learned that a new IP strategy has just been unveiled in China. Hong Kong-based Katfriend Dr Danny Friedmann [Simone IP Services and also of IP Dragon fame] explains what this is all about.

Here’s what Danny writes:

“On 13 January 2017 the State Council launched a National IP Strategic Plan to improve the protection and enforcement of IP in the coming 5 years [see here, in Chinese].

Since 2008 China has been using these 5-year plans to provide a policy framework for lawmakers, rightholders and the public alike. Within the new voluminous Plan one can identify the following trends.

The Plan starts out by celebrating China’s achievement of the first position in the world rankings of the number of of invention patents and trade mark applications. Subsequently the Plan also identifies the following main challenges: unbalanced quantity and quality of IPRs; unbalanced regional development; insufficient protection; and not sufficiently refined systems for patent, well-known trade marks and copyright law.

The targets for 2020 are laced with laudatory language (sometimes hyperbolically as if IP was the saviour that will help “achieve the 200 years goals and the great rejuvenation of the Chinese nation to provide support to the Chinese Dream”).   

Keywords in the Plan include the jaded terms ‘innovation’, ‘coordination’ (similar as in the report of the US Intellectual Property Enforcement Coordinator), ‘green development’ and ‘sharing of IP’.

Artificial Kats

Incentives for artificial growth

The Plan wants to achieve by 2020 the following goals: significant improvement in the protection of IP; increase of the IP market value and comprehensive IP capacity (improved inventions, creativity, culture and commerce). Also the commercialization of IP must have improved by then.

What is problematic is that by providing key indicators for 2020 (for example doubling the ownership of patents per 10,000 people from 6.3 in 2015, to 12 in 2020), the Plan is also providing incentives for artificial growth, which is not necessarily connected with organic and quality growth.

However, the Plan assumes that this can be overcome by also focusing on quality. Especially hopeful is the effort to strengthen a linkage between evaluation between Patent Activity and Economic Benefit.

The Plan recommends exploring the establishment of a mechanism for the assignment of IP commissioners. These specific IP commissioners could elevate the policy making, administration and regulation of IP.

Also the overall coordination should be strengthened: the State Council should plan and implement an IP strategy for the inter-ministerial joint conference. Of course, the Leading Group on Combating Infringement of IPR and the Manufacture and Sale of Counterfeit and Inferior Commodities should continue to crack down on IP infringements and the manufacture and sale of counterfeit and shoddy goods.

In line with China’s wish to develop a military-industrial complex, the Plan promotes patents for these activities. The Plan is also urging more research on business models that include Internet Plus (convergence of emerging technologies such as internet, cloud computing and Internet of Things) and e-commerce. The key technology facilitating “Made in China 2025” and Internet Plus should be protected via IPRs.

Intentional infringer

The Plan has identified which laws are in need of revision: Patent Law, Copyright Law, Anti-Unfair Competition Law, Regulations on the Protection of New Plant Varieties. Interestingly, it also mentions the need to upgrade the integrated circuit layout design protection system, a field of IP which has not been mentioned in policy documents for a long time.

The development of IPRs in intangible cultural heritage, geographical indications, access to biological genetic resources, traditional knowledge, folklore, traditional Chinese Medicine are seen as IP that can help protect Chinese culture, alleviate poverty and redistribute wealth over regional areas (such as regional IP clusters in North-East China and Beijing/Tianjin/Hebei).

The wish that banks will explore IPR securitization has been uttered many times in the past and is also mentioned in this Plan. 

In contrast, the Plan announces for the first time that the intentional infringement, including clear patent infringement, becomes part of in the social credit evaluation system (which punishes those who deviate and rewards those who act beneficially in the eyes of the government). Therefore, IP infringements can have long term negative effects on infringers. 

China still believes in the efficacy of mass action (non-structural) campaigns, such as “Red Shield Net Sword” and “Sword Network Campaign” to crack down on network infringement and counterfeiting. The Plan also wants to strengthen the so called “12330” rights holders’ assistance and complaints system and platform.  

From the Plan it is clear that China has been liberalizing “the access to IP services, expanding openness in the field of agents, and relaxing restrictions on shareholders and partners of patent agencies.” China’s promotion of the use of genuine software by government agents is stressed in the Plan. The Plan also demonstrates that China believes that ADS systems and self-regulation should be further developed, which will take relieve the administrative and judicial courts of some of the burden.

China wants to be seen as a responsible member of the international IP community that contributes actively to the formulation of international rules, wishes to accelerate the revision of the Treaty on the Protection of Broadcasts and Broadcasting Organizations, promote the implementation of the Doha Declaration on Public Health and the Beijing Treaty on Audiovisual Performances. The Plan also wants to promote the establishment of a mechanism to help protect and enforce IP rights of Chinese businesses abroad.

Oversimplifying solutions

The Plan promotes three in one enforcement (civil, criminal and administrative) of IPRs. Many protection goals are hard to achieve (or hard to measure if they are achieved): “promote simplification, decentralization, and optimization of IP review and registration process.” The Plan is sometimes oversimplifying solutions: “Mobilize the enthusiasm of all parties”.