With continued tension between the US and Chinese tariff talks – with intellectual property (IP) a key point of contention - it is perhaps unsurprising that there have also been improvements in Chinese IP enforcement in the past months. Indeed, since 2017, China has moved in to the Top 20 of the World Intellectual Property Organization’s “Global Innovation Index”. Such international recognition of Chinese efforts to improve its IP reputation is not undeserved.
In July of 2019, far from content with current IP arrangements, State Council executives focused on shifting the perception of China from a “factory of the world” to a “factory of ideas and knowledge”. Such factories of ideas and knowledge require a significant, efficient IP system to work, which China is certainly developing.
In the first half of 2019 alone, China has resolved more than 6,000 infringing patent cases, as well as over 10,000 trademark violation cases. Efforts to improve protection have included attempts to deepen international cooperation on IP enforcement and increasing local law enforcement’s capacity to deal with IP issues. The improvements have not just been quantitative however, a third party, annual survey since 2012 - commissioned by the National Intellectual Property Administration – has also shown consistent improvement in public satisfaction with IP protection. However, this satisfaction has not seen China rest on its laurels. Local and regional authorities are aiming to provide greater cross-border protection for all market actors, whether these are domestic or foreign-funded parties.
End of year targets for high-value application reviews have been set at 17.5 months. Similarly, the average review period for trademark registration has been capped to five months. Furthermore, punitive damages will likely be heightened, making it more costly for offenders within IP. According to the newly revised Trademark Law, punitive damages will be assessed at five times the plaintiff’s losses, or infringing profits. With such significant risk involved with IP contravention, it is logical to assume offenders may be disincentivised from knowledgably offending again.
Naturally, the IP system in China is not perfect, and even with such measures as those mentioned above, work is still needed. However, steps are clearly being taken, with both quantitative and qualitative improvements being seen. Further improvements will only make China more attractive to all businesses, domestic and internationally, which can only be considered a good thing for all Chinese interests.