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Friday, May 16, 2014

The rise of IP in China

By Tracy Lu, Lawyer

Every year, China celebrates 'China Intellectual Property Rights Publicity Week' across the country. It's popular – 24 government departments, including the State Intellectual Property Office (SIPO), get involved and this time over 50 events were held. You missed the 2014 instalment – it is timed to coincide with World IP Day on 26 April – so if you're going to China this year, make it for the serenely beautiful karst mountains standing over the milky-jade Li River in Yangshuo instead. But read our summary of the highlights of China's IP Week below.

How many suits?
During the 2014 IP Week, the Supreme People's Court released a White Paper on Intellectual Property Rights Protection. The White Paper explores the current status of IP rights protection in China and looks at developments over the course of 2013, providing some key statistics and case studies. In the past year, there were 88,583 new IP proceedings commenced in local courts around the country and 88,286 cases were determined. The subject matter of the new proceedings includes:
  • 9,195 cases – patents
  • 23,272 cases – trade marks
  • 51,351 cases – copyright
  • 949 cases – technical contracts
  • 1,302 cases – unfair competition
  • 2,514 cases – other

Infringement sentences
The National Copyright Administration also released a White Paper on the Top 10 Anti-Infringement and Anti-Piracy Cases for 2013 and a report on the progress of the eradication of pirated software. The top 10 cases include:
  • Copyright infringement actions in respect of audiovisual works brought by various Chinese internet and media service companies including behemoths Youku, Tencent and Sohu against online streaming service provider Kuaibo and internet service provider Baidu. Fines of RMB 250,000 were issued to each of the infringers.
  • Copyright infringement actions in respect of the video game "The Legend of Mir" brought by Nasdaq-listed online games and book publisher Shanda against seven individuals. Fines varying from RMB 40,000 to 1.5 million were issued to the infringers, who were also sentenced to periods of imprisonment.

Gold and Bronze for China
In the opening conference for the 2014 China IP Week, the head of SIPO, Mr Shen Changyu, emphasised the rapid growth of IP in China, with annual Chinese-originating PCT applications now sitting at 3rd place in the world (at 20,000 – pushing Germany into fourth place) and the number of trade mark applications sitting at first place in the world for the 12th year in a row (at a staggering 1.8 million applications). An address was also given by Francis Gurry, the recently re-appointed Director General of WIPO (amongst his many other achievements he is also an Australian and an Allens alumnus).

Future Directions
SIPO says it wants to encourage and lead Chinese businesses to seek IP protection actively abroad, so as to complement efforts in carrying out the central government's overseas business expansion strategy (ie its "Going Out" policy). This focus is also partly informed by the spate of recent section 337 investigations (which most often involve claims regarding allegations of IP infringement by imported goods) conducted by the US International Trade Commission into Chinese telecommunications companies ZTE and Huawei.
The scale of this year's events seems to reflect a shift in attitude, from the top level down, in respect of the importance of IP protection. It may show recognition on the part of the Chinese government that in order for Chinese businesses to be competitive internationally, they must become better versed in overseas rules and regulations, including in the IP space.

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