On Economic Power: Intellectual Property in China

By Gary Cooper

China. For many in the United States, the name brings up feelings of animosity or concern, for reasons either legitimate or imaginary. Regardless of your political bent, it can hardly be disputed that China is one of the predominant economic powers in the world today, and that one of the greatest competitions for current world power takes the form of an economic struggle between China and the United States.[1] Thus, it should not come as a surprise that these two countries are also titans in the area of Intellectual Property. The United States has traditionally been the predominant powerhouse of intellectual property in the world.[2] However, the number of patents filed in the Asian market, in particular in China where the number of patent applications quadrupled between 2008 and 2018, have exploded in the past decade, and threaten the previously uncontested power of the United States Intellectual Property System.[3]

What this means is that, for any intellectual property attorney worth his or her salt, it is important to have a basic understanding of Chinese IP Law. In 1984 the Standing Committee of the Sixth National People’s Congress adopted the Patent Law of the People’s Republic of China.[4] This law was amended in 1992, 2000, and 2008.[5] As in the United States, a Patent in China grants exclusivity rights to the patentee for their creations, inventions, utility models, and designs.[6] Chinese law requires that an invention be novel, creative, have a practical use, and are distinctive.[7] As in the US, patents are granted in China on a first to file basis.[8] To file a patent in the Chinese market, one must file a patent application and relevant documents with the State Intellectual Property Office (SIPO)[9], and must pay the associated filing costs, which amount to RMB 900, or $128 US dollars.[10] The CNIPA will then conduct a preliminary examination and may grant a standard patent if all of the requirements are met.[11] For American inventors trying to get a patent in the Chinese market, or indeed for any foreign business, it is necessary to either have a regular residence or business site in China, or to appoint a patent agency, to file for a patent in China.[12] Once granted, a patent is valid for 20 years for utility patents, and 10 years for design patents.[13]

Trademarks must be broadly registered at the China Trademark Office, and must include the English name, the Chinese character name, and for core brands, the Chinese pinyin name.[14] Trademark protection is provided by the 1982 People’s Republic of China’s Trademark Law and is regulated by the Chinese Trademark Office of the National Intellectual Property Administration (CNIPA).[15] Registration gives an exclusive right to trademarks, based on a first to file system.[16] Again, foreign business must appoint a Chinese trademark agency to register their trademarks.[17]

Registration is not required for copyright, but is recommended, and can be done at the National Copyright Administration to provide a public record that becomes useful as evidence if a copyright dispute arises.[18] The Chinese Copyright Law was passed in 1990, and protection is administered by the PRC National Copyright Administration (CNAC) and the Copyright Protection Centre of China (CPCC).[19] 

Trade Secret protection is provided by the Unfair Competition Law of 1993, and is administered by the State Administration for Market Regulation (SAMR).[20] Trade Secret is defined in China as any information or business operation information that is unknown to the public, to which the owner has expended efforts to keep secret, and that has commercial value.[21] Protections can be extended to information that has “negative value,” such as information from failed research or failed businesses.[22]

China has three specialized IP courts, which were established in 2014 in Beijing, Shanghai, and Guangzhou.[23] Additionally, there are 18 specialized tribunals, and in 2018 the Standing Committee of the People’s National Congress approved the establishment of a specialized appellate tribunal to hear IP related appeals.[24] All of this has strengthened Chinese IP protections, which have traditionally been considered weak.[25] It is a commonly told myth that China’s IP regime is weaker and less business friendly than those in richer countries such as the US, but the reality is that in the past decade China has made numerous changes to their IP protection infrastructure, and that currently the Chinese regime is more optimal for IP-intensive business than many countries.[26] It is an important market, and with the growing economic power of China, one that should not be ignored when advising clients on their intellectual property rights.

[1] See Edward Wong, U.S. versus China: A New Era of Great Power Competitions, but Without Boundaries, NYT, June 26, 2019, https://www.nytimes.com/2019/06/26/world/asia/united-states-china-conflict.html.

[2] M. Szmigiera, Global Patents and Intellectual Property – Statistics & Facts, Statista, April 1, 2021, https://www.statista.com/topics/3847/global-patents-and-ip/#:~:text=The%20national%20patent%20office%20of,the%20GPIC%20Intellectual%20Property%20Index.

[3] Id.

[4] Intellectual Property Protection in China, China-un,  http://www.china-un.ch/eng/bjzl/t176937.htm (last accessed, Apr. 10, 2021).

[5] Frank Ka-Ho Wong, Intellectual Property in China: Laws and Registration Procedures, China Briefing, Nov. 14, 2019, https://www.china-briefing.com/news/intellectual-property-china-laws-registration-procedures/.

[6] Id.

[7] Id.

[8] Id.

[9] Best Practices Intellectual Property Protection in China, USCHINA, https://www.uschina.org/reports/best-practices-intellectual-property-protection-china (last accessed Apr. 10, 2021).

[10] Wong, supra note 5.

[11] Id.

[12] Id.

[13] Id.

[14] Supra note 9.

[15] Wong, supra note 5.

[16] Id.

[17] Id.

[18] Supra note 9.

[19] Wong, supra note 5.

[20] Id.

[21] Id.

[22] Id.

[23] Id.

[24] Id.

[25] See Dan Prud’homme, 3 Myths About China’s IP Regime, Harvard Business Review,  last updated Oct. 23, 2019, https://hbr.org/2019/10/3-myths-about-chinas-ip-regime.

[26] Id.