Last year was key for IP practitioners across the world, with a series of important law changes such as the America Invents Act, protests against controversial treaties such as ACTA and attempts by various jurisdictions to deal with online piracy. These events are influenced by a series of key players, including judges, politicians and office heads, who set the boundaries for intellectual property and its practitioners. In-house counsel and industry associations influence their decisions while academics, artists and inventors can all play key roles.
This year's version of the annual Top 50 aimed to celebrate the full range of people and industries involved in IP by splitting into 10 categories: five judges, five bloggers, five artists and so on.
China managed to get individuals in a wide range of categories. It almost goes without saying that Tian Lipu, commissioner of SIPO, made it into the office heads section. Tian spoke at our China-International Forum in Beijing last year (this year's event is due to take place on June 20 and 21 in Beijing) and had some interesting comments to make to our reporters. Jack Chang made it into the list again for his tireless work for the Quality Brands Protection Committee, which is helping to build a platform between government and industry.
But there are also some new faces in the list. Wang Haibo, the IP director for ZTE is in the list for the high-profile litigation his company became involved in. We also commented last August on ZTE's stunning rise up WIPO's PCT filing rankings. This month the latest WIPO global patent report has confirmed that the telecommunications company topped the charts in 2011 with 2,826 applications. As it builds up its patent war chest, other companies will soon think twice before taking ZTE to court. We also profile a judge, an academic and a premier of the People's Republic of China in a list that shows the diversity of the people shaping the future of IP In this key market.
Readers might think of other worthy people from China who have been left out (please write and let us know who they are) and some might object to those who have been included. But, as in previous years, our aim has been to inform and, occasionally, provoke: no one has paid to be included and there has been no formal voting process. Lawyers in private practice are not considered. The full list of 50 people is decided by Managing IP's journalists in London, Hong Kong and New York based on recommendations and research.
Chief of the IP Tribunal at the Supreme People's Court of China
Earlier this year the USTR released an out-of-cycle review of notorious markets that, in addition to naming most of Asia's infamous fakes hotspots, singled out online commerce sites Taobao and search engine Baidu. While both are trying to reduce IP infringement on their sites, the nominations showed that online enforcement of IP in China, which has strict rules for notarising and legalising evidence, can be almost impossible. Kong Xiangjun is one of the men tasked with trying to change that. Later this year, the Supreme People's Court is due to produce a Judicial Interpretation that will look at online copyright infringement. IP practitioners are waiting to hear how strict China plans to be. In addition to dealing with this issue, Kong has to cope with the increase in IP litigation in China's courts – a 36.3% rise between 2009 and 2010 – and is overseeing an experiment at the lower level where administrative, civil and criminal IP cases are held together to improve efficiency.
He is also unafraid to speak in public and impressed practitioners when talking about China's IP system at a conference coorganised by Microsoft and the McCarthy Institute at the University of San Francisco this year.
Premier of the People's Republic of China
Since Wu Yi left her post as vice-premier in 2008, IP owners in China have expressed frustration that they do not have someone in government making the case for stronger enforcement. In October last year, Wen Jiabao stepped into the breach by persuading the State Council to approve a six-month campaign to crack down on fake and shoddy goods and personally endorsing the initiative. The campaign was extended to nine months and finished at the end of June.
Statistics in China are always impressive in size, and in a few months high numbers of seizures, convictions and new prison sentences are likely to be announced. More important, however, will be whether this campaign becomes part of a longer-term drive to improve enforcement. The influence of Wen, dubbed the People's Premier by domestic and foreign media, will be crucial in making sure that happens.
You make billions from us
It is not often that heads of foreign IP offices write opinion pieces for the Wall Street Journal. That Tian Lipu did so late last year underlines both the importance of China's record on protecting IP rights in US-Sino relations and the SIPO chief's determination to challenge received wisdom about it. In a self-assured article, Tian reminded readers that Western companies earn hundreds of billions of dollars from China in the form of royalties and warned that when it comes to creating a sound international environment for IP protection, "a climate of complaints and denunciations doesn't help".
But the public defence of China's achievements in the area of IP enforcement is just one part of Tian's international strategy. As the head of an office whose examiners are seeing a phenomenal rise in the number of patent applications coming across their desks, Tian has a real interest in securing greater cooperation between offices when it comes to handling requests for IP rights. To that end, the head of SIPO is playing an increasingly influential role in bilateral and multilateral collaborative efforts: he agreed to launch a pre-pilot patent prosecution highway with Japan earlier this year and is due to start others with the US and Korea. In the IP5, made up of the IP offices in Europe, the US, Korea, Japan and China, Tian is something of an old hand: since 2007 the heads of each of the other offices has been replaced.
Of course longevity alone does not guarantee influence. But the astonishing rate at which demand for patent rights is growing in China ensures that SIPO is taken seriously. Last year, for example, Tian's office received more than 390,000 applications for invention patents. A high figure already by the standard of any international IP office, SIPO estimates that applications will double by 2015, in part the result of meeting commitments the government made in its latest Five Year Plan. In it, politicians for the first time set goals for the number of patents Chinese inventors apply for, as part of a strategy to shift economic growth away from low-end manufacturing and towards high-end innovation. The Plan says there should be 3.3 invention patents for every 10,000 people in China by 2015, almost doubling the ratio in 2010.
Tian told Managing IP in June that meeting this aim would probably require SIPO to double its number of examiners: from the 5,000 it has now to 10,000. Unsurprisingly, he described this as a great responsibility and pressure on the Office. If Tian can manage the unprecedented expansion of both applications and the team of examiners without jeopardising patent quality in China, his reputation and influence abroad will only strengthen.
Let the litigation commence
IP director, ZTE
As China's technology companies seek new markets overseas, they will inevitably get involved in IP litigation. How they cope with that will be a key sign of whether they have what it takes to move beyond their huge domestic market and become global brands. Telecoms equipment maker ZTE already bears the scars of some bruising international patent battles, but will face even sterner tests over the next few years.
In April Swedish rival Ericsson sued ZTE in the UK, Italy and Germany, after negotiations of more than three years failed. Kasim Alfalahi, the chief IP officer at Ericsson, claimed ZTE infringed some of its patents for second and third generation wireless technologies. ZTE retaliated by suing Ericsson in China.
Later in the same month, domestic rival Huawei (both companies are based in the technology boomtown of Shenzhen) sued ZTE in Germany, France and Hungary, accusing it of infringing patents that cover long term evolution (LTE), a next-generation mobile technology, and data card technology. Huawei also accused ZTE of using one of its trade marks on some of its data card products without permission.
The man who has to deal with both attacks is Wang Haibo, ZTE's IP director. "We are facing a lot of IP problems in foreign countries. For example, our products have been seized by Customs because of alleged trade mark infringement and I have to deal with it. This is now part of the regular work," he says, claiming that the lawsuits were "not entirely unexpected".
The legal attack is, at least in part, a sign of success. Created in 1985 by a group of state-owned enterprises connected with China's Ministry of Aerospace, ZTE listed on the Shenzhen stock exchange in 1997 and in Hong Kong in 2004. It has since tried hard to expand abroad, winning a lot of orders for Code division multiple access (CDMA) networks. That money has been ploughed back into 15 global R&D centres. The company aims to invest 10% of its budget in R&D.
This has led to a stunning increase in PCT applications. From 188 applications in 2008, ZTE rose to 22nd in WIPO's table of biggest PCT applicants with 517 applications in 2009. Provisional figures for 2010 show ZTE jumping to second place in the table (behind Panasonic, but ahead of Huawei) with 1,863 applications. And in a press release in May, ZTE claims to have taken top spot in the first quarter of 2011, with 974 applications, far more than second placed Panasonic, which managed only 559.
Filing lots of patents does not necessarily mean that a company is innovative. But these patents will soon be tested either in the courts or in settlement negotiations.
Wang admits that IP litigation overseas initially "felt quite scary" but is now able to boast of the company's success in fighting off patent trolls that are still preying on other companies. The team is actively recruiting legal counsel to join it in Europe and North America.
He also seems relaxed about taking on Huawei – China's biggest telecommunications company. "From a marketing point of view, I agree with its policy of suing, because it is necessary to compete. But from a technical point of view, we don't fear it." In fact, his lawyers seem to be looking forward to the challenge: "Frankly, with a case against Huawei, our IP team gets quite excited."
President of Zhongnan University of Economics and Law, China
When Wu Handong talks about IP, China's policy makers listen. He has been president of Zhongnan University of Economics and Law for 15 years, serves as director of its centre for the study of IP rights and is chairman of the Intellectual Property Rights Law Association of the China Law Society. That research will also be crucial in forming the proposals for the amendments to China's Copyright Act. In an article for the inaugural edition of The WIPO's journal, Wu split China's IP history into four phases: passive acceptance (of an IP regime imposed from outside), selective arrangement (the first laws made in the 1980s and early 1990s), modulated application (meeting TRIPs requirements) and active decision making (the National IP Strategy and developing domestic innovation).
Despite widespread predictions that China is becoming a technology powerhouse, Wu explains in the paper that computer makers, after paying licence charges to Intel and Microsoft, only earn "the price of 10 apples" for each computer they make. Wu, like many in China, views this as unsustainable and, as debate over China's indigenous innovation policies heats up, foreign IP owners should bear in mind that it is anecdotes such as this that are driving academics like Wu to help develop policies to encourage domestic innovation.
Come to me
QBPC and GE
In all his years promoting IP, Jack Chang has come to realise that working with the Chinese government is not necessarily a difficult task. It merely requires understanding and trust – a relationship that takes time to build. A relationship that the Quality Brands Protection Committee, which he is chairman of, has worked hard to develop.
Chang foresaw that China would transform from being a "made in China" to "created in China" economy. He set up a patent committee within QBPC in 2005, which has often been enlisted for input regarding new legislation. The group's advice was adopted in implementing regulations for the Patent Law amendments.
When China announced its six-month anti-counterfeiting campaign last October, Chang and his team at the QBPC were called on to provide advice to senior law enforcement. QBPC members shared their experiences to help come up with a master plan. More than 3,000 people were arrested and nearly 300 websites were shut down as a result of the nationwide enforcement operation.
More recently, Chang was invited to a meeting by the Ministry of Commerce (Mofcom). Representatives from nine ministries and eight Chinese trade associations gathered together to discuss the fight against counterfeiting exports to Africa. Effective criminal investigations have led to the arrests of operators servicing more than 50 suppliers. Police from respective provinces have started investigating those suppliers, but Chang stresses more needs to be done. "We're still on the learning curve, but the good thing is the Chinese government ranks this issue as high priority."
In the last year, Jack and his team at QBPC have also provided constructive feedback on China's controversial indigenous innovation policies, which seek to promote Chinese home-grown technology by making it more difficult for companies with IP outside China to secure government contracts. A US International Trade Commission Report that attacked China's indigenous innovation policies was criticised by IP practitioners in the country. The near 200-page document revealed that foreign companies felt the laws were "potentially reducing business opportunities in China's fast-growing economy". As of July 1, however, the government has discarded these rules, and QBPC is helping the government work out the next step.
For Chang, his role is to help build an effective communication platform between the Chinese government and industry. He encourages local companies to go to the QBPC instead of relying too much on the government for help supporting innovation.