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Intellectual property with Chinese characteristics



Peter Leung


Advanced economies raising alarms over the state of IP protection in growing markets are nothing new, but what happens when the object of criticism is poised to become the world’s largest economy?

It’s a familiar process; each year the US Trade Representative releases its Section 301 report identifying problematic IP jurisdictions around the world. The named countries, often growing economies, object to their placement on this list, citing progress made and willingness to continue improvement.

Last year for example, Ricardo Blancaflor, the director general of the Philippines IP Office, issued a written response to his country’s placement on the Section 301 Watch List, saying that he was "saddened" by the inclusion, that the country had made enormous progress and it had "religiously implemented" its IPR Action Plan. Ahead of this year’s 301 report, the office released a 50-page comment highlighting the Philippines’ IP credentials.

Many countries respond similarly; Thailand’s IP office website has an entire section about the 301 report; while Malaysia was removed from the 2012 report in part due to its adopting of US-style DMCA safe harbour provisions.

These responses are of course not surprising; the importance of intellectual property to economic growth is well accepted, as is the need to harmonise with international standards, which are of course heavily influenced by countries such as the US and the UK.

Liu ChuntianThe response out of China, however, has been a bit different. Though China openly touts its ambitions to move from a manufacturing-based economy to one focused on intellectual property and emphasises the need to improve IP protection, influential Chinese figures are also telling critics that they need to meet China halfway.

At Managing IP’s China International IP Forum last week, Liu Chuntian (right0, often credited as the country’s first IP law professor, told the audience: "When comparing the UK, US, and Chinese IP systems, we have to be clear minded; China started from scratch about 30 years ago, and therefore it has a different foundation from those systems. They have a mature market, a privatised economy, and their IPR system is in line with their economy. We had three decades of planned economy and we’re trying to move away from that. We need more time to build our system."

Political commissioner Gao Feng of China’s economic crimes unit in the Ministry of Public Security expressed similar sentiments. At a speech before the Quality Brands Protection Committee last week, while highlighting the progress China has made, he stressed the need for international cooperation in fighting fake goods, and noted that law enforcement agencies from other some countries have not been as willing to work together. Perhaps in response to the continual criticism of Chinese IP protection, he also argued that counterfeiting is not a Chinese phenomenon, but that it is part of an international flow of goods and a common feature in the economic development of many countries.

Neither Liu nor Gao are anti-harmonisation; Liu frequently engages with judges and scholars to study their countries’ IP systems to draw on their best practices, while Gao regularly works with international rights holders and organisations such as the QBPC. Both expressed belief in the need for improvements to the Chinese IP system. But their comments are illustrative and perhaps reflect a new and uniquely Chinese reality; while smaller countries work to comply with international standards, China, while doing that, also has the clout to change the standards themselves.

Speaking to Managing IP later on, Liu summed up this point succinctly: "Other countries may have to accept that China is getting bigger and have to adjust their own ideas, instead of always expecting China to change."

Comments






Article Comments

There is truth in Professor Liu's comments regarding the time to develop a robust IP protection system but these must be balanced with the reality that every delay in implementation, no matter where infringing activities occur, have a direct benefit for the infringers as they grow production, design or management capability and know how. Delay of implementation should not be so long that infringers technological capabilities equal, or even surpass, the capabilities of those whose work is currently being used as source material.

Bob Vangenne May 31, 2013

While I personally greatly respect the tremendous work of Prof. Liu and DG Gao, I think this article over simplifies the complex issues of harmonization, integration into the global IP system, and legal reform. China is approaching IP with fundamental challeneges due to its continuing heavy hand of state planning and quantitative goals. It is also challenged by a historically weak judiciary. China's problems in my view are no longer principally based on a lack of understanding of IP, but rather whether China's leadership has the confidence to permit more robust market and legal reform initiatives into place in IP. The reality is that in many respects, IP has been an important pioneer in China for many reforms - is the State willing now to create a truly market-oriented, private-property oriented system?

Mark Cohen May 31, 2013

That's a very good point. China's approach seems to have an element of what you've described - acknowledging a need for improvement, but also frustration that other countries aren't more understanding of its unique circumstances. Have any countries in Southeast Asia taken a similar tone?

Peter Leung May 30, 2013

Objections to the USTR reports from nations in SE Asia display a fundamental lack of understanding of IPRs. The development of an IPR system is not a static exercise, 'we implemented the action plan, so we are done here'! It is a process, constantly changing and evolving as IP protection tracks business requirements. Reducing counterfeits may be one success, but the next phase of higher level IP protections then emerge, such as protecting trade secrets. If a country wants to move up the commercial value chain, then the targets for IPR protection will move too!

IP Komodo May 30, 2013

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