China is willing to enhance intellectual property rights (“IPR”) cooperation with other countries, a senior official said on Tuesday on the heels of ongoing national IPR reform (including changes to the existing trademark system). According to Gan Shaoning, deputy director of the State Intellectual Property Office (“SIPO”), the national IPR system – a “complete and internationally-recognized legal system for IPR protection” – incorporates both administrative and judicial protection, and is representative of a system that has taken other countries “hundreds of years to achieve.”
While Shaoning acknowledged that there have been "some problems in IPR protection in China," he noted that until relatively recently, China was a developing country with a short history of IPR. "Exercising strict IPR protection is not only a demand for the country to attract foreign investment, open up to the outside world, and pursue innovation-driven development, but also an essential requirement for upgrading economic and social development," he told reporters.
"We are willing to enhance IPR cooperation and share our experiences of development with our counterparts across the world," Shaoning said. "At the same time, we oppose unfounded accusations and abuse of IPR to exercise trade protectionism." He further noted that the Chinese government has allocated a fund of 1.4 billion yuan ($202.8 million) “to local sites of patent operation and had helped the establishment of more than 1,700 IPR enterprises.”
And the results are actually quite extraordinary in some ways. As of November 2016, for instance, China was driving Asian-led growth in innovation worldwide, becoming the first country to file 1 million patent applications in a single year, the World Intellectual Property Organization. Chinese innovators filed most of their 2015 applications in electrical engineering, which includes telecoms, followed by computer technology and semiconductors, and measurement instruments, including medical technology.
As for cybersquatting (the intentional filing a trademark application for another party's registered trademark in a country where the second party does not currently hold a trademark registration) and bad faith filings, an area of particular interest for non-native entities, Shaoning said, "China will increase compensation for cases of malicious infringement and crack down on infringement on IPR through revised and improved laws and regulations.”
In regards to trademarks, somewhat significant revisions to China’s trademark law, such as increased fines for infringement, were implemented in 2014. The major changes include: an increase in the level of damages the court may provide for trademark holders whose marks have been infringed (the limit is now $480,000 per infringement, six times more than the current maximum), procedures to reduce bad faith filings, a quicker turnaround time for trademark applications (the China Trademark Office will complete its examination of an application within nine months), and stricter standards against the unauthorized use of "well known" marks.
Moreover, such revisions to the national trademark system give brands increased access to the Chinese Trademark Review and Adjudication Board, which has the power to invalidate registered trademarks, which has proven useful for non-native brands that have fallen victim to the trademark squatting practices for which China is known. Hence, the rise in intellectual property-related actions filed by non-native entities, such as Apple, Goldman Sachs, Christian Dior, Hermès, Costume National, Iceberg, Michael Bastian, Moncler, and Ermenegildo Zegna, among others.