The country is making the transition from net importer of ideas to net innovator, and as it does, it is finding that good patent laws matter. Whilst addressing the recent Global Trade in Services Summit, President Xi Jinping stated ‘China will work with all countries in enhancing the protection of intellectual property rights (IPR) and actively promote the development of the digital economy and sharing economy’. At the end of 2019 the general offices of the Communist Party of China (CPC) Central Committee and the State Council have jointly issued a directive calling for intensified protection of IPR: ‘Strengthening IPR protection is the most important content of improving the IPR protection system and also the biggest incentive to boost China's economic competitiveness. By 2022, China will strive to effectively curb IPR infringement, and largely overcome challenges including high costs, low compensation and difficulties in providing evidence for safeguarding intellectual property rights’.
A case of this policy in action was demonstrated in September this year when nine people in Shanghai were sentenced up to six years in prison on for infringing on the copyright of Danish toymaker LEGO. The toys the group designed, produced and sold were under the brand name LEPIN, similar to LEGO. LEPIN's packaging, design and colour were all similar to that used by LEGO. The gang produced and sold nearly 4.25 million boxes of their copycat products worth over 300 million yuan, including 634 different models, from September 11, 2017 to April 23, 2019.
IPR infringement is a particularly worrying issue for new foreign business, and the policy document calls for China to make greater efforts to stepping up international cooperation in IPR protection, facilitating communication between domestic and foreign rights holders, and providing support in overseas IPR disputes.
Overall, China’s IP regime has made significant strides in the past few decades. For instance, China’s world leadership in patent quantity—though not in quality—signals its commitment to develop a robust innovation ecosystem at home. Minimum damage payouts for violations have continually increased, as have durations of patent protection. China even became the most litigious country in terms of the number of IP-related cases as early as 2005, and the number of cases has increased at a rate of over 40 percent per year for the past two years. In 2014, China debuted three specialized IP courts, and there are as many as 19 more in the pipeline. And contrary to popular expectations, foreign plaintiffs have actually fared better in patent litigation in these courts than their Chinese counterparts.
China now ranks second globally (excluding tax haven countries) in annual spending on acquisition of foreign IP as well as in gross research and development expenditure. In short, IP infringement remains a significant problem in China and the country’s IP protection regime still has shortcomings but robust change is occurring at China’s own initiative.
China IPR Procedures.
Patent registration procedure for inventions
- File the patent application, submit relevant documents, and pay the filing costs (RMB 900 or US$128);
- CNIPA accepts the application and conducts a preliminary examination (within 18 months from the filing date);
- CNIPA conducts substantive examination (on the applicant’s request); and
- CNIPA registers the designated patent and grants a standard patent for the invention.
Patent registration procedure for utility models or designs
- File the patent application, submit relevant documents, and pay the filing costs (RMB 500 or US$71);
- CNIPA accepts the application and conducts a preliminary examination; and
- CNIPA register the designated patent and grant a standard patent for the utility models or designs.
Trademark registration procedure
- Check whether the trademark is already registered and the category of the trademark;
- Submit an application form and other relevant documents to the TMO;
- TMO accepts the application;
- TMO conducts preliminary and substantive examination (within nine to twelve months of the filing date);
- TMO publishes a notification (followed by a three-month period to consider any objections); and
- TMO issues a trademark registration certificate.
The procedure generally takes about 14 to 18 months. Within three months from the date of publication, any person can file an opposition against the trademark. A trademark in China is valid for 10 years and renewal of registration must be filed within 12 months before the date of expiration.
Copyright registration procedure
- Apply with a sample of the work;
- CNAC/CPCC accepts the application and conducts an examination; and
- CNAC/CPCC issues the certificate.
For further information on China IPR issues, we suggest you visit the EU IPR SME Helpdesk: https://www.china-iprhelpdesk.eu which has the most up to date information on all IPR issues and gives free guidance on procedures and best practices.