Intellectual Property Rights in China. Zhenqing Zhang
stinking ninth class” (chou lao jiu). Tens of thousands of scientists and technicians were forced into heavy physical labor. Recognition and reward of intellectual creation was regarded as completely opposed to the country’s governing ideology.
Although the Chinese patent regime during the Mao era barely played a meaningful role in promoting the country’s intellectual creation, later generations of scholars still praised them as heralding the development of the IPR regime in the reform era, which started during the late 1970s.23 At least it was established as an appropriate notion that scientific invention should be rewarded. When China started to introduce reform and the opening policy in the late 1970s, the country’s patent regime gained the opportunity to reestablish itself.
Chinese Patent Regime During the Early Reform Era, 1978–1990
This section argues that the introduction of reform and opening in the late 1970s gave rise to a set of new social and economic groups calling for patent protection. These factors constituted the key driving force for China’s reemerging patent regime in the 1980s. However, the still weak voice of the propatent group contributed to some important limitations of Chinese patent legislation in the early 1980s. Starting from the policy and ideology environment in the early 1980s, I discuss how the changing ideology in China shaped the legal arrangements of the first Chinese patent law adopted in 1984.
Policy and Ideology Environment in the Early 1980s: The Advent of “Spring of Science”
The late 1970s and early 1980s marked the beginning of China’s market reform. It is within this context that a patent law was adopted. I contend that while the major driving forces behind Chinese patent legislation came mainly from the domestic front, interaction with the outside world played an indispensable role in the adoption of the country’s first patent law. Specifically, on the domestic front, the improvement of the social status of Chinese science and technology professionals constituted the soil within which the Chinese patent regime began to reemerge. The recognition of the legitimacy of the market mechanisms further promoted the legitimacy of the desire of Chinese science and technology professionals’ claims of owning their intellectual creation. On the international front, China’s opening to the outside world not only attracted a considerable amount of foreign capital but also exposed the country to the internationally prevalent practice in patent affairs.
An important indicator of the improved social status of the Chinese science and technology professionals was Deng Xiaoping’s speech at the 1978 National Science and Technology Conference. At that conference, Deng Xiaoping denounced the once prevalent notion that Chinese scientists and technology personnel were part of the “bourgeoisie class.” Deng Xiaoping boosted the role of science and technology as the key to China’s economic modernization campaign. He further added that “[the Communist Party] should provide logistic support to the scientists and technology personnel and create necessary conditions for them.”24 Deng Xiaoping’s 1978 speech received a warm welcome from the long-suppressed Chinese scientists and technology personnel. At the same conference, Guo Moruo, then president of Chinese Academy of Science, announced that “the spring of science is coming!”25 From then on, the respect for knowledge and knowledgeable talents gradually became a prevalent norm in China.
The improvement of the social and political status of Chinese scientists and technology personnel was but the first step. In the early 1980s, China’s reform-minded leaders increasingly recognized that command planning and excessive public ownership seriously impeded China’s economic development. Under Deng Xiaoping’s reform scheme, private ownership, previously regarded as associated with capitalism and therefore incompatible with the socialist value, gained legitimacy in Chinese society and was allowed to coexist with public ownership. In a meeting with a foreign delegation in 1979, for example, Deng Xiaoping made the following statement: “[Some comrades hold that] market mechanism only exists in capitalist society. This is certainly not right. Why cannot socialist countries practice market economy as well? You cannot call that capitalism. Our country mainly relies on socialist public ownership, but we should incorporate market mechanism, too. That is called ‘socialist market economy.’”26
Although Chinese decision makers still regarded the private economy as a complement to the Chinese state-owned economy, Deng Xiaoping’s statement represented a significant departure from the dominant ideology of excessive public ownership during the prereform era.
The Chinese top leadership’s recognition of the legitimacy of private ownership was not translated into state policy until much later. However, even the rumor about that progress stirred an exciting reaction among Chinese intellectuals. According to the recollection of the aforementioned electrical engineer, “When I first heard the news [about recognizing the legitimacy of private ownership], I could not believe my ears. If an entrepreneur can own his own enterprise, can an engineer own his own invention? That sounded insane to me at first. I was really excited [to hear that], but years of past experience reminded me that I should be cautious. It was just rumor, not state policy.”27
Another important wing of China’s economic modernization campaign was the end of the autarkic economy and the opening to the outside world. In 1980, a Hong Kong company established the first China-foreign joint venture, Beijing Aviation Food, Inc., in Beijing, which marked the beginning of a huge inflow of foreign direct investment (FDI) in China.28 Throughout the 1980s, the total amount of FDI inflow in China reached $16.19 billion.29 This pushed the Chinese government to adopt a series of laws protecting and promoting foreign investment. For example, in 1986, China promulgated the Law of the People’s Republic of China Concerning Enterprises Operated Exclusively with Foreign Capital. Article 5 further provides that “except under special circumstances … the state shall not nationalize or expropriate a wholly-owned foreign enterprise. Should it prove necessary to do so in the public interest, legal procedures will be followed and reasonable compensation will be made.”30
China’s open door strategy was not limited to attracting foreign investment. Equally important was the exchange of professional patent personnel between China and foreign countries. Before Deng Xiaoping came into power in 1978, China had its first interaction with the World Intellectual Property Organization (WIPO). In 1973, China sent a small delegation as observers of WIPO’s conference in Geneva.31 After the conference, Ren Jianxin, the head of that delegation, stressed the necessity of reestablishing China’s almost nonexistent IPR system in a report submitted to then Chinese premier Zhou Enlai.32 The end of the Cultural Revolution and the start of Chinese economic reform added momentum to China’s interaction with WIPO. In 1979, the general secretary of WIPO, Arpad Bogsch, visited China for the first time. During the visit, Arpad Bogsch discussed the possibility of adopting a patent system in China with Wu Heng, then vice director of the Chinese State Science and Technology Commission. In 1980, China formally joined WIPO.33 At the same time, China also sent delegations to various foreign countries to study the operation of their patent system between 1978 and 1980. Those countries included not only developed countries, such as the United States, Japan, and West Germany, but also developing and then Communist countries, such as Brazil, Romania, and the former Yugoslavia.34 The exposure to the practice of peer countries’ patent laws helped Chinese decision makers acquire much-needed firsthand knowledge before drafting the first patent law in China.
In a nutshell, Chinese political and economic development irreversibly stepped onto the road to reform and opening, beginning in the late 1970s. The reintroduction of private property rights in the country’s economic functioning and the opening to the outside world have inevitably shaped the reemergence of China’s IPR regime in the early reform period. Unlike the prereform era, however, Chinese IPR legislation efforts sparked deep controversies among various interest groups in China during the 1980s.
The Drafting of the 1984 Patent Law
China started drafting its first patent law in 1978 and adopted that law in 1984. Mertha gave a thorough discussion of the debates and controversies in the drafting process, particularly the debates among the leaders of the relevant administrative offices at the first several high-level meetings in 1980. Thorough as Mertha’s discussion is, I would add some new findings based on more recently declassified documents,