Intellectual Property Rights in China. Zhenqing Zhang
protection, and augmenting the protection of imported patent products. In December 1992, China promulgated the Regulations on Administrative Protection of Pharmaceutical Products and the Regulations on Administrative Protection of Agricultural and Chemical Products.60 Those two regulations improved on the 1984 patent law and extended patent protection to pharmaceutical, agricultural, and chemical products.
The 1992 MOU only briefly covered IPR enforcement and the implementation of IPR laws. This issue turned out to be the core controversy between China and the United States during the two following rounds of IPR negotiations for the rest of the 1990s. In fact, the China-U.S. bilateral negotiations did not solve these issues completely. The issues of enforcement and implementation lasted well into the twenty-first century. I discuss these issues in Chapters 4, 5, and 6.
Revision of Chinese Patent Laws During the Country’s Bid for WTO Entry
While bilateral pressure from the United States propelled China to improve its IPR protection levels more quickly, external pressure also came from multilateral sources during the 1990s. The most important of these multilateral sources was the TRIPS Agreement. In 1995, the end of the Uruguay Round negotiation resulted in the establishment of the WTO. An important component of the new international trade arrangements was the establishment of a global regime for IPR governance: the TRIPS Agreement.61 Unlike the preceding conventions, the basic function of the TRIPS Agreement was to establish and enforce minimum international standards for IPR protection. There were some other significant changes to a number of aspects of the previous international IPR agreements. Specifically, TRIPS gives the governance regime teeth by applying the WTO’s dispute settlement mechanism to any international dispute regarding the undertakings within TRIPS. As part of the multilateral agreements that led to the establishment of the WTO, TRIPS also links IPR to the wider issues of international trade at the WTO. Moreover, TRIPS ushered in a global IPR regime that reached deep into the domestic regulatory environment of states.62
China started its bid for General Agreement on Tariffs and Trade (GATT) membership in the mid-1980s. During this process, the Uruguay Round of multilateral trade negotiations incorporated the issue of intellectual property rights at the request of developed countries. In 1993, the TRIPS Agreement was reached and came into effect on January 1, 1995. On the same day, GATT was transformed into a more powerful multilateral trade organ, the WTO. As discussed earlier, the TRIPS Agreement possesses more enforcement power than the previous multilateral IPR treaties. During its bid for WTO entry, China was obliged to meet the minimum standards outlined by the TRIPS Agreement.
Before China acceded to the WTO in 2001, the Chinese National People’s Congress made important revisions to the Chinese patent, trademark, and copyright law, adjusting the level of IPR protection to the standard set by TRIPS.63 Specifically, the Chinese National People’s Congress introduced thirty-five revisions to the sixty-nine articles of the Chinese patent law in 2000. The major revisions are as follows: first, the revised version of Article 14 provided that state-owned enterprises, as market entities, should be treated equally as non-state-owned enterprises in terms of their obligations and rights to patent applications. Second, Articles 41 and 46 provided that the authority to grant and invalidate the patent right was shifted from the patent bureau to the Chinese People’s Court.64
Chinese Patent Regime During the Post-WTO Era, 2001–Present
Policy and Ideological Environment During the Early Twenty-First Century
China’s WTO entry did not end the evolution of the country’s patent regime. During the early twenty-first century, important changes happened on both international and domestic fronts, which were bound to impact China’s evolving patent regime. Internationally, the fourth ministerial-level conference of WTO members was held in Doha, Qatar, in November 2001. Before and during the conference, the developing countries and other nongovernmental organizations (NGOs) collaborated to voice concern over some arrangements in the TRIPS Agreement. Of particular concern for the developing countries was balancing the relationship between TRIPS and public health. For them, the related regulations in the TRIPS Agreement had too much emphasis on the interests of private owners, particularly the Western multinational corporations, and emphasized less the public and social benefits. The Doha Declaration, adopted after the ministerial-level conference, addressed those concerns. The Doha Declaration also incorporated articles concerning the protection of geographical indications, biodiversity, and traditional knowledge.65 Those new developments reflected the developing countries’ efforts toward an IPR doctrine with further consideration of their interests. They also inevitably impacted China’s attitude toward the IPR norms during the new century.
Even before China’s entry into the WTO, domestic critics in China had complained that too many concessions had been made and that China moved too fast to merge into the international track of IPR protection.66 The statement by an official that I interviewed expressed sentiments popular among the Chinese social public: “The Americans copied European countries for more than one century; why can’t we copy the Americans for twenty years? They just want to impose their standard upon us. But did they follow these standards when they were at our stage of economic development? The U.S. practices double standard on the issue of human rights. They did the same thing on the issue of intellectual property rights!”67
The incorporation of related norms embodied in the TRIPS Agreement was not the final settlement for the disputes. According to an official at the Chinese Ministry of Commerce, with China’s bid for WTO membership completed, the issue of intellectual property rights in China has passed through the initial stage of adoption and entered into a new stage of “interest games in depth.” In his words, “Unlike the 1980s, an IPR regime has already been in place in China for almost twenty years. Even the weaker players in the IPR games would not dismiss IPR laws as unnecessary and unhelpful. However, they want to impact China’s IPR legislation in such a way that the legal arrangements can tilt less to the foreign IPR holders.”68 Under such an international and domestic context, foreign IPR holders, who have been stronger players on the IPR field in China, became the targets of the criticism. A new round of interest games began.
Chinese Domestic Business Community and the Revision of the Chinese Patent Law During the Post-WTO Era
After China entered the WTO, foreign influence reached deeper into the Chinese political economy. Chinese domestic companies were put to a more stringent test on IPR issues by their international counterparts. The battles took place on both the international arena and the domestic arena. In 2002, China’s leading producer of communication equipment, Huawei, was brought to a patent lawsuit in Texas by Cisco, accusing the former’s American branch, Huawei America, of infringing upon the latter’s patent.69 In 2003, General Motors (GM) filed a patent lawsuit in Beijing against Chery, a private auto company based in Anhui, accusing that a type of Chery’s auto products, QQ, had copied the industrial design of the auto body of Spark, a type of mini-car developed by GM.70 These two leading IPR cases indicated that, after China’s WTO entry in 2001, the main fighters on the IPR battlefield shifted from states to companies. More important, as leading Chinese domestic companies, both Huawei and Chery are considered strong competitors for multinational corporations such as Cisco and GM. Not surprisingly, the two cases were interpreted by both the Chinese academia and the public as the abuse of intellectual property rights by foreign companies investing in China.71
Eventually, both cases ended up in outside court reconciliation,72 but critics of companies from the developed world have launched accusations of their abuse of intellectual property rights. At the same time, Chinese scholars and policy researchers have published reports on internally circulated materials, warning against the danger of foreign companies’ dominance in the Chinese market.73 These appeals reached the decision makers of the SIPO. In 2004, the Chinese SIPO sent a working group to investigate the patent dispute between GM and Chery. The working group concluded that the real purpose of GM’s launching the patent suit against Chery was not to protect its IPR. Instead, GM’s real aim was to strangulate its competitor before it grew strong enough.74
The working group’s report