Intellectual Property Rights in China. Zhenqing Zhang
by Western companies to maximize their business interests rather than promote China’s own innovation ability. According to a document drafted by the Policy Research Office of the State Intellectual Property Office in March 2005,
Various signs indicate clearly that developed countries intend to control the practice of international patent affairs…. In order for our country to avoid being marginalized on the issue of patent affairs, … [we have to] summarize the experience of the practice of patent system during the past two decades so that it can better accommodate our country’s concrete condition. We should further kindle the passion of innovation by our country’s enterprises and individuals and better balance the interests of patent holder and social public.75
Under these guidelines, the Chinese SIPO launched the process for the third revision of Chinese patent law in 2005. This process was completed on December 27, 2008, when the Standing Committee of the National People’s Congress passed the revised draft of Chinese patent law.76 According to a Beijing-based IPR judge, the third revision of Chinese patent law was not driven by foreign pressure as much as the previous revisions; instead, the primary driving force was the need for China’s own economic development.77
On December 27, 2008, the Sixth Session of the Standing Committee of the Eleventh Chinese National People’s Congress passed the revised draft of Chinese patent law.78 Compared with the previous draft, the current draft further increases the financial punishment for patent infringement (Article 63). The current draft also adds provisions that outline the protection of traditional knowledge and genetic resources (Articles 5 and 26). The most significant revision pertains to the conditions that apply to compulsory licensing. According to Article 48, under the condition that patent holders’ business behavior is deemed as constituting a monopoly, a compulsory license can be issued by a related state organ to corporate or individual applicants who can use the patent. Under Article 50, patents for pharmaceutical products can be applied for under a compulsory license in the case of a public health emergency. To put it simply, in both cases, patents can be readily used by relevant parties without the authorization of the patent holders. Although the aforementioned development was noted by some foreign businesses as one of the signs that the pendulum of economic nationalist sentiments was swinging back,79 history is not merely repeating itself. Behind the third revision of Chinese patent law is the interest competition that demarcates a new era, with a more complex set of actors involved.
The third revision of Chinese patent law greatly promoted Chinese society’s patent awareness. The issue of patent was linked to economic development more closely than ever before. The number of patent applications was even incorporated into the performance appraisal index of Chinese patent officials.80 Those policies, however, overemphasized the quantity, rather than quality, of patents. Therefore, Chinese patent law could not fulfill its mission of promoting technological innovation in the country. Moreover, Chinese patent holders complained that, during the process of patent protection, there existed the problems of “hard to adduce evidence, lengthy lawsuit process, high protection cost, low legal compensation, and ineffective enforcement outcome” (juzheng nan, zhouqi chang, chengben gao, peichang di, xiaoguo cha).81
In light of those problems, the Chinese SIPO launched the fourth revision of the patent law in January 2012. After half a year of research, SIPO completed the first draft of the revised patent law, which was circulated among the IPR judges, business professionals, lawyers, and IPR scholars. On August 9, 2012, SIPO published the draft revisions on its website. In January 2013, the revisions were reported to the Chinese State Council for further examination.82 In 2014, the Chinese National People’s Congress conducted a new round of inspection of patent law enforcement. In the report to the NPC standing committee, it was admitted that “the overall quality of Chinese patents remains low and cannot accommodate the needs of our country’s economic and social development; significant gap exists between the outcome of patent protection and the expectation of innovators; the ability to apply patents remains low, which prevents patents from realizing their market values.”83
Guided by the NPC report, SIPO introduced further changes to Chinese patent law in late 2014, revising eighteen existing provisions, adding eleven new provisions, and deleting one provision. The new revisions also added a special part on the application of patents. On April 1, 2015, SIPO posted the newly revised patent law online.84 The fourth revision of Chinese patent law entered the final stage of substantive review.
Conclusion
With China’s WTO entry in 2001 and a series of revisions of the existing patent legislation, the formal patent laws in China have come into full de jure compliance with international patent norms. The evolution of China’s patent regime between 1949 and the present has been a dynamic and complex process, affected by the tensions between the propatent camp and the antipatent camp in the country. Externally, China’s patent legislation is impacted by a complex intertwining of bilateral and multilateral negotiations. The influence of the antipatent camp was not only present before Chinese patent law was adopted; they also tried to influence specific parts of the patent law to suit their needs when the adoption of a patent law turned inevitable in the early 1980s. With the patent law taking roots solidly in China’s legislative establishment, societal factors such as domestic and foreign business groups influenced the specific parts of the legal arrangements for the purpose of safeguarding their interests during the several revisions. As demonstrated in Chapter 2, the competition and collaboration among different societal actors also contributed to influencing the implementation of the patent norm.
The tensions among various economic and political groups during the evolution of Chinese patent law also reflect the gradual opening of a once tightly controlled authoritarian society. Recognizing the achievements of scientific research and technological innovation as private property during the late 1970s and early 1980s was part of the larger scheme of China’s market reform. China’s increasingly close ties with international economy cultivated and strengthened the propatent camp during the adoption stage of the country’s patent law. The voice of China’s rising export sector played a key role in breaking the stalemate between the propatent camp and antipatent camp in the early 1980s. Despite the harsh critique of “lacking a firm stance against the U.S. pressure,” the Chinese IPR delegation’s substantive concessions during the China-U.S. IPR negotiations in the 1990s constituted a key component of the country’s further integration with the world economy. Both domestic reform and opening to the outside world policy in China consolidated the legitimacy of private property, one of the cornerstones of a mature civil society. Although conventionally held as legal and economic matters, the sea changes in Chinese patent legislation represented an inseparable part of the country’s gradual liberalization in the past decades.
Looking into the future, it can be safely predicted that, instead of being compelled by the external influences from foreign governments and international organizations, the evolution of Chinese patent legislation in the next decade will be increasingly driven by the appeals of domestic economic and political groups and foreign businesses investing in China. Although the fourth amendment of Chinese patent law has not been completed, Chinese patent professionals at various levels expect that the revisions will focus on offering stronger protection for patent holders, enhancing the application of patents for industrial use, and promoting the quality of patents. With the rapid growth of the number of patent infringement cases, intellectual property offices at the local level are also expected to be granted an increased administrative mandate to enforce patent protection on the spot.85 Whatever the future outlook of Chinese patent legislation is, the overall direction is clear. That is, Chinese patent legislation must reflect the demands of China’s industrial upgrading, under which the country’s economic growth increasingly depends on scientific research and technological innovation.
The establishment of a full-fledged patent regime in China is not the end of the story. More important is the implementation of those legal regulations and enhancement of China’s scientific and technological innovation. The adoption of the patent norm was already a difficult process given the competition among different actors, mainly at the level of the Chinese central government. The implementation of the patent norm would