Intellectual Property Rights in China. Zhenqing Zhang
three most controversial points in the bilateral trade relationship, with the other two being the exchange rate of Chinese currency and the excessive volume of the U.S. trade deficit with China.27 It is also agreed that the issue of the trade deficit is closely related to intellectual property rights. In all the strategic and economic dialogues between China and the United States from 2006 to the present, the IPR issue has never missed a place on the negotiation agenda. As well, it can be safely predicted that this issue will continue to affect the fast-expanding U.S.-China bilateral trade in the foreseeable future.28 Therefore, the policy relevance of IPR policy in China goes beyond the legal realm and extends well into other important areas, such as politics, trade, and economic development.
A comment by a Beijing-based IPR scholar aptly summarizes the implications of the IPR issues under study:
U.S.-China IPR disputes should not only be understood as happening between a group of people debating with each other across the negotiation table. Instead, that is part of the ongoing bilateral interaction between the world’s biggest developed country and the world’s biggest developing country, between the world’s biggest democracy and one of the world’s few remaining communist countries, and probably between the world’s incumbent superpower and its ambitious possible successor. A thorough knowledge of that issue can deepen our understanding not only of Chinese and probably American political economy, but also the bilateral relationship between the two countries, which is bound to profoundly influence each other and, quite likely, the entire world.29
Chapter Layout
This book aims to unravel the complexities of how various state and societal actors in China compete and collaborate in shaping China’s IPR policy. My introduction lays the theoretical foundation for this book with the comparative literature on IPR enforcement and presents the book’s main theoretical claim. The six empirical chapters following the introduction are grouped into three parts, respectively addressing China’s difficult journey to adopt and implement global patent, copyright, and trademark norms. It is noteworthy that, at least during the early stage of adoption, the Chinese government was a “strategic ratifier” rather than a “sincere ratifier.”30 That is, the Chinese government adopted IPR norms into its domestic legislation not for the sake of enhancing IPR protection but more because it wanted to avoid direct trade conflict with the United States in the early 1990s and to ameliorate its bid for WTO membership in the late 1990s. Thus, although Chinese IPR legislation had already reached the minimum standard set by the WTO during the country’s entry in 2001, obstacles remained when it came to the implementation stage.
The first part, consisting of Chapters 1 and 2, focuses on patents, which mainly protect technological and industrial innovation. Chapter 1 examines the evolution of China’s patent legislation while Chapter 2 examines the implementation of Chinese patent policy. Instead of rehashing Chinese patent law from one article to another, Chapter 1 examines how various domestic and foreign political/economic forces have led the country’s patent regime to its present state. I demonstrate that there was already an incipient notion of protecting technological innovation in China even before the country started its market reform in the late 1970s. Although long suppressed by the dominance of socialist public ownership, Chinese patent legislation gained momentum in the early 1980s. The primary driving forces behind those moves were China’s growing recognition of scientific invention and technological innovation as private property and the need to attract foreign investment and technological know-how. Using newly acquired empirical data, I demonstrate how China’s expanding interests in foreign trade and international technological exchange helped to overcome the opposition from the antipatent camp in the Chinese government in the 1980s and the early 1990s. Marked by China’s WTO entry in 2001, Chinese patent legislation came into full compliance with the global standard.
Rather than focusing on only the patent enforcement bureaucracy, Chapter 2 situates Chinese patent policy against the greater backdrop of Chinese science and technology policy. I argue that China’s science and technology reform starting in the late 1970s has produced mixed results. On one hand, an incipient market mechanism was introduced to China’s applied research sector; on the other hand, the legacy of the planned economy still continues to influence innovation activities in China. That contributes to different attitudes of Chinese societal actors: both foreign IPR holders investing in China and elite Chinese private companies sincerely adhere to the IPR norm since the norm upholds rewarding their innovation activities with market benefits. But state-owned companies are less enthusiastic about innovation because their profits are backed by the state. For the majority of small and medium-sized private companies that cannot afford to invest in expensive research and development activities, IPR is nothing more than a luxury for the big business players. The small and medium-sized enterprises constitute the majority of IPR violators. Therefore, it can be reasonably concluded that successful implementation of patent policy under some circumstances in China should be attributed not only to efficient coordination between various enforcement branches, as the existing literature argues, but also to IPR holders’ active efforts to internalize IPR norms into the government’s policy practice for the government to willingly enforce them.
Consisting of Chapters 3 and 4, the second part focuses on how China adopted and implemented international copyright norms. Chapter 3 argues that the Chinese copyright regime is embedded in the country’s ideology and propaganda policy and is shaped by the combination of domestic demands and foreign pressure for copyright protection. After discussing the intense competition between the procopyright camp and the anticopyright camp within the Chinese government, I demonstrate how the former overcame the opposition of the latter, particularly during the 1990s, and convinced the Chinese top decision makers to integrate into the international copyright regime. I also demonstrate how external pressure hastened the steps of Chinese copyright legislation. That is, both bilateral pressure from the United States and multilateral pressure from the WTO reinforced the already existent, albeit not so powerful, domestic appeal for enhancing copyright protection. Toward the end of Chapter 4, I describe how China’s gradually maturing copyright regime during the early twenty-first century witnessed the growing influence of the country’s literary and artistic creators, an important part of China’s burgeoning civil society.
Chapter 4 moves on to the implementation of Chinese copyright policy. As in the discussion of implementing Chinese patent policy, I do not examine the country’s copyright policy in a vacuum. Instead, I put Chinese copyright policy within the greater landscape of the interaction between market reform and the evolving Chinese propaganda and ideology policy. Specifically, my findings suggest that, in making Chinese copyright policy, the Chinese government pursues multiple policy goals: the top priority is to ensure stability in the realm of ideology and cultural life in the country so as to create legitimacy for the rule of the Chinese Communist Party. The second priority is to generate economic benefits from literature and artistic creation as part of the broader scheme of building copyright industries in China. Protecting the economic and moral rights of literary and artistic creators only comes as the third priority. In practice, the first two goals, particularly the first one, often override the third goal. My findings also suggest that the development of the Chinese domestic copyright industry is constrained by the Chinese propaganda state despite three decades of market reform. Specifically, foreign and private capital are allowed only limited access to the production and distribution of copyrighted works in China; the censorship mechanism still shackles the creativity of Chinese copyright owners. Therefore, the Chinese copyright industry possesses neither sufficient financial resources nor legal