11 February 2015Jurisdiction reportsXiang Gao

Building an IP powerhouse

It has set a clear goal of building China into an IP powerhouse, with more emphasis on IP use and protection. For example, the goal is to have 14 invention patents owned per 10,000 people by 2020, up from four, and one million copyright registrations, up from 845,000.

The fight against counterfeiting

On November 21, 2014, the Office of the National Leading Group against IP rights infringement and counterfeiting of China announced that in the first three quarters of 2014, Chinese authorities investigated 112,700 cases of IP rights infringement and sales of counterfeit and shoddy goods, and dismantled 1,938 facilities used to produce and sell counterfeit products.

The police pursued 16,100 criminal cases and arrested nearly 20,000 suspects. More than 12,000 cases involving 20,000 suspects were prosecuted. The courts have concluded 11,600 cases, with judgments against 15,700 criminals.

From the cases, three new trends can be concluded:

Crimes tend to be committed by small groups or gangs and they cover almost all aspects, from the supply of material to the production, processing and sale;

The internet has replaced the traditional physical market as a hotspot for infringement; and

Infringement cases are becoming more difficult to investigate because they occur more often in rural areas or the rural-urban fringe zones.

"SIPO urged its branches across the country to partner with various financial organisations to channel more low-interest loans to small and micro businesses and reduce patent insurance premiums."

China will continue the fight against IP infringement and counterfeiting, focusing more on rural areas or rural-urban fringe zones and e-commerce platforms. However, the complexity of IP rights violations and counterfeiting cases calls for a joint enforcement strategy that involves all relevant actors.

Support for small businesses

China’s State Intellectual Property Office (SIPO) released a new policy to support the innovation and growth of small and micro businesses on October 10, 2014. The policy is the first to focus on improving public services and helping start-ups increase their capabilities in innovation and their use of IP.

To help resolve the financing bottleneck, SIPO urged its branches across the country to partner with various financial organisations to channel more low-interest loans to small and micro businesses and reduce patent insurance premiums.

The new policy is aimed at supporting local small and micro businesses in four areas:

To support their innovation development by providing: prosecution highways to expedite patent prosecution for their core technologies; cost reduction of obtaining patent protection; and innovative financial incentives to help them recognise the value of their IP, to seek and obtain IP protection, and to realise the value of their IP.

To make public IP services more accessible by: building public service systems including a province-city-county electronic information system and expert contacts to provide IP education and information resources; encouraging professional IP organisations to include them as members; and encouraging IP agencies to provide discounted service fees to them.

To increase their capabilities in innovation and using IP by: helping to enhance their IP management skills; strengthening their ability to use patent information to make commercial strategy decisions; involving their key personnel in IP training programmes; and encouraging innovation and entrepreneurship.

To create a broad public environment that encourages and supports their IP development by: supporting IP service providers dedicated to assisting them; enhancing administrative powers in patent enforcement; strengthening their awareness of IP protection and enforcement; and creating a positive atmosphere for IP protection via media channels.

About 11.7 million small and micro businesses operate in China, accounting for 77% of the total number of companies. Most of them stay at the low end of industrial chains and are badly in need of IP aid for healthy and sustainable growth.

SIPO’s policy is not only a good way to back the growth of small and micro businesses, supporting the development of the real economy and benefiting the majority of the people, but is also an important way of implementing an IP rights strategy and building a country where IP is respected and valued.

Xiang Gao is a partner at  Peksung Intellectual Property. He can be contacted at: gxiang@peksung.com

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