China promises ‘severe’ penalties for IP infringers
China is to press ahead with IP reforms aimed at improving its domestic and foreign IP rights amid mounting pressure from the US.
Chinese state news agency Xinhua reported yesterday, July 24, that a meeting of the State Council’s executive agreed to carry out “special campaigns” against IP violations, including the imposition of “severe” fines against offenders.
The Chinese National IP Administration (NIPA) has also announced the establishment of a national centre to promote the resolution of overseas IP disputes.
The news came as director of the US Federal Bureau of Investigation (FBI), Christopher Wray, told senators that the bureau had over 1000 open investigations relating to IP theft, “almost all leading back to China”.
Testifying before the US Senate’s judiciary committee, Wray said that the Chinese government was trying “to steal their way up the economic ladder at our expense”.
Allegations of state-backed IP theft by Chinese actors has formed part of the ongoing tension between the US and Chinese governments, who are currently attempting to thrash out a new trade deal.
The US government accused China of backing a policy of ‘forced technology transfer’, whereby foreign companies are forced to hand over their IP and trade secrets in order to gain access to the Chinese market.
Chinese companies, including Huawei, have also become embroiled in a number of high-profile IP disputes in the US in recent months.
‘Respect IP abroad’: China
Meanwhile, the Chinese government has introduced several new schemes to improve its IP rights system.
The NIPA announced yesterday that it had established a national centre aimed at assisting Chinese companies safeguard their IP rights abroad, while also helping them “better understand and respect the IP systems and rules of overseas jurisdictions”.
According to Xinhua, NIPA deputy head Zhao Gang attributed the increased involvement of Chinese companies in overseas IP disputes to “their inadequate understanding of overseas systems and legal procedures”.
Meanwhile, at the State Council meeting, the Chinese government reiterated that all companies would be treated equally when doing business in the country.
The government also committed to shortening the period it takes to have IP rights registered.
The State Council said that by the end of the year, the maximum period for reviewing “high-value patents” would be shortened to 17 and a half months, while the average review period for trademarks would be five months.
Alibaba ‘more effective’ than US peers
While US concerns remain over the perceived weaknesses of China’s stance on IP rights protection, there is evidence that Chinese companies are leading the way in certain areas.
At a meeting of the US House of Representatives’ judiciary committee last Thursday, lawmakers heard that American e-commerce platforms were lagging far behind Chinese giant Alibaba when it came to anti-counterfeiting.
Doug Collins, Republican congressman for Georgia’s ninth congressional district, told the committee that he had learned at a round table meeting with brand owners that “Alibaba’s anti-counterfeiting policies and programmes are significantly more effective than any of their US counterparts”, the South China Morning Post reported.
In May, WIPR spoke to Alibaba’s vice president and global head of IP enforcement Matthew Bassiur after the release of a report which highlighted the success of the Chinese e-commerce platform’s anti-counterfeiting policies.
In 2018, 96% of notice and takedown requests to Alibaba were processed within 24 hours, while Bassiur told WIPR that rights owners were finding fewer infringing articles on Alibaba’s listings than ever before.
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