What the China-US trade deal means for IP
China and the US have signed the first phase of a deal aimed at bringing an end to a trade war fuelled partly by concerns over IP theft and technology transfer.
In particular, the deal focuses on the importance of technology transfers between US and Chinese businesses being “voluntary”.
US officials claim that foreign companies have been forced to hand over technical information and proprietary IP as part of deals to gain access to the Chinese market.
China has consistently denied US allegations of ‘forced technology transfer’, but nonetheless took steps to formally outlaw any such practices with the Foreign Investment Law, which came into effect on January 1 this year.
“It will be interesting to see how the provisions are actually enforced in practice,” said Leighton Cassidy, head of IP at multinational law firm Fieldfisher.
“It’s encouraging that both the US and China have sought to address their respective concerns over IP and transfer of technology and the agreement seems to be a good first step,” he added.
According to Cassidy, the deal could lead to an immediate strengthening of IP protection in China, noting that China agreed to strengthen IP protection within 30 days of the deal coming into effect.
“Both China and the US have acknowledged that strengthening IP protection is essential to promoting China's ‘high-quality growth’.”
Gang Bai, founding partner at Wanhuida Intellectual Property in Beijing, said the trade deal would “give impetus for high-quality IP protection in China”.
“The agreement contains concrete provisions for enhancing IP protection, consistent with China’s national goal toward an innovative economy,” he said.
Bai said the deal builds on China’s steps over the past year to bolster its own IP enforcement.
“China has stepped up effort in cracking down bad faith trademark registration and counterfeiting, while the 2019 draft patent law added a provision on term extension,” he added.
‘Improvement’ in China-US relations
Cassidy is hopeful that the deal can lead to a “significant improvement” in China-US relations, but said suspicion was likely to persist when it comes to Chinese involvement in sectors such as 5G cellular communications.
“We can expect to see ongoing and continued scrutiny around foreign investment in US companies particularly in areas where data, privacy and national security are at the heart of these businesses,” he said.
The deal provides a mechanism by which either party can “provide suggestions for the amendment of its laws to its legislative body”.
“We can expect to see more on this as the agreement is implemented,” Cassidy said.
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