Improving Intellectual Property Legislation to Safeguard Innovation and Development

On November 30, 2020, President Xi Jinping made an important speech on stepping up China's efforts to protect intellectual property (IP) rights at the 25th collective study session of the Political Bureau of the 19th CPC Central Committee. In the speech, he pointed out the direction for effective protection of IP in this new stage of development, and put forward important plans and basic guidelines in this regard. 

The law is vital for national governance, and the rule of law is a key pillar of our system and capacity for governance. During his speech, President Xi made a point of emphasizing the important role played by the rule of law in IP protection. He said that a complete IP legal system is an important guarantee for strengthening IP protection, and that work in this area should be conducted in a more law-based manner. IP legislation must take Xi Jinping Thought on the rule of law as its guide, have a footing in overall national strategy, and conform to the requirements of this new stage of development. Meanwhile, we must consistently enhance the quality and efficiency of legislation so that we may use good laws to promote good governance and provide legal guarantees for turning China into an innovative country. 

I. Bolstering the rule of law is the foundation and guarantee for strengthening IP protection

IP rights are a special kind of property right, as the subject of protection is the product of intellectual activities. The establishment, scope, exercise, and protection of IP rights all depend upon legal regulations. Bolstering the rule of law is therefore the foundation and guarantee for IP protection, and efforts to make IP protection more law-based go along with protection work itself. 

In the period immediately after the founding of the PRC, China passed legislation on the protection of IP and launched corresponding initiatives. In 1950, the Government Administration Council (later to be called the State Council) passed provisional regulations for the protection of invention and patent rights and for the registration of trademarks, and in 1963, the State Council promulgated regulations for the management of trademarks to replace the temporary regulations. However, under the planned economy system at the time, the scope and effect of the IP system was extremely limited. The temporary regulations for the protection of invention and patent rights were abolished in 1963, while the regulations for the management of trademarks, although used until the beginning of reform and opening up launched in 1978, had a very finite function in practice.

In an effort to reach out to the public and raise awareness regarding intellectual property issues, China designated April 20-26 of every year as National Intellectual Property Publicity Week starting in 2009. The above are posters from the 2020 event on the theme of IP and the Healthy China Initiative. PHOTO PROVIDED BY THE NATIONAL INTELLECTUAL PROPERTY PUBLICITY WEEK ORGANIZING COMMITTEE 

At the Third Plenary Session of the 11th CPC Central Committee in 1978, the historic decision was made to shift the focus of the Party and the state to economic development and to launch reform and opening up. This marked a new dawn for China's IP legal system as it gradually became regularized. China then instituted the Trademark Law in 1982, the Patent Law in 1984, and the Copyright Law in 1990. The formulation and implementation of these three important laws in the field of IP represented a milestone as they established the basic framework for China's IP legal system and provided a solid legal basis for promoting IP protection. At the same time, other laws were gradually supplemented and improved with IP-related content, setting up a unified system of laws for IP protection. The 1986 General Principles of the Civil Law incorporated a dedicated section on IP rights, which clarified that these rights belonged to the category of civil rights and defined civil liabilities for their infringement. Stipulations on the crime of counterfeiting registered trademarks were included in the 1979 Criminal Law, supplementary regulations on punishment for this crime were passed by the NPC Standing Committee in 1993, and a section regarding crimes of infringing on IP rights was included in the revised Criminal Law of 1997. These developments better defined criminal liabilities for the infringement of IP rights. 

With the establishment of the socialist market economy, China's IP legal system was constantly enriched and developed in order to meet the needs for furthering reform and opening up and addressing practical problems that emerged. The Patent Law, the Trademark Law, and the Copyright Law were amended multiple times in succession, while complementary laws and regulations were gradually refined. In particular, a systematic revision of IP laws and regulations was carried out at the beginning of the 2000s in an effort to fully fulfill China's obligations for joining the WTO. This put China's IP legal system on an international track in all respects, providing powerful legal guarantees for our country's efforts to encourage innovation, attract foreign capital, expand foreign trade, and bolster reform and opening up. 

II. Important achievements in the development of law-based IP protection since 2012 

Since the 18th National Congress of 2012, the CPC Central Committee has made IP protection a higher priority, laying out a whole raft of reforms and launching a whole series of major policies, initiatives, and plans for this purpose. President Xi has put forward a number of important directives on IP protection, which have stressed the following points: 

–"Protecting property rights, and IP rights in particular, is an important part of creating a healthy business environment." 

–"We must refine laws and regulations concerning IP protection, and boost the quality and efficiency of related investigations and reviews. We also need to work more quickly to develop systems for protecting IP in emerging fields, and crack down harder on illegal acts that infringe upon IP rights so that violators pay a heavy price." 

–"IP courts should be established." 

–"We should set up a public IP services system that benefits the people." 

–"We must actively implement distribution policies oriented toward increasing the value of knowledge." 

Acting in accordance with the unified decisions and plans of the CPC Central Committee, the NPC and its Standing Committee have earnestly implemented President Xi's directives regarding IP protection. In light of new developments in efforts to further reform and opening up across the board, new trends in international IP rules, and new demands for turning China into an innovative country, the NPC has carried out multiple revisions of IP-related laws, and given full play to the role of legislation in regulating, guiding, promoting, and guaranteeing IP protection. The Trademark Law was revised twice in 2013 and 2019, as was the Anti-Unfair Competition Law in 2017 and 2019, while the Patent Law and the Copyright Law were both revised in 2020. Meanwhile, content concerning IP protection was added or improved during drafting of the Civil Code and revision of the Criminal Law in line with practical needs. 

The following achievements have been made through legislation. 

First, IP protection has been bolstered.

On the one hand, the scope of IP protection has been expanded, while relevant regulations have been refined and time limits have been extended. The 2013 revision of the Trademark Law expanded the range of trademark identifiers protected and approved the registration of sound trademarks. The 2019 revision of the Anti-Unfair Competition Law improved rules on the scope of protection for commercial secrets, and more precisely defined the types of conduct constituting infringement in this regard. The 2020 revision of the Patent Law stipulated that partial design is subject to legal protection. The 2020 revision of the Copyright Law put forward open-ended rules on the categories of works protected, leaving room for new categories that could emerge in the future. Meanwhile, the Patent Law was revised to extend the term of design patents and introduce the patent term extension. On the other hand, more forceful efforts have been made to crack down upon IP infringement and rules regarding evidence have been improved, providing rights holders with legal support to protect themselves. The revised Patent Law, Trademark Law, and Copyright Law all stipulate that punitive compensation between one and five times the losses suffered should be applied in cases of infringement, and raise the statutory ceiling for compensation to five million yuan. Furthermore, in an effort to address the difficulty in proving infringement, the revised laws state that courts can order those accused of infringement to provide records related to the acts in question, with failure to provide these records resulting in adverse consequences. In addition, Amendment 11 of the Criminal Law imposed more serious criminal penalties for IP-related offenses, and further improved the criminal liability system for IP infringement. 

Second, the exploitation and application of IP rights has been promoted. 

The 2020 revision of the Patent Law improved the service invention system, adding new regulations enabling organizations to deal with service invention-related rights in accordance with the law and granting state support to organizations granted patent rights in putting property rights incentives in place so as to further encourage invention and creation, spur broader application of inventions, and make scientific and technological innovation benefit society. The revised Patent Law also included a new open licensing system encouraging patent holders to license out their patent rights, with the goal of linking supply with demand and promoting patent exploitation in order to better realize the value of patents. 

Third, public IP services provided by the government have been enhanced. 

The 2013 revision of the Trademark Law dialed up the pressure, putting forward explicit time limits for reviews of trademark application, opposition, nullification, and revocation with a view to raising the quality and efficiency of these reviews. The 2020 revision of the Patent Law improved regulations regarding government public services on patent information, and stipulated that the patent administration department under the State Council is responsible for the development of a public service system for patent information and should make basic patent data available. It also stipulated that local patent administration departments should bolster public patent services to promote the exploitation and application of patents. 

Fourth, reform of the IP trial system has been supported with the establishment of IP courts and the improvement of litigation procedures for IP-related cases. 

The NPC Standing Committee made two decisions in 2014 and 2020 authorizing the establishment of IP courts in Beijing, Shanghai, Guangzhou, and Hainan, further strengthening judicial protections for IP and enhancing the adjudication of IP-related cases. In 2018, the NPC Standing Committee made the special decision to improve litigation procedures for patent and other IP-related cases, and to set unified standards for judging such cases. 

Overall, since the 18th CPC National Congress, China's IP legal system has been consistently expanded and improved while protection has been stepped up in intensity. Historic achievements have been made in IP protection as we have pioneered a uniquely Chinese path to IP development, and this has played an important role in encouraging innovation, forging brands, standardizing the market, and expanding opening up. According to a 2020 report from the World Intellectual Property Organization, China currently ranks 14th on the Global Innovation Index, a rise of 21 places since 2012, making it one of the most rapidly advancing countries in the world. China also leads the world in the number of patent and trademark applications. 

III. Earnestly studying the guiding principles of President Xi's speeches to further enhance the legal basis of IP protection 

During the 25th collective study session of the Political Bureau of the 19th CPC Central Committee, President Xi pointed out that a well-equipped IP legal system is an important guarantee for strengthening IP protection. While ensuring that relevant stipulations of the Civil Code are executed to the letter, we must work faster to improve relevant laws and regulations and coordinate efforts to revise the Patent Law, the Trademark Law, the Copyright Law, the Anti-Monopoly Law, and the Law on Scientific and Technological Progress in order to make these laws more consistent with each other. Furthermore, we must reinforce legislation in areas such as geographical indications and commercial secrets. To study the guiding principles of President Xi's speeches and do solid work on IP legislation in the new development stage, we must have a grasp of the following points: 

First, IP legislation must further satisfy new demands for protecting IP and encouraging scientific and technological innovation. 

At the Fifth Plenary Session of the 19th CPC Central Committee, it was stated, "We must uphold the core place of innovation in our overall push toward modernization, and make scientific and technological self-reliance a strategic pillar of our country's development." Innovation is the primary driver of development, and protecting IP means protecting innovation. We must use legislation to foster innovation, reinforcing the creation, protection, and application of IP; to encourage innovation, serving and promoting high-quality development; and to spur innovation, meeting the people's desire for a better life. This involves the following specific steps. Number one, we need to adapt to the needs of new and vigorously developing technologies and forms of business, and delve into issues related to IP protection in emerging fields such as big data, artificial intelligence, and gene technology to provide better protection in these fields. Number two, we need to further enhance public IP protection services provided by the government, raise the quality and efficiency of IP-related investigations, and promote better scientific and technological innovation. Number three, as unlawful methods of infringement develop into newer, more complex, and more sophisticated forms, we must take further steps to refine relevant systems in order to provide necessary support for enforcing the law and administering justice more rigorously in the IP domain. 

Second, IP legislation must stay focused on putting China first, helping us integrate more deeply with the global economy while also prioritizing our nation's security and interests. 

Intellectual property is a core element of international competitiveness. Strengthening IP protection is therefore the biggest boost for making China's economy more competitive. Our IP legislation must serve the overall circulation of domestic and international economic flows, using rigorous protection of IP to improve the business environment, better attract foreign capital, and make progress in building a new and more open economic system. It must also conform to new developments in China's transformation from a major absorber to a major producer of IP. With this in mind, we must carry out more in-depth study of foreign IP systems and conduct effective international coordination on IP protection in order to provide Chinese enterprises with institutional support to ensure that they receive equal protection as they go global. At the same time, IP legislation must strike the right balance between strengthening protection and preventing abuse, remaining focused on safeguarding national security while forestalling the overextension of the rights of individuals and enterprises. We must be on guard against corroding and seizing our country's core technologies and patents by foreign capital, and against abusing IP protections to jeopardize Chinese research and innovation by foreign-funded enterprises. We must effectively coordinate our efforts on IP protection, anti-monopoly, and anti-unfair competition through legislation, and create legitimate and forceful measures to restrict the abuse of IP rights. 

Third, IP legislation must uphold the principle of legal uniformity, promoting different legislative items in a coordinated manner and boosting continuity between laws.

We must ensure effective coordination and integration between individual IP laws. Though these laws differ somewhat in terms of what they protect, they share a focus on the products of intellectual activities, a similar institutional imperative in terms of strengthening protection, and a common concept of protection. They should therefore be advanced together in the process of legislation in order to achieve coordination and integration between discrete systems. Also we must ensure effective coordination and integration between IP laws and IP-related provisions in other laws. For example, in an effort to inspire scientific researchers to develop and commercialize IP, the Patent Law includes stipulations on ownership, rewards, and remuneration with regard to service inventions, while the Law on Promoting the Transformation of Scientific and Technological Achievements includes stipulations on rewards and remuneration for persons who have made important contributions to the completion or commercialization of scientific and technological achievements. Both of these need to be further coordinated in order to leverage greater synergy for encouraging innovation. To give another example, individual items of IP legislation are weighted toward the protection of IP, and only include stipulations in principle on the abuse of IP rights, particularly abuse with the goal of eliminating restrictions or competition. Therefore, relevant regulations in the Anti-Monopoly Law and others need to be refined in order to provide institutional support. 

(Originally appeared in Qiushi Journal, Chinese edition, No. 3, 2021)