Big Steps Taken to Improve IP Protection
Property rights are at the very core of functional market economies.
Companies like Tencent, telecommunication giant Huawei, restaurant chain Guangzhou Real Kungfu and electronics distributor Suning would not have grown to the size they are today without clear ownership of their trademarks and the ability to protect these rights. The same thing applies to carmakers, smartphone makers and famous writers.
The process of IP protection in China has been evolving since the country passed its first patent law in 1984. But this evolution is a process that keeps speeding up, even amid more criticism than appreciation from the outside world.
The latest steps have come in the past week, as part of the annual series of meetings in Beijing known as the "two sessions", which include annual plenary meetings of the National People's Congress and the Chinese People's Political Consultative Conference.
While delivering the Government Work Report at the opening of this year's NPC session, Premier Li Keqiang said new legislation will strengthen IP protection and a system that allows for compensation for IP infringement. New IP protections for foreign investors will also be put in place.
In a comparatively short span of a few decades, China has become the top generator of patents in the world. As is often the case with China, the numbers are impressive. In 2017, more than 1.3 million patent applications were filed in China－more than six times as many as a decade earlier. In addition, 6.4 million trademark applications were filed (almost 10 times as many as a decade earlier) and 860,000 industrial designs (a threefold increase). In 2017, there were more than 2 million patents in force in China.
What is driving this growth is the focus on innovation across the economy. And it is happening with the support of better legislation, dedicated courts and a growing number of companies that live or die by their patents. Computer-maker Lenovo, smartphone maker Xiaomi, electric vehicle maker Xiaopeng Motors and pharmaceutical company 3S Bio are just a few examples. There are hundreds of thousands of others.
With all this IP being generated, it makes sense that the country has taken significant steps to protect this valuable property as well. In 2014, the government approved the establishment of specialized IP courts in Beijing, Shanghai and Guangzhou. And on Jan 1, an IP tribunal was established within the Supreme People's Court to hear appeals related to patent and other specialist IP cases.
China is right in the middle of the US Chamber of Commerce's 50-country International IP Index, which measures how countries nurture and protect IP. Without a doubt, much work remains to be done, but progress has been visible and can no longer be ignored if not properly celebrated.