By Dr. Ramnath Reghunadhan 
There is a need to encourage the open exchange of more intellectual property data and to bolster the hierarchical and classified management of intellectual property public service organisations in China. Strengthening the supply of public services and enhancing their effectiveness is also necessary to raise the standard of intellectual property public services in the country.
The evaluation of the intellectual property (IP) ecosystem in the People's Republic of China (PRC) is regarded as being of utmost importance when analysing the changes associated with the country's shift from a resource-driven to a high-technology economy. It establishes the country's level of innovation, competitiveness, and possible technological advancements. In a recent description of IP goals for 2021–2035, the Chinese Communist Party Central Committee and State Council emphasised intellectual property as a “strategic resource” for China's worldwide competitiveness. The IP ecosystem includes all characteristics that show the application of human intelligence and creativity, which primarily emerge as “creations of the human mind” with a more internalised commercial and/or moral worth. Patents, industrial designs and trademarks are examples of IP-driven activities that build connections for globalisation and a corresponding rise in international trade and investments. IP has become an essential factor towards attracting greater capital and technological inflows and also creates a ripple impact on regimes worldwide, notwithstanding the PRC.
The China National Intellectual Property Administration (CNIPA) is the nodal agency for the governance of the IP ecosystem in the PRC and releases the data on various indicators, which is supported by the State Intellectual Property Office (SIPO). A “White Paper on the Development of China's Intellectual Property Insurance (2022)” was published by the State Intellectual Property Office on February 8, 2023. The white paper noted that by the end of 2022, the IP insurance in the PRC would have protected more than 46,000 patents, trademarks, geographical indications, and integrated circuit layout designs owned by more than 28,000 enterprises for a total of more than 15 million US dollars in risk. Regarding product systems, IP insurance has developed a network of more than 40 products, including trademark infringement loss insurance, liability insurance for patent infringement, patent pledge financing, and insurance for patent enforcement. By the end of 2022, more than 22 provinces and 99 cities would have started offering IP insurance, and departments in charge of managing IP would have partnered with reputable insurance companies in Hubei, Shaanxi, Shandong, and other locations.
The data accessed from the Shanghai Intellectual Property Office indicates that in 2022, there would be 801 applications for IP insurance in the city, an increase of 115.9 per cent from the previous year, with an insured sum of US$39 million, a rise of 94.5 per cent from the previous year. In the first batch of 20 intellectual property pledge financing cases released by the State Intellectual Property Office, China Banking and Insurance Regulatory Commission and National Development and Reform Commission in 2022, two cases—"Shanghai Bank Patent Income Rights Pledge Financing Model” and “Shanghai New Intellectual Property Insurance Service Model”—were chosen. The above data and policy guidance fully reflect a state prioritisation toward improving IP application and protection levels, especially for small, medium and micro enterprises with weak IP rights protection capabilities, poor ability to withstand intellectual property risks, and difficulty in bearing high IP rights protection costs. In March 2023, the National People’s Congress (NPC) announced that CNIPA, currently administered as a bureau under SAMR, would be elevated to receive direct oversight from the State Council. The State Council indicated that the reorganisation would accelerate China’s development as a “strong IP nation”.
However, IP insurance has vital, inclusive attributes, offering small and medium-sized businesses protection against IP risk and ensuring businesses' steady and sustainable growth. At the moment, different provinces have different IP insurance company policies. Businesses can determine their own requirements and regional laws to select the appropriate insurance or engage with specialised service providers to provide IP insurance solutions that are appropriate for their development. This prioritises various aspects relating to financing needs, rights protection needs and overseas IP rights. However, in regard to patents in the PRC, in the first half of 2023 (January-July 2023), approximately 5,15,000 invention patents were granted, representing a 9.49 per cent y-o-y growth rate. However, the quantity of utility model and design patents issued significantly decreased. There were 1.25 million issued utility model patents and 3,83,000 granted design patents, respectively, with negative growth rates of 26.62 per cent and 11.12 per cent for each.
By the end of July 2023, the adequate quantity of invention patents in the PRC was 4.64 million, with domestic components (excluding Hong Kong and Macao) comprising 79.52 per cent of the total invention patents. Under the Patent Cooperation Treaty (PCT) of the World Intellectual Property Organisation (WIPO), the number of international applications comprised 40,500, of which nearly 93 per cent of them were filed by domestic applicants. For the first half of 2023, 4.11 million trademark applications were filed in China, of which about 58 per cent were eventually registered. However, Chinese applicants only made 3,536 applications for international registration of Madrid trademarks. There would be 44.54 million registered trademarks in use in China by July 2023. The PRC has allowed the protection of three geographical indications (GI) products, the registration of 117 GI as collective marks and certification marks, and the usage of 4,000 GI by market owners in relation to GI and layout designs of Integrated Circuits (ICs). During the same period, the PRC issued 5,671 licences and submitted 6,616 registration requests for integrated circuit layout designs.
Interestingly, the State Administration for Market Regulation of the People’s Republic of China revised and issued the Provisions on Prohibiting the Abuse of Intellectual Property Rights to Eliminate and Restrict Competition that has been officially implemented w.e.f. August 1, 2023. This regulation is formulated to encourage innovation, maintain a fair competition market order in the field of IP, and assist in the establishment of a unified national market and a robust IP system. It took into account the new situation and problem of antitrust supervision and law enforcement in recent years and has modified and improved: firstly, the expansion of the connotation of “abusing IPR to exclude and restrict competitive behaviour”; secondly, to improve the recognition rules for monopolistic behaviour through the exercise of IPR; and thirdly, to strengthen the regulation of typical and unique monopolistic behaviours in the field of IP. Furthermore, the State Administration for Market Regulation will coordinate the protection of IPR, antitrust and other work, promote the independent and orderly flow and efficient allocation of innovative factors, and effectively maintain a fair competition market order.
In August 2023, the 2023 Outline for Building a Strong Intellectual Property Rights System and the Implementation and Promotion Plan of the 14th Five-Year Plan were also released. These focus on furthering the implementation of a strategy to strengthen the country with IPR, accelerate the construction of a strong country with IPR, and clarify the essential tasks and work measures for 2023. This is encompassed in the “2023 Outline for Building a Powerful Intellectual Property Country and the Promotion Plan for the Implementation of the 14th Five-Year Plan” (the Advancement Plan) issued by SIPO. About seven major areas, 139 key tasks and work measures were clarified by SIPO. In terms of improving the IP ecosystem, the “Promotion Plan” requires improving the laws, regulations, and rules (directly and indirectly) related to IP, to reform and improve the significant IP policies, and strengthening IP rules in various (emerging) fields and sectors. Additionally, the “Promotion Plan” also spells out particular actions for fostering an intellectual property-friendly social and cultural environment, actively engaging in international intellectual property governance, and bolstering organisational protection. The measures include promoting and revising relevant laws and regulations, implementing the construction project of first-class patent and trademark review institutions, and accelerating the construction of data IP protection rules have been proposed.
In the PRC, the strengthening of judicial protection, as well as the administrative protection of IP rights and transparency of the bureaucracy, is of paramount importance. A coordinated protection pattern of IP rights and internationalisation of best practices are incorporated in the recent initiatives of the PRC. It specifically proposes actions to advance and deepen the reform of the national appeal hearing process for intellectual property cases, bolster expert advice on enforcing trademark and patent laws, and develop a high-standard national intellectual property protection demonstration zone. This also entails improving the standard of intellectual property creation, bolstering the full use of intellectual property rights, and fostering market-oriented use of intellectual property rights that are all necessary to improve the functioning of the intellectual property market.
However, there is a need to encourage the open exchange of more intellectual property data and to bolster the hierarchical and classified management of intellectual property public service organisations. The specific actions put forward, include overhauling and upgrading the system for assessing and evaluating intellectual property, actively nurturing and expanding industries that rely heavily on patents, and thoroughly implementing unique plans for patent transformation. Furthermore, strengthening the supply of public services and enhancing their effectiveness is necessary to raise the standard of intellectual property public services.
(The author is Assistant Professor, Department of International Studies, Political Science and History, Christ University, Bangalore, India. Views expressed in the article are personal to the author, and do not necessarily reflect the views of AICIS. AICIS is neither responsible nor liable for the accuracy, completeness, suitability, or validity of any information in the article. Email: [email protected])
References:
1. China National Intellectual Property Administration (CNIPA). (2023). Intellectual Property Statistics (知识产权统计简报: Zhishi chanquan tongji jianbao); Beijing: CNIPA.
2. Beijing Sanyou Intellectual Property Agency; (2023). The Regulations on Prohibiting the Abuse of Intellectual Property Rights to Exclude and Restrict Competition that came into effect from August 1, 2023: <https://www.sanyouip.com/English/a/10989.htm>
3. Office of the United States Trade Representative (USTR); (2023). 2023 Special 301 Report. <https://ustr.gov/sites/default/files/2023-04/2023%20Special%20301%20Report.pdf>
4. Shanghai Patent & Trademark Law Office; (2023). Intellectual property insurance industry develops steadily (知识产权保险事业稳步发展.: Zhishi chanquan baoxian shiye wenbu fazhan). <https://www.lexology.com/library/detail.aspx?g=bb494ccb-b23c-4f98-8496-f372fcf8ba48&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2023-03-08&utm_term=>