China Positioning Itself As A World IP Rights Leader

No, that’s not a misprint. Nor is it opposite day.  In fact, this revelation is a long-time coming. In June 2017, Professor Adam Mossoff testified before Congress and laid out how the US is in danger of falling behind Europe and China in IP protection. Yes, THAT China. Congress, led by Darrell Issa scoffed. Audibly.

The truth is, China is far from the IP pirate’s haven of yesterday. In fact, Congressman Issa should actually read Professor Mossoff’s research. Nearly 1700 inventions considered patentable in China and Europe are currently being denied patent protection in the US. Far from trivial, our American patent system is actively denying protection for “pioneering, life-saving inventions, such as treatments for cancer and diabetes.” Thus, where will research dollars go if protection for intellectual pursuits are routinely denied at home?

Naturally, however, granting patents is but one part of the equation. Patents are like reservations. As Jerry Seinfeld pointed out, anyone can just “take” a reservation. What’s really important is that you hold the reservation. The patent equivalent of “holding” a reservation is a strong enforcement system. Admittedly, China lags behind the US in this area. Conventional wisdom calls China weak on patent enforcement, with limited remedies and a strong bias in favor of national companies. But what if that were to change?

Enter Chinese Premier Li Keqiang. According to an official statement, Premier Li said “China will adopt a more strict intellectual property rights protection system and will seriously punish breaches of such rights.” Separately, in comments with the WIPO Director General, Li also denied the national favoritism narrative, saying “China treats domestic and foreign companies equally.” Finally, distinguishing China from other countries in the region, Li pointed out that China “does not allow forced technology transfers.” Amusingly, this is precisely what the US system permits by denying injunctions to whole classes of US patent owners.

Erick Robinson, head of patent practice for SIPS (a leading Chinese Intellectual Property firm), pointed out that “China continues to double down on IP enforcement and penalties.” Shen Changyu, head of the State Intellectual Property Office (SIPO), recently spoke at the China Patent Annual Conference, in Beijing, and echoed the Premier’s sentiments. Shen recognized the importance of IP protection for a world power, saying “IPR protection is key to innovation-driven development and international trade, which also plays an indispensable role in the country’s opening-up.” According to a report from the conference, Shen pledged that “China will promote the transformation of intellectual property and encourage technological exchanges and cooperation between Chinese and foreign enterprises” and that “China will also deepen international cooperation.” China ranked second in international applications in 2017, and the number of foreign applications for Chinese patents is up 11% annually.

The US can no longer afford to ignore China as an emerging world power. Investment capital deployed to fuel the fire of genius will undoubtedly flow to where it burns the hottest. While China attempts to enrich it’s fuel mixture, the US deploys a cut-off valve. It’s not difficult to see where this ends unless things change.

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