Greater Protection in China?: China’s Intellectual Property Rights Developments in 2011
On December 19, 2011, the World Intellectual Property Organization (WIPO) issued a report indicating that China’s applications for patent, trademark and “international design” protections increased significantly in 2010. A few days later, Thomson Reuters released a report that further indicated that China surpassed the United States and Japan in the total number of patents filed in 2011. Finally, on the same day, the United States Trade Representative (USTR) removed China’s biggest internet company from the list of “Notorious Markets” Report.
In its December 19 report, WIPO stated that the patent office in China has seen “the most dramatic increases in application levels,” from 2001 to 2010. The WIPO report cites a number of statistics and figures, many of which indicate steady growth of confidence in the Chinese intellectual property system and may be indicative of increased foreign-investment in China. For instance, patent filings in China have steadily increased from 63,450 to 319,177 and have sustained growth at an average of 22.6% over the nine-year period. Although this trend has not changed the United States Trade Representative’s perceptions of China as a questionable market for intellectual property investment, this trend may be illustrative of an increased awareness and effort on China’s part in meeting intellectual property protection and enforcement needs.
The Special 301 Report issued by the USTR provides a list of markets that the United States perceives as not living up to trade obligations and/or fair business practices. The USTR and American industries use the Special 301 Report to monitor activity in the named countries and markets for non-compliance with international obligations. China has been on the USTR Special 301 Report for quite some time, primarily because of its weak intellectual property rights enforcement mechanisms. The information that the USTR Special 301 Report provides is meant to increase transparency in investment and encourage countries and big market players to adjust their activities to eliminate piracy, counterfeiting and unfair business practices. Although getting off of the USTR Special 301 Report can be a challenging task for certain countries and markets, one of China’s largest internet companies escaped a similar list this year – which hopefully will lead China to continue moving towards greater intellectual property rights protections.
As the USTR has indicated in the past, “The Notorious Markets Review identifies markets in each category that are particularly prominent examples of where infringing goods and services are sold.” Although the list of Notorious Markets is not exhaustive, it is a good indicator for intellectual property rights owners as they decide where to file for protection. The Notorious Markets Review, which was previously issued in the Special 301 Report, is now published separately to further expose infringing markets. Baidu, Inc., one of China’s largest internet companies was listed on the Notorious Markets Review in February of 2011 for not adequately protecting intellectual property rights and allowing piracy to occur openly. In a more recent publication by the USTR, Baidu, Inc. was removed from the Notorious Markets list for its positive actions towards eliminating piracy and counterfeiting.
While Baidu, Inc. may not have been required to take as extensive measures as China would have to in order to escape its designation as a “Notorious Market,” Baidu’s quick escape may be indicative of an easier threshold. These recent publications and findings are positive indicators for change in the Chinese intellectual property system. Although the protections available in China from piracy or counterfeiting may not be as extensive as those found in other industrialized countries, the growing recognition of the need for patent and trademark protection seems to be shifting attitudes in China. As a result, not only did 2011 prove to be one of the best years for intellectual property rights recognition in China, it may even be the first step toward harmonization and freer trade practices.