China makes plans for stronger IPR protection

China will encourage innovation through better protection of intellectual property rights (IPR) during the 13th Five-Year Plan period (2016-2020).

A guideline has set targets to improve IPR rules and regulation in emerging fields, including internet plus, e-commerce and big data.

Patents are expected to increase from 6.3 per 10,000 people in 2015 to 12 per 10,000 in 2020. Royalties earned abroad will rise from $4.44 billion in 2015 to around $10 billion in 2020, if expectations are met.

At a press conference explaining the guideline, Gan Shaoning, deputy head of the State Intellectual Property Office (SIPO), said that China has a complete, internationally recognized legal framework for IPR protection.

Stronger institutional protection

China has already introduced tougher penalties, but there are still shortcomings, including insufficiently rigorous protection and recurrent violations. Last year, in a circular on private investment, the Supreme People's Court (SPC) called for yet tougher punishments for IPR violations.

China's courts heard 134,000 IPR cases in 2014, one fifth more than the year before, according to a judicial IPR white paper.

From January 2014 to November 2016, more than 13,400 people were arrested for IPR crime, according to the Supreme People's Procuratorate (SPP). Over 24,000 people were prosecuted for violating IPR during the same period.

Special IPR courts were established in 2014 in Beijing, Guangzhou and Shanghai and have brought about significant improvements. During the past five years, China passed 14 laws and regulations on IPR and signed 171 cooperation agreements with 63 countries, regions and international organizations.

"Our better law enforcement and a tougher stance on IPR are obvious to people at home and overseas," said Yang Yanchao of the China Academy of Social Sciences center for IPR law studies.

Innovation-driven development

Creativity in China is booming. Chinese submitted 117,000 international patent applications under the Patent Cooperation Treaty between 2011 and 2015, 2.2 times the amount during the previous five years.

In 2015 the number of patent applications filed by Chinese for inventions reached 1.1 million, the fifth consecutive year at the top of the world's patent application list.

The numbers speak of the importance China attaches to IPR protection, said Cao Xinming of Zhongnan University of Economics and Law center for IPR studies.

"China values IPR in social and economic development," Cao told Xinhua. "To ensure stable economic growth, China has to encourage innovation, the success of which depends on IPR protection," Cao remarked.

Cao's view was echoed by Yang. "China is encouraging innovation and entrepreneurship. Protecting IPR is important because technology is the key to survival for smaller businesses."

To boost innovation, the central government set aside 1.4 billion yuan (about $200 million) for local patent operations and helped establish more than 1,700 IPR enterprises.

Jordan and Qiaodan

In 2012, Michael Jordan sued Qiaodan Sports, a Chinese sportswear and shoe manufacturer, for unauthorized use of his name and identity.

Last month, the SPC ruled in favor of the US basketball icon against the Chinese firm which had infringed his trademark. The former NBA star is widely known in Chinese as "Qiaodan."

The court ruled that in the dispute, "Qiaodan," the transliteration of the Chinese version of "Jordan," violated Jordan's right to his name and broke the Trademark Law.

Registration of the "Qiaodan" trademark was revoked, but the court also ruled that Jordan has no exclusive rights to the use of the word "Qiaodan" and rejected his claim in this regard.

Jordan said he respected the Chinese legal system and looked forward to a Shanghai court's rulings on a separate naming rights case.

The Jordan/Qiaodan ruling shows China's determination to protect IPR and suggests that China will treat domestic and foreign parties in the same way, Yang commented.