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At-a-glance: State Intellectual Property Office (Patent office) No 6 Xitucheng Road, Jimenqiao Haidian District, Beijing 100088, China Tel: +86 10 6208 3114, Fax: +86 10 6201 9615 Email: sipoffice@sipo.gov.cn Website: www.sipo.gov.cn Trademark... [more]

National Copyright Administration of China (NCAC)
No 40 Xuanwumenwai, Beijing 100052, China
Tel: +86 10 8313 8736 / 8735, Fax: +86 10 6528 0038
Email: huping@ncac.gov.cn or xiangfeifan@ncac.gov.cn
Website: www.ncac.gov.cn

This past year was marked by the 18th Party Congress changing the key players in China's central government. On November 8 2012, Hu Jintao delivered a speech for the opening ceremony highlighting the importance of intellectual property as the way forward to boost the national economy: "We should implement the strategy concerning IP rights and strengthen their protection. We should efficiently allocate and fully integrate innovative resources, and ensure that the wisdom and strength of the whole society are directed toward promoting innovative-driven development," he said.

China has long been known as a manufacturing hub that uses innovation created elsewhere. The shift away from this reliance on manufacturing has been a focus for the government, as iterated in China's 12th five-year plan. The key word is "innovation", with an emphasis on scientific and technological innovation.

Statistics showed a record high for patent applications in China in 2011. That year WIPO reported China received more than 542,000 applications, surpassing America and Japan. The same holds true for trade mark filings with a 32.14% increase in accepted trade mark applications, ranking first worldwide followed by America and France; 2012 saw similar increases.

Practitioners generally agree that Chinese companies are becoming increasingly sophisticated when it comes to handling IP rights. "Traditionally, local Chinese companies did not protect their IP rights," says Michelle Ma, partner from Liu Shen & Associates. "They are much more active now, and there has been more government support in the past three years. Now companies have an increasing budget for quality IP protection."

In order to build an innovation-orientated country, revisions to the PRC Patent, Trademark and Copyright Laws have been in the works. Spring Chang, partner of Chang Tsi & Partners says: "Along with this trend and the new amendments to various IP right laws at the moment, a lot of provisions will strengthen enforcement against infringement and anti-counterfeiting."

The fourth draft to the Trademark Law was released on December 28 2012, and practitioners anticipate the law will come into effect during the first half of 2013. Under the new law, only one application is needed to file a trade mark under multiple classes. Other tweaks include improving the protest mechanism and greater protection against trade mark squatters. The new amendment is also expected to double the fine imposed for trade mark infringement from Rmb500,000 ($80,208) to Rmb1 million.

The proposed changes to the Patent Law will eventually lead to the fourth revision to the law changed since its enactment in 1984. The first draft was released for public comments on August 10 2012.

Lawyers have paid the most attention to provisions relating to enforcement and increasing the power of administrative authorities. A practitioner expressed concerns, commenting: "The amendment is basically an attempt by the IP office to get more litigative powers, but the courts and IP office should be separated. The courts may not support expanding their powers to hear disputes; to give another body such power on patent use will just cause more confusion."

In efforts to encourage innovation, the draft patent amendments also introduce new rules for remuneration for employee inventions that have been hotly debated among practitioners. Lawyers voice their concern relating to the practicability of the proposed system, and how efficiently it could be implemented. It is uncertain when the new patent law will be passed, though lawyers are hoping the law will be passed by the end of 2013.

China's regions

Increased demand for intellectual property protection in China's regions has fuelled the growth of IP boutiques in the past year. There is a continued trend of regional firms increasingly shifting away from prosecution work to develop stronger contentious practices. Practitioners have taken notice that the volume of filings persist, with a mounting emphasis on patents.

The southern region is traditionally seen to be the stronger economic region with a more advanced approach towards intellectual property. Many major Chinese technology companies, such as Huawei, ZTE and Tencent, began in these areas and have built themselves to become globally recognised names today.

There are no signs that the southern region is decelerating in its IP development. For example, the Chongqing Science and Technology Council announced that high-tech enterprises are expected to double next year in the region.

In a move indicating the growing importance of this region, SIPO established a patent examination centre in Guangdong this year. This marks the first local centre for patent examination established outside of Beijing and Shanghai. The centre is scheduled to begin examinations in 2013. "In a few years, there will be no big difference from Beijing," notes a partner.

In its statement, the Bureau of Foreign Trade and Economic Cooperation of Guangzhou Municipality explained: "Upon the establishment of the centre, the state will transfer some patent examination work to Guangdong, in order to provide great convenience to the patent examination and granting in Guangdong, and even in the whole southern China area."

WIPO released a 2012 report that illustrated that the dynamics are gradually changing and the northern provinces are catching up to their southern counterparts. Among the northern provinces, Shanxi ranks first in recording a 131% year-on-year growth rate in patent applications. One partner observes: "More applications will happen in high-tech, environment, energy and new materials industries.."