China (PRC)
  • China State Council has published Circular on Several Measures to Boost the Growth of Foreign Investment
  • Measures include improving the protection of IP rights so as to encourage inward foreign direct investment
  • Sends clear message that China wants to improve its position on IP rights protection in the eyes of foreign investors

In August 2017 the China State Council published the Circular on Several Measures to Boost the Growth of Foreign Investment. The circular announced measures to ensure the growth and raise the quality of foreign investment by creating an environment that is more law-based, internationalised and convenient for foreign investors.

The measures include improving the protection of IP rights so as to encourage inward foreign direct investment.

Action plan

As of September 2017, 12 national departments including the State Intellectual Property Office, the Ministry of Commerce (MOFCOM) and the State Administration for Industry and Commerce (SAIC) jointly formulated and launched the Circular on Issuing the Action Plan for the Protection of Intellectual Property Rights Owned by Foreign-invested Enterprises.

This is the first time that China has started a nationwide campaign to protect foreign companies’ IP rights. The plan states that it will “severely crack down on violations and offenses such as the infringement of IP rights owned by foreign-invested enterprises”.

From September to December 2017, the plan urged the 12 departments to crack down on violations that infringe trade secrets, trademarks, patent rights and copyrights. It also called for greater efforts to tackle infringement and counterfeiting offences, as well as the import and export of goods infringing IP rights.

The plan assigns each department a special focus with the SAIC taking the lead with trademarks. This includes intensifying efforts to protect well-known trademarks, geographical indications and foreign-related trademarks.

The SAIC will also investigate and punish behaviours such as malicious (bad faith) registration and free- riding of renowned brands, and will clamp down on serious infringements and counterfeiting strongly.

The General Administration of Customs is responsible for tackling the import and export of goods infringing IP rights through joint enforcement actions with international organisations and law enforcement. MOFCOM has been tasked with actively publicising the plan’s implementation and achievements, as well as establishing a good image of China’s IP rights protection.

Targeting the source

In October 2017 the SAIC issued its own Special Action Plan for Cracking down on Trademark Infringements and Looking into Their Sources. The SAIC plan calls for cooperation with trademark owners, industry associations and e-commerce platforms to increase efforts to trace sources in trademark infringement cases. It also calls for information on alleged infringers to be comprehensive and to give details of where the alleged infringement took place and the trademarks in question.

The SAIC requests that ownership information of trademarks held by relevant parties is clear and that the relevant contact information of the parities in charge of rights protection be made available.

Further investigations on the above issues are ongoing and summary sessions will be held in January and February 2018.

Comment

From the circular suggesting China’s continuing demand for foreign capital, to the plan and subsequent SAIC Plan, the message is clear – China wants to improve its position on IP rights protection in the eyes of foreign investors, and is making this fight against IP infringement activity a priority, so that it will continue to be an attractive location to do business for foreign investors.

The summary sessions will provide an insight into how these efforts might continue past February 2018.

Moving forward, it will be interesting to see how the desired outcome of establishing a good image of China’s IP rights protection actually plays out in an improved IP landscape and the foreign investors’ perception of the Chinese market.

The IP community considers these measures to be steps in the right direction and it is hoped that there will be further good news in the first quarter of 2018.

Ai-Leen Lim, AWA Asia, BeijingAWA_Ai-Leen_Lim_cropped_21

This article first appeared on WTR Daily, part of World Trademark Review, in (October 2017). For further information, please go to www.worldtrademarkreview.com

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