Blog post

Copycat China

The apparent ‘trade war’ between the US and China is looming. Amongst other issues, China's approach to IP - specifically other people's IP - is in the spotlight. President Trump has claimed that the US has a “tremendous IP theft” situation. The BBC reported that the US has a $335 billion annual trade deficit with China, with IP being a large portion of this.

Is a significant change to China's position on intellectual property possible? Many commentators argue that China is simply following in the footsteps of other nations who routinely infringe IP law, and that it may already be too ingrained in the Chinese economy to change. However, China’s recent first steps towards IP reform look promising. At Caselton Clark we are also seeing an increased interest in Chinese-speaking IP lawyers and those with established business ties in the region.


The issue

There has been some historical progress against Chinese IP infringement, the main being The World Trade Organization’s TRIPS (Trade-Related Aspects of Intellectual Property Rights). But there are some who question whether this is now an outdated mechanism. Recently at an Enforcement Strategies in Asia panel at INTA 2018, Nick Redfearn, partner at Rouse International (Indonesia), acknowledged that implementations of TRIPS has been slow and “fatigue has set in”. The economic gain of continually infringing IP for the benefit of the nation means that China’s culture of IP theft is difficult to reverse.

It also does not help that China isn’t the first, and arguably won’t be the last, nation to infringe IP for its own interests. It can be argued that China is simply following in the historical footsteps of other nations that have continually stolen IP as a means for developing their country. The China scholar Frederick Abbott has claimed that the infringement of intellectual property will fuel economic development “until the country reaches the point where intellectual property rights protection becomes economically advantageous to a sufficiently strong set of domestically vested interests”. Therefore the most effective approach would be one whereby countries collaborate with China to reduce its IP theft, and limit the negative impact this would have on its economy.


The times are changing?

In relation, China is reaching the point where it can no longer consider itself a ‘developing’ nation, and so this may have helped its recent focus on developing IP measures alongside the ongoing ‘trade war’ talks.

An example of a recent step by China is its State Intellectual Property Office (SIPO) recently approving a restructuring plan: it will no longer be under supervision of the State Council but rather a newly established State Administration of Market Supervision. It is believed that moving under this purview of this special administration unit will strengthen the SIPO’s IP enforcement powers and drive IP reform. The end goal is to create a collaborative enforcement of patent and trademark rights by bringing them under a single agency’s supervision. The nation’s overhaul of its IP entities will also align China with other major IP jurisdictions where patent and trademark matters are managed together in one government IP office e.g. the UKIPO.

Change is not happening just at a governmental level. Alibaba Group, the ‘Amazon of the East’, continues to encounter difficulties on the IP front but it has recently reported that IP owners filed 42% fewer notice and takedown requests in 2017 compared to the previous year. This ties into the recent announcement of the Alibaba Anti-Counterfeiting Association (AACA), championing a platform for coordinating offline investigations and referrals to law enforcement. This now has 105 companies on board.


Effects on the UK

In a recent visit to the UK, Chinese Ambassador to Britain Liu Xiaoming stated that "The UK has always been a firm defender of the multilateral trade regime. We look forward to joining hands with people from all walks of life in Britain to firmly uphold the multilateral trade regime". Lord Green, Chairman of Asia House, argues that any improvements by China as a result of the United States’ pressure, would benefit Britain. He notes that China’s pledge to promote protection of intellectual property is necessary to their development, while simultaneously being good news for British and European businesses seeking to engage in China.

From our side, Caselton Clark have seen a recent boost in attention to multilingual attorneys who have strong Asian connections in their IP work. If you are a candidate looking to explore new opportunities in this area, or a business that is looking to see what talent is available, then please get in touch.

China has a long way to go before it will be viewed as a fully IP compliant country. Throughout recent history it has been infamous for counterfeiting and blatant disregard for other nation’s patented, trademarked and copyrighted goods. Its focus on economic development and the fact that it is the most populous country on earth makes IP policing a monumental task. However, recent steps by the government have looked promising, and if this process continues the US, UK and the rest of the world would benefit from this renewal of IP law and enforcement.


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