Strengthening of IP rights in China
China is not unfamiliar with criticism that it does not sufficiently protect IP rights. With huge venture capital investment being poured into the Chinese technology sector China is seeking to reassure both local businesses and the international community that it is working to improve judicial enforcement of IP rights. The Chinese government recently issued a statement concerning measures it will take to reform IP protection, and a circular calling on relevant government departments, regional administrations and authorities to implement this. It has identified this as key to promoting economic development, particularly in the fields of science and technology.
The statement expressed the desire to encourage innovation and competitiveness through strengthening the creation of IP rights and cracking down on IP infringement, highlighting specific areas for improvement both on the level of substantive law and on a procedural level. To create a fertile environment for innovation, the government has announced its intention to establish more appropriate valuation of IP rights, and to strengthen penalties for infringement. This reflects a gradual trend in Chinese courts towards awarding higher levels of damages that make it more worthwhile for businesses to pursue rights enforcement and that form more of a deterrent to infringing IP rights.
In recent years, China has sought to deflect the perception that there is a bias towards local parties in litigation where the forum is a municipal court, with the set up of specialised IP courts that remove IP cases from local jurisdiction. The government hopes to gather the experiences of the specialised IP courts in Beijing, Shanghai and Guangzhou and to replicate best practices in other courts.
The government has stated that measures it would take to improve the IP litigation process included enhancing the role and selection process of experts, enhancing expertise and knowledge, and improving the efficiency of relief that courts are able to provide for infringement. A particular criticism that has been directed at the litigation process in China has been its lack of formal pre-trial disclosure procedure and the fact that the burden to produce evidence is on the claimant. In its latest announcement, the government has sought to address this, undertaking to strengthen rules and procedure on disclosure and the preservation and use of evidence.
China also announced its intention to incorporate international IP standards into Chinese IP law, and to seek to enhance the credibility of Chinese judiciary in the field of IP as well as standardising judgments.
With investment in Chinese start-ups already reaching previously unseen levels, greater confidence in IP protection could see China as a leading hub for technological innovation and investment in the near future.