China’s leaders have thrown their weight behind a new drive towards IP rights protection, write Richard Li and Joy Jiao

Backing from the top on intellectual property (IP) rights in China may have been a long time coming, but its determination of message has been made clear. This, coupled with the timing of a host of regulatory changes, makes for some upbeat assessments for IP protection.

Take the meeting of the National People’s Congress (NPC) held in March this year, where Li Keqiang, premier of the State Council and head of China’s government, stated that “launching a pilot project for comprehensive reform of the administration of intellectual property (IP), and improving the IP creation, protection and application regime” will be one of the key focuses of government work this year.

At a press conference after the adjournment of the meeting, Li further stated that the government wants to create an environment for fair competition among market entities and resolutely investigate and handle the numerous violations of laws and regulations that are being closely watched by the public, including infringement of IP rights.

Wang Jianguo IP Director Haier Group

In the past 12 months, a number of important IP-related laws and regulations have been adopted or revised. A series of IP cases has also drawn the attention of the populace, e.g., the retrial of the Jordan trademark case by the Supreme People’s Court (SPC), “The Voice of China” case, and the USB key product patent infringement case, all of which triggered heated public debate.


In March 2017, the NPC adopted the General Provisions of the Civil Code, in which article 123 specifies that civil subjects enjoy IP rights. “As compared with the General Principles of the Civil Code, which only lists copyright, patent and trademark rights, the [newly adopted] General Provisions of the Civil Code add such items as geographical indications, trade secrets, integrated circuit layout designs, new plant varieties, etc.,” states Frank Liu, a partner at the Shanghai office of Jincheng Tongda & Neal.

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Keeping trade secrets

Chen Yaodong, the Asia-Pacific IP director at Akzo Nobel (China) Investment, has noticed that both the US and EU issued regulations on trade secret protection in 2016. The amended draft of China’s Anti-unfair Competition Law has also enhanced the protection of this kind of IP. He believes that trade secrets are likely to become “intellectual property” for the following reasons:

  1. The determination of the rights to trade secrets is based on the court’s recognition of the secrecy of, and the protection measures for, the information claimed by the rights holder, not depending on the approval of other government authorities. The trade secret is not subject to a particular scope of definition, and thus can cover many kinds of information;
  2. Trade secrets enjoy strong protection. Infringers are also subject to criminal liabilities, in addition to the liabilities they would have incurred in other types of IP infringement as well.
  3. Chen Yaodong
    Chen Yaodong

    The protection of trade secrets enjoys cross-jurisdictional enforcement. Unlike other kinds of IP, trade secrets face much less jurisdictional limitation. The court in one country may render its judgment on liabilities on the basis of the infringement behaviours a party has committed in other countries.

“Among the IP cases involving Chinese multinationals, the number of trade secret cases keeps increasing, so corporate counsel are in urgent need of legal services providers who have a strong trade secret protection practice,” says Chen.


New judicial trends and IP protection strategies

The principle of trademark rights exhaustion