Bing Zhao

Chinese President Xi Jinping made rare public comments about the country’s IP reform efforts on Monday. Addressing the National Financial Work Conference, Xi called for strengthened intellectual property rights protection and more stringent punishment for infringement.

The National Financial Work Conference, which convenes every five years, sets the tone and high-level policies for China’s financial regulations and reforms. It also offers policy guidance for the upcoming 19th Communist Party Congress, which will be held in the autumn. In his speech to the gathering, Xi framed IP protection as part of overall efforts to improve China’s commercial environment and make the economy more open.

According to Xinhua news, Xi declared that intellectual property rights protection contributes greatly to improving China’s investment and business environment, as well as the overall economy. He called on authorities to advance IP laws and regulations, improve the quality and efficiency of IP examinations, and accelerate institution building for IP in “emerging sectors, new industries and business types”. Xi also signaled determination to toughen IP enforcement in China, saying: “Wrongdoing should be punished more severely so that IP infringers will pay a heavy price.”

This appears to be the first time that Xi has publicly commented so extensively on IP matters, and what he said represents an extremely direct and firm message from the very top of China’s leadership. While it is rare for US or European heads of government to spare more than a few cursory words on IP policy, the Chinese leader addressed these IP issues in a top financial policy meeting – underlining the Chinese leadership’s conviction that IP can help further the country’s economic growth.

Xi’s speech is undoubtedly welcome news to IP rights holders and professionals in the country. Its influence should be reflected in the administrative and judicial spheres in the coming years, given the important policy setting in which it was given. After talking with some local IP practitioners, we have identified several reform efforts underway which may be given some added impetus by the high-level remarks.

  • First, further amendments to China’s Patent Law are likely to be passed at the next National People’s Congress meeting.
  • Second, we will likely continue to see higher damage awards to compensate rights holders in IP litigation cases.
  • Third, the long-rumoured national IP appeals court may come to fruition. The creation of a CAFC-type venue has been touted by some reformers as a natural follow-up to the 2014 establishment of specialised IP courts in Beijing, Guangzhou and Shanghai, and the more recent introduction of specialised IP tribunals in Chengdu, Suzhou, Wuhan and Nanjing early this year.
  • Finally, it is notable that the president emphasised the need to focus on the quality of IP examinations, considering the nation has been putting a great amount of efforts to drive up the number of IP applications in the past years. That means SIPO, the examining authority for patents, is going to be under the microscope at a very high level. Patent applicants would be well-advised to expect greater scrutiny from China’s patent office as a result.

The fact that it was the leader of the world’s second largest economy making these remarks on IP protection says it all. China will see some pretty major and remarkable changes over the next few years, and foreign patent owners in China have to be alert to developments on the ground.