Xinhua Insight: How intellectual property protection boosts Chinese economy

Twenty years ago, it was common practice for fabric producers in Jiangsu Province, east China, to copy each other's designs.

This did not change much until in 1996 when a Taiwan company set up a branch in Jiangsu's Nantong, bringing with it more than 100 unique patterns and it took over the market easily.

Driven by profits, local producers tried to copy the Taiwanese designs because their own designs lacked quality.

The Taiwan company was shocked by this oversight of intellectual property (IP) rights and, after a failed attempt to file an IP infringement case, the company had no choice but to leave Nantong.

The company's departure resulted in some soul searching and in 1997the locals moved to establish China's first township-level IP protection office. The office was assigned the authority to register IP, handle disputes, determine the amount of damages to be awarded and disseminate information on IP.

"It was a bottom-up development of IP protection," said Li Mingde, director of the IP research center at the Chinese Academy of Social Sciences, adding that "it was the producers themselves that realized they needed protection."

The Nantong model was praised by the United Nation's World Intellectual Property Organization (WIPO).

"IP protection boosts economic development and innovation," said Li, adding that companies and grassroots innovators had the greatest need for protection.

Song Yushui, a senior judge and deputy director of Beijing Intellectual Property Court, has to deal with IP lawsuits across all sectors.

"There has been a recent shift to technologically advanced areas, which demonstrates China's economic transformation," Song said.

PROMISING SIGNS

Similar IP courts have also been set up in Shanghai and Guangzhou, the two most economically dynamic regions in China.

The move was "absolute progress," John LaBarre, Google's senior counsel on patent strategy, told Xinhua on Wednesday on the sidelines of the Patent Information Annual Conference 2015. The specialized courts showed "much more official and consistent [effort] in IP protection," he added.

Song said the establishment of the Beijing IP court was announced one day ahead of the APEC Beijing Summit last November, displaying China's determination to protect IP to world leaders. Previously, IP cases were handled by the IP tribunal under the Beijing First Intermediate People's Court.

Such courts meet the needs for better IP protection in China. The legal system is also improving to meet the requirements of handling IP cases.

The amounts of patent filings and IP lawsuits brought by Chinese companies have seen double digit increases in recent years.

For the Beijing Intellectual Property Court, more than 10,000 cases have been filed since November, much more than the projected 5,000 cases a year. Judges at Song's court, however, are facing mounting pressure as the case load exceeds expectations, and many were still open.

However, Song said quality, instead of quantity, was the priority. She suggested judges keep up to date with high-tech developments in order to better handle IP cases.

Song also called for heightened professionalism and competence through training. She even suggested lawyers wear robes during IP court proceedings, a requirement lacking in Chinese courts.

Chinese firms have been invested heavily both at home and abroad to develop and protect original technologies. According to a WIPO report, last year Huawei and ZTE, both telecom equipment manufacturers, ranked first and third in the tally of global patent applications. Huawei filed 3,442 patent applications, surpassing U.S. Qualcomm, which made 2,409 applications.

Li Haiqing, a senior legal counsel with a Chinese multinational, told Xinhua that IP protection was key to the company's overseas operations, and all companies must respect each other's IP.

"IP protection greatly boosts innovation, and awareness is becoming stronger in China," Li said. He did point out, however, that the low fines associated with IP infringement and the small amount of damage awards in China as areas that needed attention. Endi