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Overview of IPR in China: USPTO Perspective

Karen M. HaudaAttorney-Advisor

Office of International RelationsUnited States Patent and Trademark Office

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IPR WTO Dispute

USTR formally requested WTO dispute settlement consultations with China on April 10, 2007 Deficiencies in China’s legal regime for protecting and

enforcing copyrights and trademarks for a wide range of products

Barriers China has placed on trade in books, music, video’s and movies

Formal request for consultation is first step in pursuing WTO dispute settlement

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China’s Legal IPR Deficiencies Excessively high thresholds for criminal liability

Recently reduced from 1000 to 500 infringing works – amount of piracy or counterfeiting must be “serious,” “extremely serious,” “relatively large,” or “huge.”

Disposal of Infringing Goods Permit seized goods to enter the channels of commerce

Denial of Copyright Protection to Works Awaiting Censorship Review During review period unauthorized copies are placed into the market

without threat of liability Scope of Criminal Law on Piracy

China’s law appears to provide for prosecution of certain unauthorized reproduction only when accompanied by unauthorized distribution

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Market Access Restrictions

China maintains import and distribution limitations on certain copyright material Books, newspapers, periodicals, and audio and visual

products

These market access restrictions encourage rampant IPR infringement

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Key U.S. – China Dialogues

Joint Commission on Commerce and Trade (JCCT) – Intellectual Property Rights Working Group (IPRWG) USPTO and USTR co-chair the IPRWG

U.S. - China Strategic Economic Dialogue (SED) Established in September 2006 Provides a broader strategic framework for issues related to

innovation and IPR Limited progress in copyright and trademark IPR areas

for which U.S. has requested WTO Consultations Consultations held first week of June 2007

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Potential Areas for Progress

Patent Law Reform Several drafts developed by SIPO throughout

2006• Latest proposed amendment in December

2006– Provides for 6-month grace period– Disclosure of source of origin (potentially retroactive

effect) and leaves open other disclosure requirements and revocation of patent or no eligibility for a patent for inventions that “depend on genetic resources” and where the “acquisition and exploitation” of the genetic resource “are contrary to relevant laws and regulations of the State.”

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WTO TRIPS Council

China has joined the Brazil/India et al. proposal in the TRIPS Council to amend the TRIPS Agreement requiring disclosure in patent applications of: Source and country of origin of inventions related to

genetic resources and/or traditional knowledge Prior informed consent for use of the genetic resource

or traditional knowledge Proof of benefit sharing agreement

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TRIPS Council Proposed Amendment

Consequences of incomplete/inaccurate/absence of disclosure is to not issue the patent or revoke the patent if it was issued

Proposal is gaining momentum from developing countries

Many developing countries have amended or are considering amendments to their patent laws in a similar fashion

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New Patent Disclosure Requirements

Will impact agriculture industry U.S. Concerns/Position on new disclosure proposal

Doesn’t discourage/prevent misappropriation Doesn’t ensure PIC or equitable benefit sharing May upset ABS contractual agreements between parties if

patent is revoked or not issued Creates uncertainty in patent system Hinders collaborative R&D/ joint ventures Role of patent system should not be a

regulatory/enforcement regime New disclosure requirements will not improve the quality

of patents

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New Patent Disclosure Requirements

U.S., Japan, Korea – Strongly opposed Australia, Canada – Not convinced appropriate way

forward Switzerland – Voluntary national implementation of

mandatory disclosure of source or origin, if known, OK EU – Mandatory disclosure requirement OK, but

sanctions outside patent system Norway – Mandatory disclosure of source and country

of origin, if known, and sanctions in patent system Brazil, India & large developing country contingency –

Mandatory disclosure of source & country of origin, PIC, and proof of ABS agreement and heavy sanctions

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USPTO IPR Efforts in ChinaIPR attaché in Beijing; 2nd attaché in progressWTO request for dispute consultations put a chill

on USG IPR dialog overall, but: USPTO & SIPO dialog still strong Collaborative efforts among the 5-largest patent offices

• USPTO, EPO, JPO, KIPO & SIPO• Agreement to further enhance

– Worksharing efforts– Information exchange– Priority document exchange– IT system harmonization/cooperation

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PVP in China

Strong emphasis on enhancing PVP IPR regime for domestic protection/enhancement

Strong belief that many plant varieties indigenous to China have been exploited unfairly – TK/GR support is likely an attempt to clawback/recover benefits

SED innovation dialog has emphasized desire to protect indigenous innovation

Transparency of system remains problematic Recent evidence of recognition for stronger judicial protection – Highest

People’s Court issued/passed Notification of the Highest People’s Court concerning trial proceeding in courts for

disputes in new plant variety rights Rules for certain applicable legalissues concerning trial proceedings at the Highest

People’s Court for disputes in new plant variety rights – effective February 1, 2007

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PVP Protection in China

Recent publication (April 2007) in Xun-Ning Yi (editor Wei-wei Wang) discusses 10-year anniversary of PVP protection in China; Expresses that - “Establishing intellectual property rights in the agriculture

field is vital to insuring the wellbeing of China’s agriculture and crop safety.”

“Protection is the core.” “Further opening up and strengthening international

cooperation and exchange on new plant variety issues, actively participating in establishment of UPOV international regulations, and enhancing China’s influence and position at UPOV”

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Thank you. For further information, please contact:

USPTOOffice of International Relations

(571) 272-9300karen.hauda@uspto.gov

Karen M. Hauda

Attorney-Advisor, Office of International Relations

United States Patent and Trademark Office