New IPR guidelines helpful for foreigners, experts say

China's recent directive on the protection of intellectual property rights is encouraging and helpful for foreigners, US IP law experts say.

"The Guideline on Strengthening Intellectual Property Rights Protection", jointly issued by the general offices of the Communist Party of China Central Committee and the State Council, backs up a call for stronger IP protection with harsher punishments for infringements.

The document addresses longstanding concerns raised by industry, such as development of a patent linkage system, patent term extension and copyright protection for sports broadcasts, said Mark Cohen, director of the Berkeley Center for Law and Technology.

The references to improving pharmaceutical patent protection through a "patent linkage" system, which links the regulatory approval of pharmaceuticals to their patent validity, can reduce the possibility of drugs being approved that infringe on the innovators' patents. Additionally, generic drug companies are given incentives to challenge invalid or irrelevant patents, he said.

A provision calling for patent term restoration would extend the duration of a patent based on regulatory delays in obtaining its marketing approval, said Cohen.

The guideline also calls for improved protection for live sports webcasts, which are difficult to protect under the copyright law, he said.

"These are typical of many of the provisions in the guideline: They are helpful for foreigners, and many foreigners have long lobbied for their consideration by China," Cohen said. "In the long run, they will be even more helpful for China by further supporting China's efforts to be an innovative and creative economy."

Mei Gechlik, founder and director of China Guiding Cases Project at Stanford Law School, said, "The document's explicit reference to the establishment of a comprehensive IP Case Guidance System is encouraging".

The project's research has revealed consistent, significant progress made by Guiding Cases, so it's wise for the Chinese authorities to recognize them as an important means of strengthening IP protection, she said.

As 2020 marks the 10th anniversary of China's Guiding Cases System, it's timely for the Chinese leadership to recognize its value and to leverage this success to strengthen the IPR protection, Gechlik said.

In the 2019 member survey of the US-China Business Council, none of the respondents said China's IPR protection has deteriorated, and nearly 60 percent reported improved protection, the highest percentage cited in any US-China Business Council survey.

"American companies attribute these improvements to the Chinese government's increased emphasis on IPR protection, as well as a variety of new laws and regulations that aim to enhance protections," the council's report said.

In a letter to its members in November, the council wrote, "In recent months, many positive developments on IP have happened in China. ... China has introduced a variety of regulatory changes to improve protection and enforcement of intellectual property rights."

Last December, the central government promised to implement new measures aimed at protecting foreign IP, and a law containing those rules will take effect next year, the US-China Business Council said.

The draft regulation on implementing the Foreign Investment Law, released early in November, includes stronger, more detailed provisions on IP protection for foreign investors and enterprises and bans forced technology transfer.