Refocus on IPR as firms fight for own rights
- By Ni Tao
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E-mail Shanghai Daily, June 3, 2016
Intellectual property rights (IPR) protection is steadily emerging as an issue central to Shanghai’s bid to become a world-leading innovation center.
Any serious attempt at safeguarding IPR must involve strict enforcement of IPR laws, conventions and regimes, as well as harsh punishments for offenders.
Shanghai authorities have been trying hard over the years to stamp out such violations, as evidenced by the raft of charges brought every year against domestic businesses accused of IPR violations.
But this is a process fraught with setbacks, as exemplified by the still rampant production and sale of counterfeit goods across China.
Experts from home and abroad gathered during the recent Shanghai Forum — co-organized by Fudan University and South Korea’s Korea Foundation for Advanced Studies — to offer their thoughts on how to address these and other thorny IPR problems.
Instead of fighting IPR infringement alone, Chinese firms and entrepreneurs should be encouraged to pursue patent registration and ownership rights themselves, said Lu Guoqiang, head of Shanghai Intellectual Property Administration.
In many ways, this is already happening.
Having been in his post since 2009, Lu said the city has seen a surge in patent applications in the past few years.
In the five years ended 2015, businesses and individuals in Shanghai applied for and secured a total of 4,855 patents recognized under the international Patent Cooperation Treaty.
This number represents a staggering increase of 214.9 percent from the previous statistical period (2006-2010), said Lu.
And the ownership of patents per 100,000 Shanghai residents stood at 289 as of 2015, second only to Beijing (613) nationwide and well above the national average of 63. In the next five years, Shanghai’s figure is expected to reach 400, Lu noted.
But growth in numbers doesn’t necessasarily translate into strength in quality. Former US Deputy Secretary of Commerce David J. Kappos, who is now a partner at the law firm Cravath, Swaine Moore, told the audience that these days Chinese patent applications outnumber the rest of the world’s combined.
Nonetheless, citing a recent report, he observed that revenues accruing from Chinese patent authorization are roughly equal to those reported by Singapore. This is an indication, said Kappos, of the relatively limited financial rewards received by patent holders.
Matter of quality
He thus argued that in the Chinese context patent application is no longer a game of numbers; rather, it is fast becoming a matter of quality.
And since the entire country is in the midst of an innovation campaign, it’s high time for a shift of focus from mere quantitative growth to qualitative growth, he added.
One of the most widely resented practices concerning IPR in China is the so-called practice of “trademark squatting.”
“Many firms seeking to do business in China have found that their trademarks have already been registered by local businesses or squatters who are willing to release the marks only if they are compensated by the actual owners,” Kappos noted.
He went on to say that China should move away from its current system of rewarding trademark squatting to a more market-oriented system that creates incentives for Chinese innovators to develop new and differentiated brands and trademarks.
In the past, Chinese companies are often accused and found guilty of infringing IPR, but tables were turned in one recent case when Chinese telecommunications giant Huawei filed a lawsuit against its Korean counterpart Samsung over alleged acts of IPR infringement.
Despite the case’s milestone significance, Lu of the Shanghai Intellectual Property Administration said Huawei’s case is more an exception than the rule, as the majority of Chinese firms are still stuck at the bottom of the global corporate pecking order.
Yet this example does reflect some notable changes in the realm of IPR.
As businesses like Huawei and ZTE, another major Chinese supplier of telecommunications equipment, reap the benefits of their enormous R&D expenditures and go for global market share, there is a greater likelihood that they will find themselves suing others for infringement, rather than the other way around, said Lu.
