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Going Chinese

49 ChinaChina is the World's second largest economy and the rate of development shows no significant sign of abating. China has been caricatured as the place where designs and innovation are copied and that Intellectual Rights holders are at risk of being abused and exploited.

According to the latest World Intellectual Property (WIPO) data China saw a 33.4% growth in International Patents Applications, placing it into fourth place in the rankings behind USA, Japan and Germany in terms of applications. The United Kingdom is in seventh place, and its number of patent applications fell by 1%. The Company with the most application is China's ZTE Corporation overtaking Japan's Panasonic. ZTE is a global telecommunications company. However, not one registered United Kingdom company appears in the top 100 list of patent registration applicants.

Piracy by way of counterfeit merchandise and Intellectual Property (IP) abuse is an international problem and not a Chinese problem.


Whilst some issues relating to IP abuse in China need to be resolved, the reality is that China wishes to have an innovation led economy and is in the top five countries for patents registration and has been a member of the World Intellectual Property Office (WIPO) for over 30 years.

In an interview Commissioner Tian Lipu of the State Intellectual Property Office admitted that probably prior to 1980 the concept of intellectual property rights in any form was unknown. There was no realisation of someone or some company owning intellectual property rights or that these rights should be treated as an asset or form of property with a commercial value. Even before 1980 China was developing a system for trademark protection including the introduction of State Administration for Industry and Commerce (SAIC) which administers trade mark registration and administration in China. Currently, it takes less than a year to register a trademark in China. Further China has fully embraced by the need to protect someone's right to exclusively use a properly registered trade mark. This has been extended by using Intellectual Property as an asset to leverage borrowings to develop a business.

PIRACY IS AN INTERNATIONAL PROBLEM, NOT A CHINESE PROBLEM.

However, to compete internationally China has realised that it must develop its IP infrastructure and adhere to international standards and regulation.

The consequence is that China has developed its own comprehensive IP infrastructure including patent registration, the implementation of an administration and judicial system, and has signed up to at least 13 WIPO administered WIPO treaties. This includes adopting harmonisation of international patent systems, IP protection of genetic resources and protection of traditional knowledge and folklore.

Further it has ensured protection for IP holders from both home and abroad, for instance the clamp down on bogus Apple stores in China. China is promoting at home the need to understand and respect intellectual property rights including patents, copyright and image rights. The defining benchmark was China's initiative in 2008 to create a knowledge based economy and to encourage indigenous innovation.

CHINA HAS SIGNED UP TO AT LEAST THIRTEEN WIPO ADMINISTERED TREATIES.

As an example, China's patent system was introduced in 2005 and the average growth in patent applications is about 22% per annum. By 2009, China had become the fifth largest user of the Patent Cooperation Treaty ie. whereby Chinese companies are registering their designs and innovations for international protection.

Meanwhile, China's patent office (SIPO) has received over a million applications from overseas companies. Co-operation and discussions with other countries have been crucial to the development of the Chinese IP system. China recognises that whilst it wishes to have a strong manufacturing base it also needs to design and innovate.

The Chinese public's (and the rest of the world's) awareness of China's developed IP structure is demonstrated that in 2010 the 2.36 billion hits against China's trademark website in 2010. Not surprisingly, China now boasts the largest trademark office in the world. China is first in the world for registrations relating to an international trademark registration under the Protocol Relating to the Madrid Agreement.

The growth is likely to continue with further cooperation with other countries and with WIPO.

Similarly, with copyright China has since 1980 developed its own copyright protection and administration system culminating with the National Copyright Administration Of the People's Republic of China (NCAC).

The Music Copyright Society of China (MCSC) is China's only officially recognized organisation for music copyright administration, having issued copyrights for over 14 million music works for its approximately 4,000 members. However, according to Reuters there are proposals to give the State more control over the licensing of music and payment or allocation of music royalties. This has led to an outcry whereby music rights owners who consider their control and financial entitlement is being diminished. The Chinese Government asserts that the proposed changes will make it much easier to deal with music piracy.

However, in respect of TV and TV formats Warner Brother have joined forces with several other companies including China's Mei Tian Mei Yu (Mei Tian) to develop a modern day teenage drama set in China. The series will comprise of 30 sixty minute episodes. With regards to it is regulated by the State Administration of Radio, Film, and Television (SARFT). The rules governing film production in China allow for joint productions, but an overseas company cannot have involvement with a distribution company. IP is at the heart of China's economic development, and by theory should also help the development of the creative industries worldwide as they are confident that the Chinese IP system will uphold their rights as much as the Chinese. This should lend itself to building stronger trade links whether it is with design innovation, film or music.

No one can doubt the great strides made by the Chinese IP system and their strong links with for instance WIPO, but intrinsic to many aspects of IP development particularly publishing, film and broadcast and music is the building of confidence in the freedom of expression. In view of the United Kingdom's Leveson Enquiry concerning media regulation and The Council of Europe's Internet Governance Strategy, one can see the need for an international forum to promote freedom of speech and expression as the next major reform-and hopefully China will be at that table!


Julian Wilkins

Julian Wilkins is Editorial Director for Blue Pencil Media Limited. Julian has a LLB (Hons) in law and M.Phil in law as well as a Diploma in European law and was admitted as a solicitor in 1988; he practices in the area of media, entertainment, and intellectual property law as a consultant for Devereaux Solicitors in London. Julian is also a Notary Public and CEDR accredited commercial mediator. Julian has written for academic publications and contributed to an Exhibition Catalogue about 1960s photographer Philip Townsend. Julian is a member of the International Association of Entertainment Lawyers and also the British Institute of International and Comparative law. Julian is a finalist in The Media Lunch Club “Short Circuit” script competition to be held in November 2011. Julian’s comments “The rapidly changing world economy and technology is presenting incredible opportunities for the Creative Industries and Blue Pencil hopes to reflect and contribute to these changes.”

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