Crafting the National IP Policy: Will the Tiger learn from the Dragon?

Remember the last time you were in the electronics shop and decided to buy the cheaper Chinese rip off instead? Well IP and business journals across the globe have been reporting for the last month or so about the revamped Chinese IP policy that hopes to forget the days of pirated goods in the hidden pages of Chinese history. The effort to enforce Intellectual Property laws in a far more efficient and manner better aligned to international (especially American laws) is the highlight of the policy.

In an article last month in the Wall Street Journal, suggestively titled “No more Chinese knock-offs”, Mr. Wang Qishan (the Chinese Vice Premier) has stated that the enforcement of Intellectual Property has always been an extremely important goal in his country and that the same will be stregthened by the alignment with the United States laws very soon.

This new development has already started making waves, with China increasingly being regarded as the next IP destination by market experts. An article in IP Watch has accurately outlined what the changed IP Policy means for Chinese Politics and business. Reproduced below is the article for our readers:

“China’s New National IP Rights Strategy Puts IP On Its Political Agenda

By Jia Hepeng for Intellectual Property Watch

BEIJING – With a newly revealed national strategy on intellectual property rights, China has vowed to place intellectual property in the centre of its political agenda.

The outline of the national IP strategy was enacted on 5 June by the State Council, China’s cabinet. It will be followed by more than 20 strategic tasks to be implemented by different government ministries, ranging from amending existing laws to enhancing the juridical powers of the government departments related to IP enforcement.

The long-term goal, the document states, is to develop China into “a nation with an internationally top level of creating, using, protecting and managing IPRs by 2020.”

In the short run, according to the strategy, the number of patents owned by Chinese citizens should become among the highest in the world, and the weight of industries whose essential underlying IP rights belong to China should increase dramatically as part of the national economy in the coming five years.

Although China has been recorded as the world’s top three nations in terms of patent filings, most of its invention patents – the most important among all patents as they cover true innovations – are owned by foreign companies operating in the country.

Statistics of the State Intellectual Property Office (SIPO) show that in 2007, among the 67,948 invention patents issued by the office, 53 percent were filed by foreign individuals or companies.

In order to reach the goal in creating and managing IP rights, the national strategy vows to revise laws on patent, trademarks and copyrights in a timely fashion.

SIPO officials say that the amended patent law will be submitted to the legislature for approval within this year. Revisions of the law of trademarks and the law of copyrights are ongoing.

According to SIPO head Tian Lipu, the previous patent laws are focused on protection, but new legal amendments will stress how to effectively use patents, how to share benefits from them and how to avoid patent abuses, though concrete articles are still unavailable.

Sun Guorui, an intellectual property law professor at Beijing-based Beihang University, said compared with concrete IPR laws, the national strategy will mobilise various government departments and research organisations to advance IPR governance in the country.

“In a big country like China, the most effective policy is to mobilise hierarchic officials from the top leaders, and the strategy plays this role,” he said.

For example, he explained, when Ministry of Science and Technology (MOST) leaders are making policies for giving awards and promotions to top researchers, the number of patents produced by researchers could become one of the indicators to evaluate their scientific outputs instead of simply the high impact papers.

Sun added that by calling for intensifying of juridical and administrative protection of IP rights, the strategy also hints at an increase of the power of IP enforcement agencies such as SIPO and increase the number of IP sections at various courts. So far, only courts in metropolises like Beijing and Shanghai have specialised IP sections.

This was echoed by a leading researcher at the Chinese Academy of Strategic Research on S&T Development, a think tank of MOST, who refused to be identified.

“Despite various IPR laws, some scientists still think filing patents are irrelevant to them and simply ignore this, but if IP issues become an integral part of science policies, they would pay importance,” said the researcher, who added that if the strategy is effectively implemented, the research policies could become more operable in terms of patent filing and management.

Lewis Ho, China representative of the Shanghai branch of the British law firm Simmons & Simmons, welcomes the strategy as a way to boost IPR law enforcement.

According to Ho, the review of the World Trade Organisation (WTO) for China’s five-year WTO membership performance in 2007 confirmed that China has made progress in its legislative efforts in promoting IPR, but blamed law enforcement for being far from satisfactory.

“Enacting a law cannot ensure effective enforcement, so I think the newly revealed strategy could improve this aspect by pushing the government agencies to take actions,” Ho said.

But he cautioned, “The effect of the strategy will rely on concrete measures by the different Chinese ministries and departments in their follow-up moves.” “

What effects could this have on India? Losing opportunities in the face of a better structured national policy. Apart from having an excellent IP regime for the future, the implementation of such a policy at a national level is bound to create new business and research oriented opportunities for China. The strategy as and when decided would also create a definitive structure in terms of how the policy will function, creating a solid foundation for a long standing protection and enforcement mechanisms.

In India, a problem that has plagued us all is the lack of any sort of structure in the manner the IP regimen functions. The handling of numerous aspects of an Intellectual Property law being even more innumerable Departments and Ministries (Commerce, Science & Technology, Chemincals, Health, and even the HRD Ministry?!) certainly does not seem an attractive option when compared to the proposed Chinese Policy. One of our readers, Mr. Yogesh A. Pai, in a comment to a post by Shamnad had accurately pointed out that the need of the hour is “a more fundamental/original thinking on various issues concerning IP within these ministries to arrive at better strategies.” Another astute observation is that “bad policy perspectives may also largely occur due to lack of adequate policy co-ordination.” In his reply to this comment, Shamnad had agreed that the what was urgently required was a national IP Policy. Perhaps as he points out in the reply, the embarrassing situation created by the Mashelkar-Saha fiasco at the Substantive Patent Law Treaty meet at Casablanca will be avoided in the future- especially if such a policy clearly outlines the rights conferred on authorities and prevents them from taking any action that may be without “mandate” so to speak.

With China now evolving a national IP Policy all on its own, maybe the Indian officials should sit up and take a leaf out of the Chinese book. There are several areas of policy making that have been neglected and most often, those that require urgent attention. The law in India as regards Intellectual Property is not all judge made or found in the statute books. A large chunk requires constant updation with International policies- with constant quality review and delegation of duties necessarily required at the moment. Perhaps, as Shamand suggested as a reply to Mr. Pai’s comment, there can be a public intiative to at least start discussions around the policy.

Maybe this will infact help India maintain its edge, rather than regain it in the long run. Most appropriately, a proverb is handy. A stitch in time, saves nine.