In the past China has been known to have a lot of IPR infringement cases. Small and medium-sized enterprises (SME) are very active with the Chinese. About 80 % of the US firms that are present in China are compromised of the US SME’s. These firms produce about one-fourth of what US exports to China. With regards to the WTO, China offers a very predictable market growth along with greater access to the market. However, those who require doing business in China should be aware of the huge amount of IPR infringement which is ongoing in the country.
After China was able to join the WTO, it was able to strengthen its IPR strategy to suit the Trade-related Intellectual property Rights (TRIPS) Agreement. However, IPR may still not feel protected of their intellectual property in the huge Chinese market as it remains one of those places in the World were piracy and counterfeiting occurs on a very large scale. Piracy occurs in more than 90 % extent the US organizations make losses in excess of one billion dollars every year.
About one-fifth of all the goods in the market that are available are counterfeited, and any consumer product that is likely to be successful is invariable going to be pirated in the Chinese Market. Piracy and counterfeiting issues not only targets the local products but also the global products which are having very serious implications. Frequently, the Chinese administration has failed to crack down on the IPR infringements that occur in the country.
This may occur due to several reasons such as excessive dependence on the administration measures that the criminal measures to solve IPR infringements, presence of corruption, protection locally against IPR infringements, economic problems, poor training of the IPR enforcements bodies and poor social awareness of the IPR issues (DOC, 2003). China has signed many international pacts such as the Berne Convention, WIPO, Paris Convention, etc, to protect IPR, and an individual company requiring to protect its IP should register with the Chinese IP authorities and agencies.
This is not required for copyrights are the protection is automatic (DOC, 2003). The first patient statue that was formed in the Chinese legal environment was in the year 1984. To extend the scope of protection, this law has been amended once in he year 1992 and once more in 2000. Following the Chinese signing up of the TRIPS agreement, the duration of protection has been extended to 20 years. Following these amendments, the Chinese have permitted patentability of chemicals, drugs, food, etc. In the Chinese patent statues, only those individuals who file their application first for an invention are eligible for a patent.
This is completely different from the US patent policy which works on the principle of ‘first to invent’, rather than ‘first to file’. However, in this aspect, the Chinese are similar to the European and the Indian Patent policy. China has also expressed international commitment in the patent field by signing for the Patent Cooperation Treaty in the year 1994, and as per the directives of this agreement, it would also conducting international patent searches and filing whenever a party locally applies for a patent.
The State Intellectual Property Office (SIPO) of China accepts patent applications in China. The main office of the IP department is located in the Capital Beijing. Several other offices are located in other provinces and municipal areas which play a major role in enforcing the IP principles (DOC, 2003). China first implemented a trademark statue in the year 1982. It amended its Trademark policy in the year 1993 and the year 2001. In September, 2001, the amendments in the Trademark policy ensured that the rules were now TRIPS-compliant.
China has even signed for the Madrid protocol, 1989. Hence, the Chinese Trademarks are protected in the US, and in return, the Chinese would protect all use registered Trademarks. Any person can register his/her Trademark in the Chinese IP Office as the Government follows a ‘first to register’ policy. There was a foreign outcry against the Chinese IP office, as they had registered several similar or identical Trademarks of Chinese local agencies or bodies for Trademarks.
The Trademark Office has cancelled several of such registered Trademarks in order to protect foreign organizations. China is ensuring that local and foreign trademarks including internet domain and local translations are effectively protected through a stringent registration process. Foreign companies have to register their Trademarks in China through appropriate Agents, whereas foreign companies who have established their local offices in the Chinese market can register themselves directly (DOC, 2003).