Founded in 1949, the People’s Republic of China patterned its system and institutions (including their intellectual property institutions) from the United Soviet Socialist Republic. It was in August 1950 when the central government of China came up with the Provisional Regulations on the Protection of Inventions Rights and Patent Rights. Under this regulation, Frietsch & Wang (6), mentioned that the state owned the patents and the inventors had been awarded with certificates for inventions made in the course of their employment.
In any case that the inventions were made outside the line of their work, the inventors were granted the ownership. The central government also came up with the Provisional Regulations on Trademark Registration that invalidated the registrations that were made during the Guomindang government. The 1960s witnessed social movements which brought material incentives for creative activities into attention (Frietsch & Wang 6). Because of this the regulations concerning Intellectual Property Rights had been amended to reduce property rights and other material incentives.
During this time, more regulations had been produced to encourage innovation and to protect the rights of the people behind them. This included the Regulations to Encourage Inventions, the Regulations to Encourage Improvements in Technology and the Regulations Governing the Control of Trademark which replaced the Provisional Regulations on Trademark Registration. However, the regulations and restrictions that had been promulgated to protect the intellectual property rights of the people were ignored with the 10-year Cultural Revolution which started in 1966.
During this period, the central government turned down almost all forms of scientific work and ignored knowledge. It was during this time when no payment was made for invention or publication and the intellectual property rights of the people were completely ignored (Frietsch & Wang 7). With the end of the Cultural Revolution, Frietsch & Wang (7), said that the new leaders of the People’s Republic of China began to realize how important science and technology is. With this, they launched a series of programs which aimed towards motivating intellectuals to scientific work.
As a result of this, a legal framework concerning intellectual property regulations was restored including the 1963 invention regulation and trademark of regulation. However, the protection and granting of intellectual property rights caused a debate as the patent system was seen to go against socialist policies. At the same time, it was perceive that this system could also stifle the development of domestic industries and at the same time, increase the dependence on foreign industries.
However, those who are in favor of the IPR regulations say that this could enhance and promote innovation activities. It could also assure foreign investors of the intellectual property protection and encourage international technology transfer. Not only that, this would also enhance the global image of China and at the same time, protect the technology of the Chinese. The issue was only resolved with the decision made by the late leader of China, Deng Xiaoping. The leader was in favor of the patent law.
In March 12, 1984, the National People’s Congress came up with the first patent law which was patterned after the patent laws of different countries (Frietsch & Wang 7-8). In line with this, the promulgation of the Trademark Law and Copyright Law were also promulgated that were also based on international treaties and conventions just like the Paris Convention, the Madrid Convention and the Universal Copyright Convention. Intellectual Property Rights regulations in China during the first forty years after the take over of the Chinese Communist party had been shaped by the political events happening within the country.
However, the 1990s saw a shift in this as intellectual property regime is under mized pressure from both internal and external forces, Frietsch & Wang (8) mentions. In 1979, the People’s Republic of China and the United States of America had its first IPR negotiation called the China Bilateral Trade Agreement where the former agreed to protect foreign patents, copyrights and trademarks (Frietsch & Wang 8). Since then, the People’s Republic of China began participating in international IPR conventions and continued the promulgation of regulations that are geared towards the protection of intellectual property rights.
However, disputes over intellectual property rights between the United States and China occurred in the following decades. It was identified as a priority foreign country under Special 301 which failed to protect U. S. intellectual property in 1991. In line with this, the United States once again threatened China to improve its IPR regulations by threatening to impose trade sanctions upon the latter. This then resulted to heated bilateral negotiations which culminated in 1992 with the Sino-U. S. Memorandum of Understanding on the Protection of Intellectual Property.
As part of this agreement, the People’s Republic of China agreed to revise its laws to ensure the protection of intellectual property and at the same time, vowed to participate in major international conventions. However, China was once again complained in 1993 or violating U. S. copyrights on certain goods such as computer software and CDs. As a result, the focus was once again shifted from legal measures to the enforcement of the IPR (Frietsch & Wang 8-9). As a result, bilateral negotiations took place one again from 1993 until 1995.
An action plan was reached to strengthen the enforcement of the IPR laws. Afterwards, new regulations with regard to International Property Rights were issued, including the Report on Chinese Enforcement Actions under the 1995 Agreement in 1996 and the addition of Article 216 to the Criminal Law which provided criminal penalty to those who are involved in patent counterfeiting. In 2001, the Copyright Law and Trademark Law were amended against the rules of the World Trade Organization (Frietsch & Wang 9).
Counterfeiting is a global phenomenon, often seen to be a factor which affects developing countries. In fact, even the United States of America and Korea encountered the same problem at a certain stage of their economic development. However, this phenomenon is unprecedented in China, and has significantly made them the number one producer of counterfeit goods in the history of the world, thus affecting its international trade relationships with other countries, Yao (117) mentions.
The infringement of IPR in the People’s Republic of China certainly goes beyond the entertainment industry which reduces the revenue of recording artists, producer and actors, but infringement of IPR and counterfeiting in China involves industries such as automotive and aviation parts, manufacturing and pharmaceuticals manufacturing, explains Kanji (1264). Because of this, the health, safety and revenue of people within and outside the People’s Republic of China are highly threatened.
Aside from this, it also increases the trade deficit being experienced by the US, one of China’s major trade partners. According to the report of the State Council of China, as mentioned in Kanji (1264), the value of pirated goods in the country, in 2001 alone, is between nineteen to twenty-four billion dollars, which then accounts for one-fourth of the 2001 U. S-China trade deficit.