China’s IP Protection Development: A Comprehensive Overview

China’s IP protection framework has significantly advanced through legislative amendments, the establishment of specialized courts, and streamlined legal processes, reflecting a commitment to align with international standards. In 2023, there was a substantial increase in patent and copyright filings, along with notable developments such as China’s accession to the Apostille Convention, which facilitates IP litigation. These efforts highlight China’s focus on fostering innovation and improving IP enforcement efficiency.

Intellectual property (IP) rights, essential for fostering innovation and economic growth, have a longstanding but evolving presence in China. These rights, encompassing patents, trademarks, copyrights, and trade secrets, ensure that creators can reap the benefits of their inventions and works, thus incentivizing further innovation. Historically, China’s approach to IP protection began to take serious legal form in the mid-1980s, aligning its framework with international standards and integrating more deeply into the global economy.

Despite these legal advancements, violations of IP rights remain a major concern. Allegations of IP theft and the prevalence of counterfeit goods are still reported, with many counterfeit items seized globally tracing back to China. This situation underscores the complex challenges in enforcing IP laws within the country.

This article aims to provide a comprehensive overview of the development of IP protection in China. It will explore the historical context of IP laws, the current challenges faced, and the roles of various stakeholders. Understanding these dynamics is crucial for devising effective strategies to improve IP enforcement, thereby fostering a more innovation-friendly environment both in China and globally.

China’s IP protection landscape

The journey of IP protection in China spans several centuries, but formal legal considerations emerged relatively recently.

China’s initial effective steps in IP protection began in the early 20th century with the introduction of basic laws and regulations. Significant progress occurred in the late 1970s and early 1980s during China’s economic reform and opening up. This period marked a substantial recognition by the Chinese government of the importance of IP in promoting economic growth and international trade.

Key milestones

Several significant milestones highlight the evolution of IP protection in China:

• 1980: China became a member of the World Intellectual Property Organization (WIPO), signaling its commitment to aligning with international IP standards.
• 1982: The first comprehensive Patent Law was enacted, providing a legal foundation for patent protection and signaling a significant shift towards recognizing and safeguarding inventions and innovations.
• 1990: The introduction of the Trademark Law laid the groundwork for protecting brand identities, crucial for both domestic and foreign enterprises operating in China.
• 1991: The Copyright Law was established, extending protection to literary and artistic works, including computer software, thus encompassing a broad spectrum of creative outputs.
• 2001: China joined the World Trade Organization (WTO), necessitating compliance with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). This membership further integrated China into the global IP framework and underscored its commitment to strengthening IP laws and enforcement.
• 2008: The implementation of the National IP Strategy Outline marked a strategic shift, aiming to enhance IP creation, utilization, protection, and management.
• 2014: The first specialized IP court was established in Beijing, centralizing and improving the adjudication of IP disputes

2023 developments in China’s IP protection

The year 2023 was transformative for China’s IP landscape, marked by significant legislative and procedural advancements. Early in the year, the draft of the fifth amendment to the Trademark Law was released unexpectedly, while the year concluded with the State Council approving the third amendment to the Implementing Regulations of the Patent Law.

One major development was China’s accession to the Apostille Convention on March 8, 2023. This convention simplifies the process for foreign public documents to be recognized in China, eliminating the need for extensive notarization and legalization processes. This change, effective from November 7, 2023, significantly streamlined the legal processes for foreign litigants in China, reducing bureaucratic hurdles and fostering a more efficient legal environment. This benefits IP owners who seek to protect their IP in China, relieving their burden of legalizing identification and power of attoney (POA) documents for each administrative litigation filed against decisions made by the CNIPA.

Additionally, China National Intellectual Property Administration (CNIPA) introduced new regulations to suspend certain trademark review cases when outcomes depend on pending procedures. This regulation addresses long-standing inefficiencies where review procedures were often faster than the removal of conflicting “obstacles.”

The mandatory suspension in such cases is a notable improvement, reducing unnecessary legal procedures and associated costs for stakeholders.

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The Supreme People’s Court also adjusted its approach to retrials, establishing stricter criteria for retrial acceptance to manage the increasing volume of civil litigations. This move aims to focus retrials on cases with significant legal implications or nationwide impact, ensuring a more efficient judicial process. Moreover, the Supreme People’s Court’s IP Court’s jurisdiction has been refined to handle high-value IP disputes more effectively, reflecting the growing complexity and volume of such cases.

Overall, these recent developments underscore China’s commitment to enhancing its IP protection framework, aligning more closely with international standards, and addressing practical challenges faced by IP stakeholders. These changes not only foster a more robust IP environment but also enhance China’s attractiveness as a jurisdiction for international IP protection and enforcement.

Trends of IP filing and disputes resolution in China

Patent filings

Patent filing in China has seen significant growth, driven by the country’s emphasis on innovation and IP protection. China’s patent system, which includes invention patents, utility model patents, and design patents, has become one of the most dynamic in the world. The number of patent applications in China has surged, making it the global leader in patent filings.

This increase reflects China’s strategic focus on fostering technological advancement and attracting foreign investments. Notably, foreign companies are increasingly seeking patent protection in China to safeguard their innovations and gain competitive advantages in the rapidly growing Chinese market.

In 2023, China granted 921,000 invention patents, representing a 15.4 percent increase from the previous year. Additionally, 2.09 million utility model patents and 638,000 design patents were issued. The CNIPA resolved 65,000 patent reexamination cases and invalidated 7,700 patents. Furthermore, the CNIPA received 74,000 PCT international patent applications, while Chinese applicants filed 1,814 international design patent applications through the Hague System.

By the end of 2023, China had 4.991 million valid invention patents, with 11.8 high-value invention patents per 10,000 people. Excluding Hong Kong, Macao, and Taiwan, there were 4.015 million valid invention patents, reflecting a 22.4 percent increase and surpassing 4 million for the first time. Among these, 1.665 million were high-value invention patents, accounting for 41.5 percent of the total, which is an increase of 1.1 percent from the previous year.

The average examination period for invention patents has been reduced to 16 months, with a case closure accuracy rate of 94.2 percent.

In 2023, notable fields for PCT patent applications included:

• Computer technology;
• Telecommunications;
• Electrical machinery;
• Medical technology; and
• Pharmaceuticals.

These fields accounted for around 40 percent of all published applications. Electrical machinery and transport sectors witnessed the fastest growth among these top technology areas. Prominent companies like Huawei, Qualcomm, Samsung, Ericsson, and Nokia were active in filing numerous patents related to 5G and Wi-Fi technologies.

Meanwhile, in the automotive field, applications for exterior design patents highlight the competitive dynamics between foreign and Chinese applicants. Chinese automotive companies, including giants like BYD, Geely, and Great Wall Motors, have significantly increased their focus on securing exterior design patents in recent years. This trend aligns with China’s burgeoning automotive manufacturing sector and its drive towards innovation and IP protection.

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Meanwhile, foreign automotive companies such as Toyota, Volkswagen, and Ford also play a pivotal role in the landscape of exterior design patents in China. While these companies have a longstanding presence in the global automotive market, their patent application strategies in China reflect strategic adaptations to the local market dynamics and regulatory environment.

This dual approach—combining global design leadership with localized patent strategies—underscores the importance of China as a critical battleground for automotive innovation.

Trademark registrations

In 2023, China registered 4.383 million trademarks and reviewed 153,000 trademark opposition cases. Additionally, 373,000 trademark review cases were resolved, and Chinese applicants submitted 6,196 international trademark registration applications through the Madrid system. By the end of 2023, there were 46.146 million valid trademark registrations in China, with 44.047 million of these excluding Hong Kong, Macao, and Taiwan, reflecting an 8.4 percent year-on-year increase.

The average review period for trademark registration has stabilized at 4 months, and the overall trademark registration process takes about 7 months. In sampling surveys, the pass rates for trademark review, opposition, and evaluation all exceeded 97 percent.

The following analysis provides a snapshot of trademark application dynamics from key countries in 2023, highlighting notable trends, challenges, and strategic maneuvers in one of the world’s largest markets:

• United States: In 2023, despite the global economic uncertainties, the US remained the largest contributor to trademark applications entering China, accounting for 41.34 percent of all applications from major countries. This dominance reflects both the economic strength of US enterprises and ongoing trade dynamics with China. While overall applications decreased by nearly 10,000 compared to 2022, major brands like PepsiCo and Subway continued to lead in trademark filings, showcasing resilience amid challenging market conditions. Domestic agencies like Zhucheng maintained a significant share of US filings, underscoring their strategic advantage in the Chinese market.
• Japan: Japanese applications showed a declining trend, with notable brands like Toyota and Nintendo facing reduced filings. However, companies with strong IP portfolios such as Shueisha demonstrated robust trademark strategies, leveraging iconic brands like Dragon Ball and Naruto.
• South Korea: Known for its dynamic industries like healthcare and e-sports, South Korean applications varied across sectors, with leading agencies like Joochang capturing substantial review cases, particularly in post-approval phases.
• Germany: German filings in 2023 decreased by nearly 23 percent from the previous year, with ALDI maintaining top positions despite a significant drop in applications. The decline reflects broader challenges in the automotive and chemical sectors.
• France: The French cosmetics and fashion industries continued to thrive in Chinese markets, contrasting with industrial goods. Agencies like Wanhuatda played pivotal roles in representing French applicants, underscoring their leadership in trademark services.
• United Kingdom: In contrast to global trends, UK applications surged by nearly 17,000 cases in 2023, driven by companies like Lotus and Apollo Cars. This growth highlights increasing British interest in the Chinese market, supported by legal firms like Anli expanding their presence in mainland China.

Copyright filings

In 2023, China saw a significant surge in copyright filings, reaching 8,923,901, a substantial increase of 40.46 percent compared to 2022.

Regarding specific categories, registrations for artistic works dominated, comprising 3,296,437 filings (51.28 percent of total registrations), followed by photography with 2,501,968 filings (38.92 percent), textual works with 329,128 filings (5.12 percent), and audiovisual works with 118,544 filings (1.84 percent).

Notably, computer software copyright registrations reached 2,495,213, demonstrating a notable 35.95 percent year-on-year increase, with the majority concentrated in eastern regions accounting for 59 percent of total registrations.

The digital economy, particularly the internet and digital media, played a pivotal role in shaping China’s copyright landscape in 2023. The increase in digital content creation and dissemination necessitated robust copyright protection measures, evidenced by the significant rise in digital content registrations. Key cases in digital content protection underscored the importance of adapting copyright frameworks to the evolving digital landscape, ensuring comprehensive protection of creative outputs.

IP disputes and enforcement

In 2023, Chinese courts grappled with a significant influx of IP cases, totaling over 540,000 new filings. This surge reflects the country’s rapid technological advancements and increasing emphasis on protecting innovation.

The Supreme People’s Court has responded with robust measures to strengthen judicial protection across various sectors, including key technologies and emerging industries. Notably, punitive damages were applied in 319 IP infringement cases, amounting to RMB 1.16 billion (US$163 million). This approach aims not only to penalize violators but also to deter future misconduct, signaling a proactive stance against IP rights abuse.

Efforts have also targeted issues like malicious trademark registrations and infringement, addressing deceptive practices that undermine fair competition. Furthermore, courts have prioritized safeguarding new forms of IP, such as artificial intelligence and data property rights, aligning with China’s advancements in digital innovation.

Government campaigns and initiatives on China’s IP protection

In recent years, China has launched several significant initiatives in the field of IP protection. These actions encompass system development, enforcement efforts, public services, and international cooperation, forming a comprehensive and multi-layered intellectual property protection system.

Improvement of laws and regulations, and policy planning

In recent years, China has completed a new round of amendments to intellectual property laws, including the Trademark Law, Patent Law, and Copyright Law, establishing a high-standard punitive damages system recognized internationally.

Besides, in 2022, China further amended the Anti-Unfair Competition Law, primarily enhancing trade secret protection. This amendment broadened the definition of trade secrets to include additional commercial information and clarified what constitutes an infringement. It specified that any party involved in teaching, inducing, or assisting others in trade secret infringement would be liable.

The amendment also raised the statutory damages for infringement from RMB 3 million (US$ 412,512.90) to RMB 5 million (US$ 687,521.50) and shifted the burden of proof to the alleged infringer once the rights holder presented prima facie evidence of infringement.

Regulations such as the Detailed Rules for the Implementation of the Patent Law of the People’s Republic of China have been issued, focusing on curbing abnormal patent applications and illegal activities like obtaining patent fee reductions through false materials.

The Measures for the Protection of Geographical Indication Products and the Regulations on the Registration and Administration of Collective Trademarks and Certification Trademarks have been released to strengthen the protection and management of geographical indications.

China has also formulated the Outline for Building an Intellectual Property Powerhouse (2021-2035) and the 14th Five-Year Plan for National Intellectual Property Protection and Utilization, which clarify the goals and tasks for IP protection and utilization.

The 2024 Plan for Promoting the Construction of an Intellectual Property Powerhouse has been issued, outlining over 100 key tasks and measures in seven areas, including improving the IP system, strengthening IP protection, and enhancing the IP market operation mechanism.

Specialized IP courts and tribunals

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To strengthen IP protection enforcement, China established three specialized IP courts in Beijing, Shanghai, and Guangzhou at the end of 2014. These courts have jurisdiction over civil and administrative IP cases, improving the efficiency and consistency of IP-related judgments. The Beijing IP Court, for instance, has significantly increased the speed and quality of IP case adjudications. Between 2017 and 2019, China also established 18 specialized IP tribunals in various provinces.

These tribunals handle civil, administrative, and criminal IP cases, further centralizing and improving the adjudication of IP disputes. Both the specialized IP courts and tribunals feature highly qualified judges with extensive IP litigation experience.

Moreover, in 2019, China inaugurated an IP tribunal in the Supreme People’s Court. This tribunal has the highest authority over patent cases and other complex IP issues, centralizing second-instance judgments and promoting uniformity in the application of IP laws.

The tribunal is expected to enhance the quality and consistency of IP-related decisions, reduce local protectionism, and discourage forum-shopping. By consolidating the adjudication process, the tribunal also aims to shorten litigation periods and improve trial efficiency.

The creation of specialized courts and tribunals has streamlined IP case adjudication, improved the quality and consistency of decisions, and reduced local protectionism. These developments reflect China’s commitment to aligning its IP protection with international standards and fostering an environment conducive to innovation and foreign investment.

Crackdown of trademark squatting

In recent years, China has launched a series of special actions to combat trademark infringement, strengthen intellectual property protection, and maintain fair market competition and consumer rights. For example, the State Administration for Market Regulation (SAMR) has launched the “Iron Fist” campaign, which targets the counterfeiting of well-known brands and behaviors such as “riding on the coattails” of celebrities. This campaign leverages comprehensive coordination and efficient collaboration to continuously intensify intellectual property enforcement.

One notable case involved the Market Supervision Bureau of Jieyang City, Guangdong Province, which investigated and prosecuted a businessman for producing and selling watches that infringed on the exclusive rights of Rolex and Rado. The case involved a total amount of RMB 1.17 billion.

Additionally, SAMR has organized multiple nationwide activities to destroy counterfeit and pirated goods. Several provinces have simultaneously destroyed counterfeit and substandard products, covering various types and values, effectively deterring infringement and counterfeiting activities.

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