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China Law 2010. Stepped Up IP Enforcement Is The Sixth Trend.

By Dan Harris and Steve Dickinson

Damn. I just knew it. I knew there would be no way I (or any lawyer on any subject) would be willing to stay confined to just five. Let me explain. As 2009 was drawing to its close, I wrote a post for Shanghaiist, entitled, "Dan Harris: China?s top 5 business law trends of 2010" I talked about visas, company formation, labor law, monopoly enforcement, and taxes. I did not say a word about intellectual property enforcement getting better in China, and mostly that was because such enforcement has been steadily getting better for years. Way back in 2006, we said that "the more the Chinese courts and officials come to realize IP enforcement is in China's long term business interests, the greater the enforcement." Over the last few months, there has been an increasing drumbeat of comments from Chinese government officials on the need for innovation within China and for the need for protection of innovation. That drumbeat became a shout (I know I am mixing metaphors) last month when President Hu Jintao stressed the value of intellectual property rights for Chinese companies:

Nowadays, the competition in information technology is extremely fierce. I hope you, as a software company, will treasure technological innovation as your life. You need to own intellectual property rights for your products. I hope you will be pioneers in the development of our country's software industry.

The President's comment was then posted on the Ministry of Commerce Intellectual Property website, as part of an article, entitled, "President Hu stresses importance of technological innovation in Zhuhai." (h/t IP Dragon) On a somewhat related front, I wrote a few weeks ago how my firm had been seeing a huge increase in matters involving American and European companies seeking to license their technology to Chinese companies. The Chinese government is very explicitly telling Chinese companies to step up their technology and to improve their quality and to secure foreign technologies wherever necessary. This has led Chinese companies to technology licensing agreements from Western companies in numbers I have never seen before. The Chinese government knows that for technology licensing agreements to have premium value to Chinese companies that enter into them, there must be adequate enforcement of intellectual property rights in China. Everything I have seen over the last six months or so tells me that IP enforcement in China is rapidly improving and will continue to do so. You will, no doubt, still be able to buy fake DVDs and software on the street, but I expect enforcement of patent and trademark rights to continue stiffening. This is the sixth trend and I should have caught it. What are you seeing out there?

Full post as published by China Law Blog on January 06, 2010 (boomark / email).