1. Evolution of the Chinese patent system and recent progress Dr. Mao Jinsheng Intellectual Property Development Research Center Of The State Intellectual Property Office Of The People’s Republic of China December 10 th, 2010

2. 2015-8-5 国家知识产权局 2 1. History of the Chinese IPR system 2. Current status of the Chinese patent system 3. Challenge 4. National IPR strategy Outline

3. 2015-8-5 国家知识产权局 3 1. History of the Chinese IPR system

4. 2015-8-5 国家知识产权局 4 1.1 Development history and status of the Chinese intellectual property system History - Before 1949 In 1989, the Qing dynasty issued patent law In 1904, the trademark law In 1910, the copyright law History - After 1949 Until 1978, basically a blank period 1979 – 1990, founding period 1990 – Present, development period

5. 2015-8-5 国家知识产权局 5 1.2 Laws and regulations governing intellectual property rights TitleTime passedTime issued Time of implementation 1Trademark law1982.8.231983.3.1 2Patent law1984.3.121985.4.1 3Copyright law1990.9.7 1991.6.1 4Regulation for protection of computer software1991.5.241991.6.41991.10.1 5Anti-trust law1993.9.21993.12.1 6 Regulation on administration of audio-visual products 1994.8.251994.10.1 7 Customs protection of intellectual property rights 1995.7.61995.10.1 8Protection of new varieties of plants1997.4.211997.10.1 9 Protection of integrated circuit layout designs regulation 2001.3.282001.4.22001.10.1 10Collective management of copyright regulations2004.12.222005.3.1 11 Administrative protection of copyright on the internet 2005.4.302005.5.30

6. 2015-8-5 国家知识产权局 6 Established a legal system for intellectual property rights suitable for Chinese environment and in accordance with international rules. Established a working system including administrative approval, promotion and training, intermediary services, academic research, etc. Established administrative and legal systems, with a parallel law enforcement system of intellectual property rights. In recent years, the number of the applications of Chinese trademarks, utility patent and design patent continue to be largest in the world, while the number of applications for invention patents is ranked fourth in the world. Status-Intellectual property system

7. 2015-8-5 国家知识产权局 7 1.3 Several amendments of the Chinese patent laws 1984.03 The Patent Law of the People's Republic of China (hereinafter “the Patent Law”) was promulgated on March 12, 1984, marking the foundation of a patent system in China. It went into force on April 1, 1985, opening a new chapter in the history of China's patent system. 1992.09 The Patent Law was first amended on September 4, 1992. This amendment brought expanded content, prolonged duration and strengthened the protection of patent rights. The amended Patent Law and its Implementing Regulations entered into effect on January 1, 1993. 2000.08 The Patent Law was amended for the second time in 2000 to make it in better conformity with the TRIPS Agreement of the WTO, laying an improved legal climate of patent for China's accession to the WTO. The amended Patent Law and its Implementing Regulations took effect on July 1, 2001.

8. 2015-8-5 国家知识产权局 8 1.3 Several amendments of the Chinese patent laws 2008.12 The Decision of the Standing Committee of the National People’s Congress on Amending the Patent Law of the People’s Republic of China was voted through at the 6th session of the 11th meeting of the NPC Standing Committee on 27 December of 2008. The revised Patent Law of the People’s Republic of China came into force as of October 1, 2009. The 3rd amendment to the Patent Law, featuring reinforcement of the legitimate rights and interests of both domestic and foreign applicants. 2010 Decision of the standing committee of the State Council on Amending the Implementing Regulations of the Patent Law of the People's Republic of China (Draft) was voted through on 30 December of 2009.The Draft improved the secrecy examination system of the invention-creation completed in China pursuing a overseas application, supplemented and detailed the patent application procedure and granting criteria, clarified the disclosure requirements for genetic resources information and the administrative punishment of patent infringement. The amended Implementing Regulations came into force as of 1 February of 2010.

9. 2015-8-5 国家知识产权局 9 2. Current status of the Chinese patent system

10. 2015-8-5 国家知识产权局 10 Three types of patents ： invention 、 utility model 、 design Five types of applicants: enterprises, universities, research institutions, associations, individual. Indicators include basic patent indicators, statistics and survey indicators and evaluation indicators. Basic patent indicators: number of applications, number of granted patents, number of owned patents Statistics and survey indicators: usage rate of patents, licensing rate etc. Evaluation indicators: competitiveness evaluation, management capability evaluation, quality of patent evaluation Indicators of China’s patens

11. 2015-8-5 国家知识产权局 11 2.1 Statistics of applications of the three patent types （ 1991-2009 ）

12. 2015-8-5 国家知识产权局 12 Distribution for domestic patent applications （ 1991-2009 ）

13. 2015-8-5 国家知识产权局 13 Application structure of the three patent types between (1985-2009)

14. 2015-8-5 国家知识产权局 14 申请与授权的时间间隔 between 1985 and 2009

15. 2015-8-5 国家知识产权局 15 Application structure of the three patent types between (1985-2009)

16. 2015-8-5 国家知识产权局 16 2.2 Statistics of granted patents between (1991-2009)

17. 2015-8-5 国家知识产权局 17 2.3 Statistics of patent in force(2006-2009)

18. 2015-8-5 国家知识产权局 18 2.4 Statistics of PCT applications between (1994-2009)

19. 2015-8-5 国家知识产权局 19 2.5 Percentage of multi-party applications (1998-2009)

20. 2015-8-5 国家知识产权局 20 2.6 Patent concentration (1985-2009)

21. 2015-8-5 国家知识产权局 21 3. Economic development in China and challenges of patents

22. 2015-8-5 国家知识产权局 22 3.1 Strengthen competitiveness: The challenges that China is facing Intellectual property rights have wealth, commodity and high added value characteristics in market economy. Intellectual property rights are an essential means of market competition, a foundation and criteria for establishment of an innovative nation.

23. 2015-8-5 国家知识产权局 23 Curve of changes in added values during product marketing

24. 2015-8-5 国家知识产权局 24 Internal needs- Significance of intellectual property in development of China Knowledge with intellectual property constitutes the most important production factors and wealth resources. Intellectual property rights are a powerful tool in knowledge economy and international competition.

25. 2015-8-5 国家知识产权局 25 3.2 The Chinese intellectual property system faces multiple challenges Foreign firms apply for a large number of patents and register lots of trademarks. Foreign firms are with more abundant experience of IRP management and greater strengths in the competition, compared with domestic firms. Foreign patent applications are mainly for invention patents. Foreign patent applications are mainly in high-tech sectors. Foreign patents are likely to be renewed and protected for a longer period.

26. 2015-8-5 国家知识产权局 26 Survey on top 500 Chinese enterprises shows: there were 50% enterprises experienced intellectual property disputes. The numbers of disputes were significant when compared to the limited numbers of independent intellectual property rights. Although Chinese total trade volume is the third in the world, only 2% of total exports are independent innovative high-tech products. Only several thousand domestic firms in China owned indigenous IPR, accounting for 0.03% of total domestic firms. 99% of firms have never applied for patents. Only 40% of firms have own trademarks. A lot of companies manufacture but do not innovate, have property but no intellectual property, even rely on copying to survive.

27. 2015-8-5 国家知识产权局 27 Categories with the most domestic invention patent application fields are: Domestic Ratio of individual applications Traditional Chinese medicine 中药 98%83% Non-alcohol (soft) drinks 非酒 ( 软 ) 饮料 96% 67% Food 食品 90% 77% (Chinese) input method ( 中文 ) 输入法 79%84% Sewerage processing 污水处理 73%53% Special ceramics 特种陶瓷 64%32% 3.3 Qualitative analysis Domestic invention patent applications are concentrated in some technical fields

28. 2015-8-5 国家知识产权局 28 International invention patent applications in China are concentrated in high-tech fields Ratio of international applications Wireless Transmission93% Mobile communication91% Television system90% Transmission equipment89% Semiconductor85% Television parts85% Genetic engineering75% Western medicine69%

29. 2015-8-5 国家知识产权局 29 Longer duration of international patent protection Numbers of invention Numbers of patent applications(1985)patents expired(2000) Total 8000 1200 Domestic 400050% 957.9% International400050% 110592.1% Average duration of domestic patents Invention patents: 5-6 years, utiity patents 3-4 years Protection periods for the first batch of domestic invention patents expired (Note: Protection period was 15 years before patent law revision)

30. 2015-8-5 国家知识产权局 30 Distributions for Patent Applications from Domestic and foreign (2008)

31. 2015-8-5 国家知识产权局 31 Invention Patent Applications and Grants from Domestic and Foreign (Accumulated)

32. 2015-8-5 国家知识产权局 32 Valid patents owned by domestic organizations : a not-so-rosy picture Number of valid patents is few-less then 25% of total applications Share of valid invention patents is low-accounted for 13.8% of the total Renewed period of patent is short-invention patents renewed up to 10 years accounted for 4.8% of valid patents (corresponding figure for the patents granted to foreign applicants is 24.9%); utility patents renewed up to 5 years accounted for 15.4% of the total; design patents renewed up to 5 years accounted for 10.1% of the total.

33. 2015-8-5 国家知识产权局 33 Few patent applications by the Chinese companies in foreign patent offices Till 1999 average less then 300 applications each year 2000 1026 applications 2007 Less than 10,000 applications Patent applications in foreign patent office per million habitants in China is less than 5, but in developed countries are over 50.

34. 2015-8-5 国家知识产权局 34 4. National IPR strategy

35. 2015-8-5 国家知识产权局 35 4.1 Internal needs- Intellectual property rights and innovation-oriented country Innovation- oriented country Knowledge economy predominates and independent innovation becomes the major driving power and resources for economic and social development Knowledge economy Production factors is primarily composed of knowledge capital supported by other factors. Knowledge capital +Human capital Knowledge wealth +Non-material cultural heritage, standards, business models, outdated intellectual property rights. Intellectual property National core competitiveness

36. 2015-8-5 国家知识产权局 36 Internal needs- Significance of intellectual property system in development of China An institutional assurance for overall economic and social development Primary goal and resources for independent innovation A natural choice for establishment of an innovation- oriented country

37. 2015-8-5 国家知识产权局 37 4.2 Guideline of the strategy Strengthening construction of Chinese intellectual property system, and greatly increasing abilities of creation, administration, protection and application of the intellectual property rights are urgent demands for, – Improving independent innovation ability and construction of a innovation-oriented nation, – Perfection of socialist market economic system, standardization of market order and construction of trustworthy society, – Strengthening corporate market competitiveness and national core competitiveness, – Expansion of opening to the outside world and accomplishment of mutual benefits and wins.

38. 2015-8-5 国家知识产权局 38  1 Preface – Necessity, background, challenges and opportunities  1 Guiding Principle  2 Strategic Goals: the next 5 years; by 2020  5 Strategic focuses: improving the IP regime, promoting the creation and utilization, strengthening IPRs protection, prevent abuse of IPRs, and fostering a culture of IPRs  7 specific tasks: patent, trademark, copyright, trade secret, new plant varieties, IP in specific areas, IPRs related to national defense 4.3 Main contents of the strategy——“112 579”

39. 4.3 Main contents of the strategy——“112 579” (continue)  9 strategic measures:  1.Increasing the capacity to create intellectual property  2.Encouraging the commercialization and utilization of IPRs  3. Expediting the development of the legal system for intellectual property  4. Improving intellectual property law enforcement  5.Strengthening the administration of intellectual property  6. Developing intermediary services for IPRs  7.Developing Intellectual Property Human Resources  Promoting the cultivation of an intellectual property culture  9.Expanding international exchanges and cooperation in intellectual property 2015-8-5 国家知识产权局 39

40. 2015-8-5 国家知识产权局 40 4.4 Plans to Promote IP Strategy On 26 March 2010, the Plans to Promote the National Intellectual Property Strategy Implementation was released. The principal tasks of 2010 IP Strategy implementation are as follows: fully implement the requirements of the Outline of National IP Strategy, encourage IP creation and utilization, enhance IP protection in accordance with the law, consolidate the basis of IP Strategy implementation, promote IP Strategy for more effective implementation, strengthen IPR ’ role in improving the transformation of the economic development modes and economic structural adjustment.

41. 2015-8-5 国家知识产权局 41 Welcome to visit Intellectual Property Development Research Center of SIPO Thank You ！