1. A Renaissance of Innovation and IP? Myths, Ironies, Threats, & Opportunity from China Jeff Lindsay Head of IP Asia Pulp & Paper Shanghai, China

2. IP in China: Downplayed by the West Western stereotype: China a great copier (or thief), but not an innovator. Western stereotype: Chinese IP can’t be taken seriously. E.g., the 2011 Thompson Reuters Top 100 Global Innovators (based on international patent activity, 2008-2010) –Naturally, Apple was on the list. –Tiny Liechtenstein made the list. –But ZERO top innovators came from China, Taiwan and Hong Kong. http://top100innovators.com/

3. Even though….. Foxconn/Honhai Precision (Taiwan): –is the “silent” innovation partner for Apple and other companies on the list –Has 3 x as many US patents as Apple –has 50 times as many US patents as some companies on the TR 100 list Lenovo and Huawei are also major international filers with huge estates Invisible innovation? Invisible IP? In fairness, I contacted the publisher…. Details: http://tinyurl.com/jefflindsay9

4. The Renaissance of IP in China China had no IP system or IP laws until 1984, but has rapidly evolved since then Now China leads the world in patent filings Two Chinese companies are in the world’s top 5 international patent filers for 2011 Many in the West are unprepared for the opportunities China’s IP boom will create. See WIPO stats on China at http://tinyurl.com/jefflindsay18 Also see http://tinyurl.com/jefflindsay13, tinyurl.com/jefflindsay14, tinyurl.com/jefflindsay16, tinyurl.com/jefflindsay19

5. The Emergence of IP in China Dr. Gao Lulin, Founder of China’s IP System

6. EPO.org at http://tinyurl.com/jefflindsay17

8. PCT Apps: #4 in the World http://www.globalpost.com/dispatch/ne ws/afp/130319/global-patent-filings- rose-66-2012-wipo #10 #4 #5 almost #3 #16 #22

9. Scientific Publications World Bank reports that Chinese technical publications soared from 20,000 in 1998 to 112,000 in 2008 -- 8.5 percent of global output. China is now #2 in the world for scientific publications. Be patient. That will change. Source: http://tinyurl.com/jeffiri6

10. Chinese IP Myths No real innovation IP just low quality junk International patents reveal China isn’t serious about IP Enforcement is a joke There are no secrets in China, and certainly no useful trade secret protection China is all about IP theft, not creation and protection

11. My Observations Innovation: –looks different than in the West, but occurs in many forms –Chinese employees can be as creative and innovative as Western employees –cultural differences often need to be addressed

12. My Observations IP quality: –yes, often lacking, but rapidly improving –China is strengthening its law, its courts, and its training of examiners –Chinese companies are strengthening their systems and their patent drafting –But many companies still fear patenting key technologies and rely too much on trade secrets

13. My Observations International patents: –2 of the top 5 filers are Chinese companies –China will soon lead the world

14. My Observations Enforcement : –Difficult, but can work. Western companies can prevail over local infringers. –IP litigation is exploding in China. Up 46% in 2012, with 87,419 civil IP cases accepted. –Penalties are still arguably too weak. –Lack of discovery is a barrier. Guanxi, etc. can be barriers. –The proposed 4 th Amendment may greatly strengthen enforcement by adding discovery, tougher penalties, etc. Chinese details: http://tinyurl.com/jefflindsay10 English chart: http://tinyurl.com/jefflindsay11 Commentary: http://tinyurl.com/jefflindsay20 tinyurl.com/jefflindsay12

15. Trade Secrets Chinese trade secret law is very similar to US law, and is a strength of China’s IP system Enforcement is happening with serious penalties Burdens of proof can still be difficult Companies must take proactive steps to identify and protect trade secrets

16. Other Concerns Enforcement requires patience, experience, and guanxi. Challenging. Corruption is being fought but remains serious, including at the academic level where students learn the wrong lessons. It is nearly impossible to buy legitimate movie DVDs in China. Social acceptance of copyright theft is pervasive. This may hinder general respect for IP.

17. Bottom Line IP theft is still a serious problem. But China is rapidly and deliberately transforming from “cheaply copied in China” to “improved, designed, or invented in China.” While the West downplays China IP and innovation, China is returning to its historic role as a global leader. See also the World Bank Report, China 2030: http://tinyurl.com/jefflindsay21

18. 谢谢 ! (Thanks!) Jeff_Lindsay@app.com.cn LinkedIn.com/in/jefflindsay