Being attracted by China was easy: Coming to Taiwan as a young student to study the language for a year in 1993 almost inevitably led to my desire to continue to work building bridges and striving to understand foreign cultures. The Chinese culture with its deep historical roots is probably the biggest challenge to accept for a Westerner, which is why it was tempting – and rewarding – to accept it.

Like many others of my colleagues who live and work in or with China, the multi-facets of this country keep me energized, fascinated, and very often puzzled. As a lawyer, the evolvement of the legal environment at breathtaking speed, alongside with the social development inside the country, is a life-time opportunity to see. It allows me to experience a “sleeping giant waking up”, as Napoleon Bonaparte phrased it once.

I had a great time in Taibe with wonderful teachers – many of them long in retirement age, but with a mind so young, sharp and vivid that I felt this was indeed owed to their living style and culture.

After I had come to China as student several times and did some research at the Max-Planck-Institute in Munich and Beijing University to complete a comparative study on private international law and IPRs for my PhD, I started working as attorney in the representative office in Shanghai of a Hamburg-based German law firm in 2003. One must remember that at that time China had already acceded to the WTO for almost two years, and already had revised all main IP laws in the years 2000 and 2001. Many changes were introduced, modernising the laws to a degree at par with Western legislation levels.

As a lawyer I had specialized in Intellectual Property, yet in the beginning obviously also had to tackle tasks in other areas like labour, company and even to some extent banking law. But it is well-known phenomenon among lawyers: Once you start with intellectual property, you usually stick with it. Many clients had issues with IP in China of course. It almost automatically led to me coming back to my roots.

As I engaged with the European Chamber of Commerce as the Chairman of the IP Working Group, I became increasingly involved with the European Commission and the European Patent Office. Working with a government is a challenging and extremely interesting job. After three years I switched my position in 2006 and became the new IP Officer of the Delegation of the European Commission to China, seconded by the European Patent Office which has a long and fruitful history of cooperation and assisting China in the area of IP, in particular patents.

In this position my work has dramatically changed: The pure case-handling has been exchanged with more strategic and long-term related tasks, such as cooperation and assistance to the rapid build-up of the Chinese IP system. My experience out of practice is of tremendous help to this end. Still, I feel that every day I can learn something new, as there is to my view no IP system in the world which develops as rapidly as in China.

Compare with the advanced IPR protection countries, China’s IPR has its own particularities.

One outstanding particularity of China’s IPR is the incredible speed of catching-up and adaptation of China’s IPR system.

I hope that China’s IPR system in the future may not have too many particularities compared to other countries. The simple reason for such a wish is that the international treaties such as Paris Convention, TRIPS and others actually try to create a level of world-wide harmonization. In a global world, having one platform almost equal everywhere on the globe is what industry really needs to have a predictable legal and economic environment and create innovations for the benefit of the respective economies. Of course, the road towards this goal is long and the devil lies in the detail. Thus each country has its own set of individual rules and specialties.

In China, one peculiarity definitely lies in the profound differing view of IPR often seen not only as a private right, but also as a public one. This view is expressed for example in the Article 40 of the Trademark Law with the reference that the trademark owner must monitor the quality of goods and services offered by a licensee. This creates a much stronger focus of “administration of IPRs” – an element now also strongly emphasized in China’s National IP Strategy, which to foreign eyes may be interpreted as carrying a heavy element of government intervention on private contracts. The understanding that IPRs although intangible are private property rights is still often disputed, and one can feel this conflict of the understanding when trying to enforce IPRs: If the enforcement is deemed to have an impact on local social conditions, respect and implementation of the law may be replaced by other considerations. These may sometimes be valid, but indeed often they are not. In the latter case we call it local protectionism.

Another peculiar difference to Western systems lies in the sometimes still quite different function of the courts. Their role at times can be perceived weaker compared to the administrative authorities in China. Civil courts will not order administrative agency for example to execute an assignment of a squatted trademark to the rightful owner. Civil courts in China thus do not enjoy a jurisdiction over administrative authorities –a typical Chinese distinction made between administrative and judicial competence. There are many agencies, administrative and judicial, which each work alongside of each other as regards IPR, but without one agency able to order another to remedy a situation in accordance with the law. This structure therefore requires much more intra-agency intervention and arbitration.

Linked to this is the general IP structure for granting and enforcing IPRs in China: The system of “dual enforcement” is often praised by Chinese authorities as their peculiarity. It is indeed born out of a different structure of the Chinese government and state compared to Western countries. Throughout the history of China the officials of the state administration have played a key role of administering the country. It is only recently that a concept of “rule of law” in a sense somewhat more akin to Montesquieu has been considered in China as an alternative, or to be more precise, as a possible road of development both for administrative and judicial authorities. Checks and balances by independent judicial powers are the essential elements in Western system; they determine the quality and reliability of the IPR system. China has different historical and political considerations to take into account, and currently still walks a different path from this idea of an independent judiciary, able to order state administrations and uphold the law as it is written. Having said that, I am confident that China will find her own way towards a fair, reliable, efficient and socially just system in the future.

There are many IPR protection changes in China. In the first place, the major change in recent history of China as regards IPR protection is the new perception and attention by Chinese leadership to IPR in general. I personally pay much tribute to the former Vice-Premier Wu Yi for her key role for this change to happen. It has elevated the problems and opportunities of IPR protection to a national level, allowing also local government levels to obtain a clear signal to engage on this important topic. It will ultimately strengthen China’s competitiveness and will help integrating Chinese companies into world trade of value-added products and services.

The second most important change born out of this fundamental decision is the National IP Strategy. It is the symbol and work result of the State Council’s and more importantly Chinese Communist Party’s changed attitude. The National IP Strategy creates the roadmap on what China will do up to the year 2020. All agencies, the judiciary and party officials as leaders of the state will follow its objectives. Stepping outside of the scope of the strategy will be very difficult indeed, a fact that must be taken into account also by trading partners of China.

The third important change is linked to the National IP Strategy: The decision to strengthen the courts as regards IP enforcement. One must keep in mind that IPRs are private rights! Enforcing them in principle also means it should be done by the right owners. The huge number of patents and trademarks filed and granted in China during the past five years indicates that the number of disputes will increase. Administrative authorities are likely to have difficulties of keeping up – both in terms of resources and technical understanding of the legal issues involved. China has to and will develop further its platforms of dispute resolution. In my view, the primary platform will be the courts in the case of infringement, not administrative authorities.

Finally, the political decision to invest into technology and enhance domestic innovation will have substantial impact on the industrial development of China, and thus on IPRs as well. The perception of IPRs has changed from a mainly foreign-owned right to a business tool open to everyone, rewarding and supporting innovation and competitiveness. While there are very serious concerns that attraction of technology and know-how may be too heavily government-led with a sometimes even coercive element, the general principle of relying on modern technology and building up its creation and application throughout the country will change the respect and support for IPRs in China. As a result I believe that China in the not so far future will become one of the world-wide strongest IP-based economies.

In China, the most urgent problem is real access to the system and actual enforcement.

Access to the system most importantly allows any applicant to successfully lodge his applications with the relevant enforcement agencies. Ideally, this process is automatic and governed by objective and clear rules in the law. The discretion of agencies and courts whether or not to deal with a case is actually in my view one of the biggest stumbling blocks to an efficient rule of law. Too much discretion can foster corruption, which is recognized to be the most serious threat to more IPR protection and a harmonious society.

Real access to the system also lowers to the extent possible unnecessary and outdated formality requirements. Notarization and legalization of Powers of Attorneys and of evidence – even where readily available, such as on the Internet – creates a lot of red tape and add costs for using the system, but do not add any legal value. True access to the system avoids a ping-pong game between different government agencies to guarantee that a complaint is really dealt with, rather than put off. Access also takes into account the financial burden to use the system: SMEs should be able to use the system in spite of high costs for evidence collection and investigation. Currently there is no full reimbursement of the real investigation costs and lawyers’ fees paid, even if a case is fully won.

Enforcement requires first obtaining decisions which create deterrence against further infringements. Obtaining evidence is the key obstacle to more efficient enforcement in China: An instrument like the “saisie contrefacon” in France which is also enshrined in Article 7 of the EU Enforcement Directive may be highly suitable solutions. Higher damages awards and criminal sentences to be served are needed to act as strong disincentives to continue serious infringing acts. Even more importantly, the actual implementation of a judgement or an administrative order must be substantially strengthened: Evading a judgment by changing a company name, hiding bank accounts or disobeying court orders for example require much more stringent measures by the government than currently employed.

A relationship with China once started always carries on. No matter what the future brings, I will not leave this beautiful country. I believe I certainly will continue to work with China.

About the author:

Thomas Pattloch is the IP Officer of EU Delegation in Beijing.