Civil Code to help pro­tect in­tel­lec­tual prop­erty

China Daily (Hong Kong) - - IP - By YUAN SHENGGAO

Its phi­los­o­phy and prin­ci­ples pen­e­trate ev­ery rule in re­lated acts, says pro­fes­sor

The Civil Code, which is sched­uled to come into force in Jan­uary 2021, will ex­ert much in­flu­ence on China’s in­tel­lec­tual prop­erty le­gal sys­tem, ac­cord­ing to ex­perts.

The new code, which was passed by the Na­tional Peo­ple’s Congress in May, is a cod­i­fi­ca­tion of civil statutes. It com­prises 1,260 ar­ti­cles, more than 50 of them re­lated to IP, China In­tel­lec­tual Prop­erty News quoted Tao Xin­liang, hon­orary dean of the School of In­tel­lec­tual Prop­erty at Dalian Uni­ver­sity of Tech­nol­ogy, as say­ing.

“It will be of great sig­nif­i­cance to en­hanc­ing IP pro­tec­tion, sup­port­ing IP uti­liza­tion and pro­mot­ing con­tin­u­ous im­prove­ments to re­lated laws and reg­u­la­tions,” Tao said.

Liu Chuntian, a law pro­fes­sor at Ren­min Uni­ver­sity of China, told the Bei­jing-based news­pa­per that the Civil Code will have a “fun­da­men­tal, sys­tem­atic and de­ci­sive role” in China’s IP le­gal sys­tem. Its phi­los­o­phy and prin­ci­ples pen­e­trate ev­ery rule in re­lated acts and pro­vide guid­ance for them, he added.

Ac­cord­ing to the code, the IP spec­trum in­cludes copy­right works; patented in­ven­tions, util­ity mod­els and in­dus­trial de­signs; trade­marks; ge­o­graph­i­cal in­di­ca­tions; trade se­crets; in­te­grated cir­cuit de­signs; and new plant va­ri­eties.

As the code makes the IP types clear, Tao pre­dicts a rise in le­gal dis­putes cen­ter­ing on trade se­crets and heated de­bate on whether leg­is­la­tors need to roll out a sep­a­rate act for that.

Cur­rently, the Anti-Un­fair Com­pe­ti­tion Law ap­plies to le­gal wran­gles over trade se­crets, which are be­com­ing an in­creas­ingly im­por­tant means of pro­tec­tion in the busi­ness com­mu­nity.

Liu cited semi­con­duc­tor man­u­fac­turer TSMC as an ex­am­ple. At the Tai­wan-head­quar­tered com­pany, more than 90 per­cent of its tech­nolo­gies are pro­tected as trade se­crets, he said.

Lyu Wei, for­mer head of the in­no­va­tive developmen­t depart­ment at the Developmen­t Re­search Center of the State Coun­cil, told China Eco­nomic Times that a sur­vey among do­mes­tic man­u­fac­tur­ers showed trade se­crets rank high­est among var­i­ous tools for IP pro­tec­tion.

With the pop­u­lar­ity of new tech­nolo­gies, such as cloud stor­age, big data and ar­ti­fi­cial in­tel­li­gence, grow­ing in­fringe­ments on trade se­crets are gain­ing more at­ten­tion, Lyu said.

The bat­tle against such vi­o­la­tions is also a fre­quent is­sue in in­ter­na­tional trade talks among coun­tries. It in­di­cates the key role in im­prov­ing a re­lated pro­tec­tion sys­tem for global com­pe­ti­tion, she said.

Liu said a mar­ket econ­omy is a com­plex sys­tem so its developmen­t re­quires a so­phis­ti­cated and elab­o­rate civil law scheme.

Mar­ket com­pe­ti­tion is es­sen­tially a race for tech­nol­ogy and IP, he said. “To en­sure the mo­ti­va­tion for in­no­va­tion, suf­fi­cient and ef­fec­tive IP pro­tec­tion is a must.”

The coun­try’s stance on the is­sue can be re­flected by the pro­vi­sion of puni­tive dam­ages in the Civil Code, which is ex­pected to fur­ther deter IP in­fringe­ments, ac­cord­ing to Tao.

As higher-level norms ex­ist in the le­gal sys­tem of civil rights, the code will come in or­der of prece­dence. Thus subor­di­nate laws, in­clud­ing those fo­cused on patents and copy­rights, which are be­ing amended, will be adapted to it, with an ad­di­tion of puni­tive dam­ages-re­lated con­tent, Tao said.

Tar­get­ing se­vere IP in­fringe­ments, puni­tive dam­ages were in­cluded in the 2013 re­vi­sion of the Trade­mark Law and the 2019 An­tiUn­fair Com­pe­ti­tion Law.

“It is en­vi­sioned that a new wave of puni­tive dam­ages will be granted in court after the Civil Code takes ef­fect,” Tao said.

In ad­di­tion, Tao said the pro­vi­sions for tech­no­log­i­cal con­tracts in the code will help to stan­dard­ize li­cens­ing deals and en­cour­age IP com­mer­cial­iza­tion and in­dus­tri­al­iza­tion.

Be­fore the code was pre­sented to the congress for ap­proval, academia had been di­vided over whether IP should take up a sec­tion of the land­mark leg­is­la­tion.

As it turned out, IP-re­lated pro­vi­sions are scat­tered through­out the code rather than be­ing a ded­i­cated sec­tion.

IP leg­is­la­tion in China in­volves both civil rights and ad­min­is­tra­tive man­age­ment. In con­trast, the Civil Code is de­signed to gov­ern the re­la­tions of civil sub­jects on an equal foot­ing. There­fore, it is hard for the code to in­cor­po­rate ad­min­is­tra­tive man­age­ment, said Shen Chun­yao, head of the Leg­isla­tive Af­fairs Com­mis­sion of the NPC Stand­ing Com­mit­tee.

Also, it is hard to gen­er­al­ize about com­mon prin­ci­ples from a va­ri­ety of IP statutes each with dis­tinct fea­tures, Shen added.

An­other rea­son that IP is de­nied a ded­i­cated sec­tion of the code is that its leg­is­la­tion and en­force­ment have to be ad­justed fre­quently in tune with rapid tech­no­log­i­cal progress.

Such fre­quent amend­ments would make the mas­sive code hard to re­main con­sis­tent and sta­ble, Shen said.

How­ever, some ex­perts are ex­pect­ing fu­ture changes in the struc­ture of the code.

Tao said the cur­rent struc­ture will likely leave space for amend­ments to the code in the fu­ture.

Wu Han­dong, a se­nior IP expert, told China In­tel­lec­tual Prop­erty News: “The sys­tem­ati­za­tion and cod­i­fi­ca­tion of China’s IP le­gal sys­tem still has a long way to go.”

He said schol­ars will ex­plore a char­ter for IP leg­is­la­tion, ei­ther in the form of an added sec­tion to the Civil Code, or as a sep­a­rate IP code.

The sys­tem­ati­za­tion and cod­i­fi­ca­tion of China’s IP le­gal sys­tem still has a long way to go.” Wu Han­dong, a se­nior IP expert

YAO FENG / FOR CHINA DAILY

Cus­toms of­fi­cials de­stroy a ship­ment of coun­ter­feit items that in­fringed on well-known in­ter­na­tional trade­marks in June. The seizure in­cluded sun­glasses, irons and blenders.

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