Over the past year, the Chinese government has introduced several legislative changes to improve protection and enforcement of intellectual property (IP) rights. While several looked promising on paper, long-standing structural challenges within the system are preventing China from creating a fair and predictable IP environment. In a recent roundtable with the US Patent and Trademark Office, IP experts and lawyers shared the following about their experiences with the newly revised system:

On Sunday, the General Office of the Chinese Communist Party (CCP) and the State Council released guidelines for China to strengthen the protection and enforcement of intellectual property (IP) rights in the next few years. While the timeline of the “phase one” deal is unclear, China’s announcement indicates a top-level consensus within the Chinese government to make further progress on IP, partially for domestic reasons. Given that the guidelines call for a larger role for the National People’s Congress in protecting and enforcing IP rights, a series of legislative updates are likely to be released by 2022 to implement the reform measures mentioned.

With an agreement “in principle” reached earlier this month, both the US and Chinese governments are sending positive signals as they work through the details of a “phase one” agreement. While the 20-point policy document on reforms and market opening published just a few weeks later by China’s State Council mostly rehashed previous commitments, it provides an encouraging sign of China’s will to move forward with reforms related to US demands.

In less than a month, the World Trade Organization (WTO) dispute settlement mechanism will effectively cease to function, with potentially severe implications for the multilateral trading system. On December 10, the terms of two of the three remaining judges will expire, leaving the panel without a quorum to hear or decide cases, unless the United States changes its position and allows for more judges to be appointed. A recent WTO ruling in favor of China underscores many of the United States’s core issues with the dispute settlement system, making it all the less likely that the United States will reverse its position any time soon.  

On October 14, the Chinese Ministry of Justice (MOJ) shared with the US-China Business Council (USCBC) an advanced copy of its draft implementing regulations for the Foreign Investment Law (FIL). The public comment period began on November 1. The FIL was passed into law in March 15 of this year, and is scheduled to go into effect January 1, 2020. In anticipation of implementing regulations, USCBC in May submitted recommendations as to what the regulations should include, several of which were incorporated into the advance copy.

Following the release of the draft implementing regulations for the Foreign Investment Law (FIL) by the Ministry of Justice on November 1, the Chinese government has released more documents further clarifying and implementing two components of the FIL. Last Friday, the Ministry of Commerce (MOFCOM) released two draft measures on the information reporting system for the FIL for public comment.

Recent comments by the Chinese and US governments indicate that both sides are preparing for the announcement of a “phase one” agreement by mid-November. The outlines of the agreement are clear: the Chinese side will push forward commitments on intellectual property rights (IPR), financial services market access, agricultural purchases, agreement to not manipulate exchange rates, and promises not to engage in forced technology transfer.