Having been friends for the past several years, they invited me to dinner. Both Mr. Huang and Mr. Jiang celebrated their promotion several months earlier, but they were assigned to different sections. Mr. Huang’s section was in charge of, in his words, the development of the patent industry while Mr. Jiang’s section was in charge of overseeing the enforcement of patent laws. I was invited to the guest seat of the dinner table. Mr. Jiang insisted that Mr. Huang should sit at the seat facing the door, known as the “upper seat.” Out of Chinese modesty, Mr. Huang declined. But Mr. Jiang replied, “Of course you should sit at the upper seat. You are our real boss!” Eventually, Mr. Huang took the upper seat. A fine dinner started. In Chinese culture, the dinner table is an important place for people to discuss business matters. The order of the seats at the dinner table is an important indication of the bureaucratic hierarchy.4 After drinking wine, Mr. Jiang told me half-jokingly, “Did you ask under what conditions effective patent enforcement would happen? How come you smart scholars just like to pose stupid questions? You scholars just view things differently from us. It all depends on our boss.” He pointed to Mr. Huang and said, “If our boss wants us to enforce the case in an effective way, that case will be an effective one.”5
Mr. Jiang had a lot of wine during dinner, but his comment should not be interpreted as due to the wine. His comment indicated that the Chinese government does not protect intellectual property rights for their own sake. Rather, the Chinese government’s ultimate goal of IPR work is to build its own IPR industry. IPR protection is not an end in itself. An IPR scholar from the Chinese Academy of Social Sciences (CASS) explained the policy arrangement in a more explicit way. According to him,
When people talk about IPR, the first thing that comes in mind is how many counterfeit products are seized and how many IPR infringers are brought to justice. But shouldn’t we also think about the nonobvious aspects of IPR work? In fact, our work consists of IPR creation, application, protection, and management. IPR protection is only part of that broader scheme, with the other aspects constituting the foundation of IPR activities. If the economic rationale behind IPR theft remains unchanged, we can only expect IPR infringement to happen constantly—no matter how serious we are about IPR protection.6
This chapter explores the relationship between patent enforcement and other aspects of, in the patent officials’ words, “Chinese patent work,” with an emphasis on the mechanisms to bring about effective patent enforcement. I argue that patent enforcement should be understood as occurring at the interface between the Chinese state and societal actors. An overemphasis of one side and ignorance of the other will at best yield an incomplete understanding of the entire picture. As a developing country, China pursues dual goals in implementing its patent policy: (1) upgrading the country’s industrial competitiveness through the development of the patent industry and (2) protecting patent holders’ interests by punishing patent infringement. The second goal serves the first goal. The more patent protection is believed to serve the overall agenda of “patent work” and help to promote economic development, the more likely effective enforcement will occur. Otherwise, patent enforcement will yield at best a lukewarm result.
This chapter is organized as follows: the first section discusses the implementation of China’s patent policy on the state side—namely, IPR special tribunals and IPOs at various levels. On the basis of analysis by other scholars, I argue that enforcing patent laws is only part of the responsibility of the Chinese patent bureaucracy. Equally, if not more, important is to establish a policy environment conducive to supporting the creation of high-quality patents and apply those patents to benefit the market. The second section discusses the uneven results of Chinese patent policy on various Chinese business actors, which in turn creates different attitudes toward patents. The business actors include foreign companies investing in China, Chinese elite domestic private enterprises, Chinese state-owned enterprises, and the majority of Chinese domestic private enterprises. In an important way, their different attitudes toward the patent norm not only influence the effectiveness of patent enforcement but also reflect an uneven level in the thoroughness of the Chinese political and economic transition. I conclude this chapter by connecting the implementation of Chinese patent policy with the country’s ongoing institutional reforms.
Chinese Patent System: Enforcement Function and Beyond
This section provides an analysis of the legal and administrative enforcers of Chinese patent policy—namely, the Chinese IPR special tribunals and patent bureau/IPOs. Previous scholars have already offered a thorough analysis of the organizational evolution of the Chinese State Patent Bureau (SPB); its successor, the Chinese State Intellectual Property Office (SIPO); and SPB/SIPO’s regional branches. They have also conducted an in-depth discussion of the relationship between the Chinese patent administrative apparatus and IPR courts.7 Nevertheless, some key issues that influence their enforcement functions remain underexplored: Do Chinese IPR courts and IPOs have any goals other than patent protection? If patents receive due protection, how do the enforcement decisions influence (and are influenced by) the broader political and economic environment in China? This section situates the operation of Chinese IPR courts and patent bureau/IPOs against the greater political and economic backdrop of the country’s market reform since the early 1980s. I argue that the Chinese IPR tribunals and patent bureau/IPOs not only enforce patent laws but also design patent policy to serve the general scheme of the country’s economic modernization campaign. Hence, the effectiveness of Chinese patent policy is measured by the quantity and quality of enforcement cases and also by its contribution to the country’s technological and economic advancement.
Chinese IPR Tribunals: Between Trial and Mediation
As some scholars have rightly pointed out, Chinese IPR courts are the primary venue for delivering patent protection. Over the years, Chinese IPR courts have handled high-quality patent enforcement cases through trials. Building on these scholars’ analyses, I demonstrate that, in addition to delivering legal enforcement through a trial, the Chinese IPR tribunals have also increasingly introduced pretrial mediation as an alternative means to resolving patent disputes in recent years. Both trial and pretrial mediation serve China’s need to render technological innovation into practical market benefits.
Chinese patent legislation identifies three types of patent violations: patent infringement (qinquan), patent counterfeit (jiamao), and patent passing off (maochong).8 The 2008 Chinese patent law defines patent infringement (qinquan) as “the exploitation of a patent without the authorization of the patentee” for the purpose of making profits.9 Patent counterfeit (jiamao) is defined as counterfeiting the patent certificate or other patent documents belonging to the legitimate holder of the patent. Patent passing off (maochong) is defined as selling or producing a nonpatented product as a patented product.10 When a patent owner identifies a patent violation, the owner can resort to legal protection or administrative protection. Under the current Chinese patent regime, IPR courts are the primary providers of legal enforcement while IPOs at different levels are the primary providers of administrative enforcement. Due to their technical complexity, most patent infringement (qinquan) cases are handled through legal channels. Regional patent bureaus or IPOs are mainly in charge of handling the relatively less complex cases of patent counterfeits and patent passing off. According to some scholars of Chinese IPR policy, high-quality enforcement, featuring consistency, transparency, and procedural fairness, has emerged in the Chinese IPR special tribunals. They attribute this to the high qualifications of Chinese IPR judges, the relatively independent status of IPR special tribunals, and the courts’ stronger authority to resist local protectionism.11 These factors have equipped the Chinese IPR special tribunals with the capacity to handle complex patent infringement cases. Chinese IPR judges themselves are also confident of the quality of their legal decisions and are required by the People’s Supreme Court to post these decisions online for the general public to review.12
Figure 1. Administrative versus legal enforcement of patent cases
