Posts in China

The U.S. Chamber of Commerce’s Global Innovation Policy Center (GIPC) held a webinar on Tuesday, April 6, as part of its Innovation Ecosystem series, titled “Worth Protecting,” which included Steve Francis, Assistant Director, HSI Global Trade Investigations Division Director, National IPR Coordination Center, as one of the panelists. Francis explained that public-private partnerships have been key to combating the spike in illicit activity that has occurred during the COVID-19 pandemic. 85%-90% of illicit activity on seizures over the last five years has originated from Hong Kong and China, said Francis.

The U.S. Chamber of Commerce Global Innovation Policy Center (GIPC) released its ninth annual International IP Index yesterday, finding that the United States, Japan and Europe remained at the top of the global intellectual property rankings, while emerging markets like the United Arab Emirates, China and Mexico continued to improve their scores. Despite the pandemic, the overall global IP environment improved, and the report underscored the critical role that strong IP economies played in combating COVID-19. The report, titled “Recovery Through Ingenuity,” covers the IP framework in 53 global economies across 50 unique indicators. 32 of these 53 economies had positive improvements in their scores over the 2020 report.

On March 16, the European Patent Office (EPO) released the Patent Index 2020, which gives the public a snapshot view of the filing activities going on at the EU’s patent granting agency during the past year. Total patent application filings declined only slightly during 2020 to just over 180,000 patent applications, a reduction of 0.7% compared to the EPO’s 2019 patent filing totals. Despite a 4.1% decrease in patent application filings at the EPO, the United States still held the top spot among individual countries with 44,293 EPO patent filings. Patent application filing totals also dropped in Germany (down 3% to 25,954 filings) and Japan (down 1.1% to 21,841). The United States, Germany and Japan were ranked first, second and third, respectively, in the EPO Patent Index 2020.

Determining where to seek patent rights is an important and expensive decision. If you know you are going to want international patent protection, the best, most cost-effective course is to file directly in those countries. This direct filing strategy does not utilize the Patent Cooperation Treaty (PCT), but instead leverages direct filings in countries of interest. For well established companies in mature markets, this can be an effective strategy. For immature markets, new companies, or even mature companies entering immature markets, it is difficult to know where patent protection will be necessary, which makes an international patent application filed pursuant to the PCT a highly effective strategy.

Traditional Chinese Medicine, or TCM, is a subset of herbal medicine. TCM patent applications generally fall into four categories. A Compound formula is the predominant type of patent application in the field of Chinese medicine. This is not surprising because most TCM combines two or more medicinal materials to be effective. Medicinal craft refers to active ingredients extracted from medicinal materials using a specialized process, or the specialized process itself. Medicinal materials refer to the original medicinal materials used in the preparation of Chinese medicines. Some of these original medicinal materials are the whole plant or a certain part of the plant, and some need to be processed. Related products refer to non-medicinal products containing Chinese medicines, including medicated foods, namely functional foods, health products and cosmetics containing Chinese medicines. These categories reflect the main objectives of TCM patent protection: namely, to protect the formula, craft, original materials, and commercial products. 

Senator Jim Inhofe (R-OK) yesterday introduced the “Protecting American Innovation and Development (PAID) Act of 2021,” a bill that would give the U.S. Department of Commerce authority to hold accountable bad-actor Chinese companies that refuse to pay licensing and royalty fees to free-market developers of wireless technologies. Covered by standard essential patents (SEPs).

As we thankfully see 2020 fading into the rear-view mirror and all look forward to a hopefully much better 2021, we want to take a moment to reflect on what the past year brought us and how the stage is set for another very fluid and consequential year for intellectual property policy. In times like these, it is clear that leadership matters more than ever. During some of the most challenging times our country has faced, there were a number of places where we saw strong leadership result in tangible progress. This year has already shown us a dramatic first few days. Beyond the tragic events in the U.S. Capitol, we saw the somewhat unexpected shift of power in the Senate to Democratic control based on the election of both Rev. Raphael Warnock and John Ossoff in Georgia. It is clear that the new Congress and the new Biden Administration will face huge challenges before we approach anything close to “normal” in any sense. That said, when it comes to IP, what can we expect?

On January 11, Brian Pomper, Executive Director of the Innovation Alliance, sent a letter to President-elect Biden and Vice President-elect Harris urging support for strong patent rights and outlining Innovation Alliance’s recommendations with respect to the U.S. patent system and the U.S. Patent and Trademark Office (USPTO). The letter emphasized the importance of a strong patent system that incentivizes technological advancement in order to effectively compete with China and explained that the current system is in distress and strong leadership is needed.  

On January 13, the United States Patent and Trademark Office (USPTO) published a new report on the impact of patent and trademark filing trends in China. The report, titled Trademarks and Patents in China: The Impact of Non-Market Factors on Filing Trends and IP Systems, discusses how the high rate of Chinese patent and trademark filings may well be influenced by government subsidies and other non-market factors, rather than inventiveness and organic economic activity within China.

Judge Rodney Gilstrap of the U.S. District Court for the Eastern District of Texas yesterday issued an order enjoining  Samsung Electronics from taking any action to interfere with Ericsson’s U.S. FRAND (“fair, reasonable, and non-discriminatory” terms) lawsuit against Samsung in his court. Samsung had filed a lawsuit on December 7, 2020 in the Wuhan Intermediate People’s Court of China but did not provide notice to Ericsson of the action. “Unaware of the Chinese Action,” according to Judge Gilstrap’s order, Ericsson filed a complaint against Samsung on December 11, 2020 in the Texas court, alleging that Samsung breached its obligation to license its Standard Essential Patents (SEPs) on FRAND terms, and “notified Samsung of its Complaint in this Court that same day.” Samsung subsequently asked the Wuhan court to issue an “anti-suit injunction” (ASI) to prevent it from seeking relief relating to the SEPs at issue anywhere else in the world. The Wuhan Court issued the ASI on December 25 for the “duration of the Chinese Action and until a future judgment in that Action becomes effective.” The Wuhan Court gave Ericsson notice of the ASI after it had issued on December 25. Ericsson thus asked the Texas Court for an emergency temporary restraining order (TRO) on December 28, which the court granted.

In contrast to his one time colleague, former Federal Circuit Chief Judge Randall Rader earlier this month filed a Declaration supporting Samsung Electronics in its Opposition to Ericsson, Inc.’s Application for Anti-Interference Injunction relating to Samsung’s lawsuit in the Wuhan Intermediate People’s Court of China. Retired Federal Circuit Judge Paul Michel recently filed an amicus brief supporting Ericsson in the case and calling into question the procedures of the Wuhan court.

One of the key trade secret trends in 2020 that was not mentioned by James Pooley in his excellent recap of the year’s trends was the continued focus by the government on Chinese economic espionage. Last year marked the two-year anniversary of the Department of Justice’s “China Initiative,” which was announced by Attorney General Jeff Sessions on November 1, 2018, and which was intended to increase the focus on the investigation and prosecution of trade secret theft and economic espionage under the Economic Espionage Act (EEA) and other “unfair trade practices” committed by the Chinese government and Chinese Nationals. The China Initiative reflects the strategic priority of countering Chinese national security threats and reinforces the government’s overall national security plan. The China Initiative is led by the Department of Justice’s National Security Division, which is responsible for countering nation-state threats to the United States.

Earlier today, Judge Rodney Gilstrap of the United States Federal District Court for the Eastern District of Texas issued a temporary restraining order against Samsung in a FRAND (fair, reasonable and non-discriminatory licensing rates) lawsuit filed by Ericsson on December 11, 2020. The Order gives Samsung until January 1, 2021 to file any opposition to the continuation of the temporary restraining order, and gives Ericsson until January 5, 2021 to respond if, or more likely when, Samsung, files an objection. At first glance to the trained eye this seems shocking, but as is so often the case in the world of standard essential patents (SEPs) and FRAND, there is much more than meets the eye.

While China is becoming an increasingly attractive patent filing destination for foreign companies, foreign counsels are often confused by the country’s inventive step requirement. Indeed, Chinese patent examiners often use abstract legal terms, such as “prominent substantive features” and “notable progress,” in their inventive step analysis. This article provides an overview of the inventive step requirement in China, in comparison with the non-obviousness standard in the United States.

On October 17, 2020, the Standing Committee of the Thirteenth National People’s Congress (China’s top legislature) passed the Fourth Amendment to the Chinese Patent Law, which will become effective on June 1, 2021 (“Effective Date”). As I was digesting the news and browsing through the 29 newly published changes made to the previous version of the Chinese Patent Law, which was passed in 2008, a line from “The Song of the Pipa Player”, a popular poem written in 816 A.D. by Bai Juyi (one of the three most famous poets in China’s Tang Dynasty), came to mind: “Only after our repeated calls did she appear; her face half hidden behind the pipa she held.” Indeed, while the First, Second, and Third Amendment to the 1984 Chinese Patent Law each came out with clockwork precision eight years after the previous enactment—in 1992, 2000, and 2008, respectively—this Fourth Amendment took 12 years to incubate, and struck a number of new areas that will need to be further revealed in future practice.