China's Patent System and Globalization: China Has Continuously Improved Its Patent System and IP Laws until It Now Conforms to the World Trade Organization's TRIPS Agreement

Article excerpt

With the growth of international trade and the perfection of world capital markets, economic globalization has become an irreversible trend. In response to the tide of change concurrent with economic globalization, for the last three decades China has been pursuing a policy of reform and opening up to the outside world, and it has successfully made the historic transition from a central planning economy to a socialist market economy.

China's economy has grown rapidly in recent years. In 2007, China's GDP accounted for over 5 percent of the world economy, whereas it was only 1 percent in 1978. In 2007, China's share of global trade jumped to about 8 percent, whereas it was less than 1 percent in 1978. Meanwhile, China's development has boosted the growth of the global economy and trade. China now contributes to over 10 percent of the global economic growth and over 12 percent of the global trade expansion (1). It has become increasingly integrated into the global trading system.

As far as the legislative aspects are concerned, since joining the World Trade Organization (WTO), the Chinese government has conducted a major legislative overhaul and improved the transparency of the procedures. More than 3,000 laws, regulations, rules, and judicial interpretations relating to WTO matters were reviewed, 830 pieces of which were discontinued or repealed. A series of regulations concerning the liberalization of foreign investment and the improvement of market access were subsequently issued, and some service sectors, such as banking, security, insurance, transportation, and tourism, were opened up further to foreign companies. More significantly, China has made great progress in putting in place a modem, transparent, and effective IP system (including patent system), which paves the way for the integration of China into the global economy.

Integration into the Global Economy

The Chinese government has always attached a great deal of importance to IP protection. To date, China has entered nearly all major international conventions and treaties concerned with patent rights, such as the Paris Convention for the Protection of Industrial Property (PCPIP), the Patent Cooperation Treaty (PCT), the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purpose of Patent Procedure (Budapest Treaty), and the Strasbourg Agreement Concerning the International Patent Classification (IPC). Especially in the past several years, by revising the patent law and strengthening enforcement of that law, China has achieved a great deal of success in constructing a patent system that meets the requirement of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement (2).

China's Patent Law, promulgated March 12, 1984 and effective April 1, 1985, was revised on September 4, 1992 (effective January 1, 1993) and August 25, 2000 (effective July 1, 2001), respectively. The draft of its third revision is expected to be finalized soon. The latest patent legislation has further enhanced protection of patent rights in every aspect and has brought China's patent system fully in line with the levels of patent protection required by the TRIPS Agreement. Table 1 illustrates the extent to which China's patent protection conforms to the TRIPS Agreement.

1. Scope of Protection.--Under the 1985 Patent Law, patent rights were granted only for processes used in producing chemical compounds, but not for the compounds themselves, while in the 1993 Amendment, the scope of patent protection was expanded to "foods, beverages and condiments, pharmaceutical products and substances by means of a chemical process." This amendment brought the Patent Law into alignment with the requirements set out in Article 65.2 and 65.4 of the TRIPS Agreement (2) before China's acceptance into the WTO.

2. Protection Term for Inventions.--Under the 1993 Amendment, the term of protection for an invention patent was extended from 15 years to 20 years from the filing date, which is similar to the provision in the TRIPS Agreement that the term of protection for an invention patent shall not be less than 20 years from the filing date. …