China's Patent System and Globalization

Article excerpt

China has continuously improved its patent system and IP laws until it now conforms to the World Trade Organization's TRIPS Agreement.

OVERVIEW: With the speedup in economic globalization, tariffs have been greatly cut and non-tariff measures have been substantially reduced. As the role of tariff protection is further weakened, IP protection is becoming one of the major issues in international economic development and is of concern to all countries. China, by revising its patent law, acceding to international conventions, and strengthening enforcement of the law, has made impressive progress toward building a good IP system. China has taken steps to fulfill its TRIPS (Trade-Related Aspects of Intellectual Property Rights) obligations and to become gradually integrated into the economic globalization process.

KEY CONCEPTS: globalization, China's patent system, TRIPS Agreement.

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rules, and judicial interpretations relating to WTO matters were reviewed, 830 pieces of which were discontinued or repealed.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 modern, 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. …