Nowadays, intangible assets feature prominently in the balance sheets of many companies, and intellectual property rights comprise a substantial portion of intangible assets. For that reason, it is imperative for businesses to understand intellectual property rights and to adopt appropriate measures to protect their intellectual property. In fact, intellectual property protection has been a major issue during bilateral or multilateral trade negotiations between China and other countries. This chapter is designed to provide an overview of the Chinese regulatory framework of intellectual property. Since patent, trademark, and copyright are the so-called “three pillars of intellectual property, ” the discussion here focuses on those three areas of intellectual property law. Nonetheless, as the protection of trade secrets has gained more attention, trade secrets will also be mentioned at the end of the chapter.
Prior to the introduction of economic reforms, most Chinese enterprises did not heed intellectual property rights because the absence of market competition under a centrally planned economy made the protection of intellectual property dispensable. Even so, there were regulations on trademark and patent. With the implementation of economic reforms and the opening-up of the country to the outside world in the late 1970s, China found it necessary to enact intellectual property laws and regulations. Thus, China enacted its Trademark Law 1 in 1982, Patent Law 2 in 1984, and Copyright Law 3 in 1990. Apart from domestic law, China also acceded to international conventions and became a member of international organizations that aimed at protecting intellectual property or establishing uniform guidelines for intellectual property rights. For instance, China joined the World Intellectual Property Organization in 1980, acceded to the Paris Convention for the Protection of Industrial Property in 1985, and joined the Madrid Agreement on the Registration of International Trademarks in 1989.
By the early 1990s, China had enacted laws and regulations covering the major aspects of intellectual property. Nevertheless, these laws and regulations