Growing economies by rights

Tighter Intellectual Property rules bring countries closer

While protection of intellectual property rights for years has been a sticking point for overseas companies thinking of entering the China market, significant progress has been made on many fronts recently, both in China and Europe, to protect those rights.

IP concerns should not stop businesses from pursuing opportunities in China, says Baroness Lucy Neville-Rolfe, Britain's IP minister and parliamentary under-secretary at the Department for Business, Innovation and Skills, who concluded a five-day visit to China in early September.

She admits that risks do still exist given that China is a fast-developing country with a very different business culture from the United Kingdom. "But we are working together with our Chinese counterparts to help improve British company IP outcomes in China," she says.

In the most recent sign of progress, an agreement between the UK Copyright Licensing Agency and the China Written Works Copyright Society was signed in Beijing during her visit to China.

One of the benefits of that step is that the agreement, for the first time, will place Chinese written works in the British market, including books, articles in newspapers and magazines and academic papers, under the protection of the CLA, a nonprofit organization that has authorized more than 39,000 organizations and publications to copy and use copyright works while obtaining fair rewards for rights holders.

Yan Xiaohong, deputy chief of the Chinese National Copyright Administration, says the agreement marks a milestone in copyright protection for Chinese works in overseas markets.

"It will encourage more Chinese writers and publishers to produce more high-quality copyrighted works appealing to foreigners, and guarantee their economic benefits," Yan says.

"Our copyright cooperation is boosting the economic value of both British and Chinese creative industries," Neville-Rolfe says.

"And all of our lives are enriched by cultural products, with Chinese consumers now enjoying the British TV series Sherlock and Downton Abbey, listening and perhaps just as important watching One Direction and reading Jamie Oliver and Peppa Pig in Chinese."

As a long-term observer of China, Neville-Rolfe says that she is pleased to see that it is supporting a global, rules-based research and innovation environment.

Her visit began with the 2nd China-UK IP Symposium held in Beijing, hosted in partnership with the Chinese State Intellectual Property Office.

She called the symposium an important part of UK-China cooperation to build a global IP system that promotes trade, investment and innovation. At the same time, there were UK-China IP activities and events taking place across the country in eight cities - Beijing, Shanghai, Hangzhou, Suzhou, Nanjing, Guangzhou, Chongqing and Hong Kong.

"The benefits of an efficient and fair global IP system are huge, for both the UK and China," she says.

The visit occurred in the context of Britain aiming to double exports to 1 trillion pounds ($1.63 trillion) by 2020. Within this, the British side says the target is to double UK exports to China from their 2010 level to $30 billion. UK exports to China were worth $25.62 billion in 2013.

"While many UK companies already have strong trading relationships with China, we must build on these links and work hard together to continue to reduce any barriers to doing business," says Neville-Rolfe.

She was joined on her trip by some of the UK's biggest companies, including Unilever, Burberry and Penguin. She also knows the issues from both private and government perspectives. She spent 25 years in Whitehall, first as a civil servant in the agriculture department before going to work under former UK prime minister John Major in the Number 10 policy unit on deregulation. She moved to retailer Tesco in 1997 after being sought out by Terry Leahy, Tesco's former chief executive, and was appointed the UK's minister for IP in July.

Prior to her visit, Chinese e-commerce giant Alibaba signed an agreement with the China-Britain Business Council to protect intellectual property and crack down on counterfeiters.

In response to pirated items on its websites, the company has removed millions of knockoffs after receiving complaints.

Other companies are taking similar initiatives, such as ShangPin.com, which has recently teamed up with Topshop boss Phillip Green to sell items from the British multinational retailer on their luxury retail site, confident that they are not fakes.

In addition, Chinese applicants are now the single largest group of patent applicants in the world. Of the 800,000 invention patent applications to the Chinese State IP Office last year, 80 percent were from domestic applicants. Last year, China was the third-largest foreign applicant nationality in the UK with 1,113 applications in 2013.

Also in 2013, a total of 845,064 copyright works were voluntarily registered in China, an increase of 23 percent from 2012.

Neville-Rolfe says she is also glad to see the results of Chinese innovation overseas: Over 4,000 European patent applications by Chinese residents entered the regional phase at the European Patent Office last year.

Neville-Rolfe says that enforcement is the main challenge facing the Chinese IP landscape, but progress is now being made.

In Shanghai, for example, the government is working on a simplified model that brings together trademark, copyright and patents, previously regulated by different government departments, she says.

In addition, special IP courts are for the first time being established in Beijing, Shanghai and Guangzhou, a step that could also bolster enforcement.

She stressed the importance of education in IP protection enforcement, and says she finds that schools in China are increasingly making progress in this area.

"Universities are trying to get intellectual property on the agenda, say through business or management courses, and also in science and technology courses," she says, adding that some secondary schools are teaching intellectual property issues using textbooks.

"Furthermore, stronger copyrights could also translate to development of joint research in scientific and technological fields," Neville-Rolfe says. And good collective licensing can contribute hundreds of millions to the economies of both the UK and China, she says.

Indeed, there is growing evidence of the mutual benefits of a strong international IP system.

Chinese telecom giant Huawei has built a successful London Design Center to produce designs for the European smartphone market, and aside from its research and development expansion in the UK, the company also opened a new R&D center in southern France in September.

Changan, one of China's biggest car companies, also announced over the summer plans to double the size of its R&D center at Nottingham Science Park which will create up to 175 new jobs over the next few years.

The UK and China are investing 200 million pounds in joint funding for scientific research and technology commercialization through the China-UK Research and Innovation Partnership, commonly known as the Newton Fund.

The fund will focus on global challenges such as environment, health and urbanization. It builds on the existing joint investment of 64 million pounds from Research Councils UK and their Chinese funding partners, she says.

In July, China and the UK launched a pilot Patent Prosecution Highway enabling companies to benefit from accelerated patent examination when making the same application in both countries.

"Building on the PPH, I would like to propose that the UK and China exchange analysis on topics related to achieving a more efficient global patent system. This matters a lot to sectors like electronics, semiconductors, LED displays, industrial components, household appliances and pharmaceuticals," Neville-Rolfe says.

China also has been working with the European Union as a whole since 2004 through annual EU-China talks on IP, held alternately in Brussels and Beijing.

These dialogues have enabled both sides to share information on multilateral IP issues, tackle shortcomings and find ways to improve, as well as set up a China IP helpdesk to assist European small and medium-sized enterprises in the protection and enforcement of their intellectual property rights in China.

Carolynn Look contributed to this story.

zhangchunyan@chinadaily.com.cn

(China Daily European Weekly 09/26/2014 page20)