Zhao Shuo
WANG JING & GH LAW FIRM
Intellectual Property
Senior Legal Consultant
Zhao Shuo
WANG JING & GH LAW FIRM
Intellectual Property
Senior Legal Consultant
All about IP is coming
This is a warm-up of a series of IP-related feature articles that serve as a brief introduction to basic theories of the legal system of intellectual property. IP-concerned information is going to be presented on a regular basis. For more information, please scan the QR code at the end of the article to contact your IP assistant.
Emergence and evolution of IP legal system
Intellectual property, a "privilege" "granted" by feudal lords, originated in a feudal society where it as an intellectual achievement was considered as the embryo of proprietary rights, in spite of the failure to form a legal system. The earliest IP legal system germinated during the Renaissance, when the Republic of Venice enacted the world's first patent law in 1474, saying that an invention once obtained shall be protected from being counterfeited without consent, otherwise a compensation of 100 gold coins shall be demanded and the facility used for creating counterfeits shall be destroyed.
Since the 17th century, as capitalistic economy marched forward and capitalist production was taking shape, capitalists seeking to outperform their rivals and earn more margins in the commodity economy market were in pressing need of research and cultivation of more intellectual achievements, thus allowing them to dominate the market. Meanwhile, capitalists required their intellectual achievements to be legally confirmed as private property and protected, so that their dominant status would be maintained amid fierce competition. Against this background, the modern legal system of intellectual property was being established. The Statute of Monopolies promulgated by the United Kingdom in 1624 marks the beginning of the modern patent protection system; the Statute of Anne issued by the United Kingdom later in 1710 is the first written copyright law, and the Registered Trademark Protection Ordinance issued by France in 1809 is the earliest written trademark law.
In the middle and late 19th century, various countries, after realizing the important role that intellectual property would play in promoting national economy, cultural prosperity and scientific progress, established their IP legal systems respectively. Following the United Kingdom, the United States, France, Russia, the Netherlands, Spain, India, Germany, and Japan also enacted their patent laws. In particular, the United Kingdom, having experienced more than 200 years of practicing the patent system, further revised the Statute of Monopolies, and formally promulgated its patent law in 1852. By the end of the 19th century, 45 countries had been implementing the patent system. After that, the United Kingdom, the United States, and Germany successively issued registered trademark laws. In addition, the Copyright Ordinance and the Copyright Law were enacted later in Japan, and the Act of Performance Rights and the Act of Author Rights in France. The competition law of modern significance is believed to stem from the United States, who issued the Sherman Act that covers antitrust and unfair competition in 1890, the Federal Trade Commission Act and the Clayton Act. Britain's legislation against unfair competition includes the Restrictive Trading Management Act and the Fair Trading Act. In 1957, Germany issued the Act against Restraints of Competition, and established a relatively complete system of competition laws. Affected by Germany, Japan also enacted the Unfair Competition Prevention Law.
The considerate economic benefits embodied in intellectual achievements, such as advanced technologies, time-honored brands and artworks, are being recognized amid social progress and development. However, technological disclosure and generalization will inevitably comprise the competitive edge that the inventor has, in which case a widely known brand is hard to avoid being counterfeited by competitors. The IP system of today is designed to ensure that an obligee obtains the competitive edge corresponding to the certain intellectual achievement that he or she holds, while satisfying the society's call for technology, preventing monopolies, and balancing between the exclusive rights of intellectual achievement and the public good.
Intellectual Property Law system
On account of the fact that each country has established its own IP legal system, intellectual property rights become a private entitlement based on national laws, thus being limited by national boundaries. For instance, the examination-authorization procedure is the prerequisite to apply for a patent right, so that a patent authorized only in China is not under protection in other countries. The ownership of a trademark is subject to the principle of registration, except the registration of a well-known trademark. It's impossible for a well-known trademark approved and registered in China to assert rights against counterfeiting occurred abroad.
With the economy growing, international trade crossing national borders has increased, during which intellectual property rights also circulate along with the exchange of commodities and services and intellectual property rights can also be traded and licensed as special products at the same time. Under such circumstances, considering the territoriality of IP, a right is valid only in the country that authorizes it and of no binding force in other countries. To make a certain intellectual achievement protected by other countries, it's necessary to separately and simultaneously file applications or make registrations at these countries, which is something hard to achieve and can incur high economic costs as each country may adopt different principles and procedures concerning the authorization and protection of IP, consequently, resulting in negative effects on economic and technical trading between countries. To resolve this contradiction and enable an intellectual achievement to be protected easily in various countries, an international IP legal system was developed step by step.
The earliest international IP system was seen in a bilateral agreement on copyright protection signed by Italy with Austria and France in 1843. In the mid-19th century, France signed bilateral protection protocols with more than 20 countries, including Britain and Belgium.
In 1883, 11 countries endorsed the Paris Convention for the Protection of Industrial Property in Paris, which, instead of directly ruling out the territoriality of IP, requires its members to commonly abide by several basic principles, on the basis of respecting each of their IP legal systems. By doing so, the legislation of members can be coordinated, and their systems can be of generality. In addition, due to mutually beneficial policies, each member must legally treat other members of the convention the same as its citizens. The industrial property rights mentioned include the patent for invention, utility model, industrial appearance design, ownership of a trademark, service mark, vendor name, indication of origin or appellation of origin, as well as prevention of unfair competition. Up to now, the Paris Convention has been a fundamental convention governing the protection of industrial property rights worldwide. On March 19, 1985, China joined the Convention as a member. According to information released by the State Intellectual Property Office, the convention had taken in 177 members as of June 9, 2017.
In 1886, 10 countries, including Britain, France, Switzerland, Belgium, and Italy, signed the Berne Convention for the Protection of Literary and Artistic Works, the first and still dominant international treaty in the copyright domain. On October 15, 1992, China joined the Convention as a member. According to information published by the World Intellectual Property Organization (WIPO), after the joining of the Solomon Islands, the total number of contracting states to the convention reached 177 as of July 4, 2019. So far, international legal systems have been established in the two major IP areas, industrial property rights and copyright of literary & artistic works.
In 1891, when France, Belgium, Spain, and Switzerland signed the Madrid Agreement Concerning the International Registration of Marks, parties to the agreement formed a special union for the international registration of trademarks, so that citizens of each contracting state can apply for trademark registration with the International Bureau of the WIPO via its governing institution at home, and thus the trademark of commodities or services obtained in its country of origin is protected in all other member states. China joined the union on October 4, 1989. Information published by the World Intellectual Property Organization (WIPO) indicates that the sum of contracting states to the convention had amounted to 105 as of September 2019.
The Convention Establishing the World Intellectual Property Organization, which was signed in Stockholm in 1967 and came into effect in 1970, proclaimed the founding of the World Intellectual Property Organization (WIPO), replacing the "International Bureau" stipulated in the Paris Convention for the Protection of Industrial Property and the Berne Convention for the Protection of Literary and Artistic Works, and becoming one of the 15 specialized institutions of the then United Nations System of Organizations in 1974.
To date, the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement) has been the international treaty that has dominant effects on the intellectual property laws and systems adopted by many countries. In 1994, it was signed together with other WTO agreements, and arguably an international convention of extensive coverage, high-level and vigor protection, and strong restricting force in the field of intellectual property protection. Its foundation of rights protected includes copyright & neighboring rights, ownership of trademark, geographical indication right, industrial product appearance design right, patent rights, integrated circuit diagram design right, and protection of undisclosed information. It involves an overwhelming majority of multilateral treaties on intellectual property and constitutes the minimum criteria to which the IP protection system of WTO members has to be up. Aside from substantive regulations, it also states provisions on IP law enforcement standards and procedures, and stipulates civil liability, criminal liability, border measures, and temporary measures against IP violations. Furthermore, the WTO dispute settlement mechanism has been brought in to resolve IP-related disputes between members.
Ever since the Paris Convention, numbers of countries have successively signed various international and regional patent protection treaties or agreements. Apart from the aforementioned international conventions, treaties, and agreements, there are also the Trademark Law Treaty, the WIPO Copyright Treaty, the WIPO Performances and Phonograms Treaty, the Patent Cooperation Treaty to supplement the Paris Convention, the Locarno Agreement on classifying patents and trademarks, and the Nice Agreement. Therefore, a relatively complete international IP legal system has been established worldwide.
Intellectual Property Law system of China
China's intellectual property system was initially slow to develop. In the late Qing Dynasty, in spite of the enactment of a series of IP laws, including the Regulations for Awarding the Revitalization of Technology, the Trial Regulations for Trademark Registration, and the Copyright Law of Qing Dynasty, favorable implementation was never achieved due to the failure of the Reform Movement of 1898 and other political and economic reasons at home and abroad. IP-related laws enacted by the succeeding Beiyang Government and the National Government were not put into practice on account of the turbulent situation with uncertainty. After the founding of new China, affected by political and economic conditions, China didn't establish its IP legal system in the early stages. At the Third Plenary Session of the 11th Central Committee held in 1978, when the principle of making economic construction the central task was confirmed, China formulated a series of laws to promote its economic development. Subsequently, China issued the Trademark Law in 1982, the Patent Law in 1984, the Copyright Law in 1990, and the Anti-Unfair Competition Law in 1993, thereby establish China's IP system at a preliminary level.
With its development and rise, China successively became part of a variety of international conventions on IP protection, such as the aforementioned Berne Convention and the Paris Convention for the Protection of Industrial Property. In 2001, when joining the World Trade Organization, China further amended its existing IP laws in accordance with the IP protection standards set in the TRIPs Agreement and as requested by the WTO, and formulated conservation regulations on objects of right, including geographical indication, integrated circuit, and new plant variety. Since then, an IP legal system with Chinese characteristics has been built gradually in China.
China's intellectual property is governed by a double-track system that consists of administrative and judicial protection, including three forms of liability - civil, administrative, and criminal liabilities. Section 3, Chapter 5 of the General Principles of the Civil Law (Amended on August 27, 2009) — "Intellectual Property" regards copyright, patent right, and ownership of trademark as the base for civil IP rights. Article 94: Citizens and legal persons shall enjoy rights of authorship (copyrights) and shall be entitled to sign their names as authors, issue and publish their works and obtain remuneration in accordance with the law. Article 95: The patent rights lawfully obtained by citizens and legal persons shall be protected by law. Article 96: The rights to exclusive use of trademarks obtained by legal persons, individual businesses and individual partnerships shall be protected by law. Article 97: Citizens who make discoveries shall be entitled to the rights of discovery. A discoverer shall have the right to apply for and receive certificates of discovery, bonuses or other awards. Citizens who make inventions or other achievements in scientific and technological research shall have the right to apply for and receive certificates of honor, bonuses or other awards.
Article 123 of the General Principles of the Civil Law (passed on March 15, 2017) makes the following provision for the object of IP right: civil subjects enjoy intellectual property right by law. IP right is an exclusive entitlement to the following objects legally enjoyed by the obligee: (I) Works; (II) Invention, utility model and appearance design; (III) Trademark; (IV) Geographical indication; (V) Commercial secret; (VI) Layout designs of integrated circuit design; (VII) New plant variety; (VIII) Other object stipulated by law.
Based on the above provisions, China's IP laws include the Trademark Law, the Patent Law, the Copyright Law, and the Anti-Unfair Competition Law. In addition, there are administrative and departmental regulations, such as the Stipulations on Protection of Products with Geographical Marking, the Regulations on the Design and Protection of Integrated Circuit Layout Drawings, the Regulations on the Protection of New Varieties of Plants, the Regulations on the Customs Protection of Intellectual Property Right, and the Protection Measures for Intellectual Property Rights. Other local, autonomous and separate regulations include the Protection Regulations on Technical Secrets of Enterprises in Shenzhen Special Economic Zone. An IP infringement act, if resulting in serious circumstances and involving significant amount, may also commit the crime of intellectual property infringement stipulated in Section 7, Chapter 3 of the Criminal Law.
