2011-26757. Request for Comments on Intellectual Property Enforcement in China

AGENCY:

United States Patent and Trademark Office, Department of Commerce.

ACTION:

Request for written submissions from the public.

SUMMARY:

As China has become a major trading partner for the United States, U.S. rights holders are increasingly seeking to protect and enforce their intellectual property (IP) in that country. China's patent and trademark offices are now among the largest in the world in terms of filings, and its IP enforcement system is being increasingly utilized by U.S. rights holders. Ensuring that the Chinese IP system works in a fair and timely manner for U.S. innovators is a top priority for the U.S. Government.

To that end, the United States Patent and Trademark Office (USPTO), in collaboration with other U.S. Government agencies, is leading an effort to identify and assess the challenges U.S. inventors are facing with China's judicial and administrative patent enforcement systems. The USPTO would like to address the concerns of rights holders by working with them to identify problems—such as difficulties in gathering evidence, meeting evidentiary requirements, protecting proprietary information, obtaining adequate damages, and enforcing preliminary injunctions—to then find ways to address these issues with the Chinese Government.

As part of this effort, the USPTO, in coordination with the White House Intellectual Property Enforcement Coordinator (IPEC), has conducted a series of roundtables to obtain the views of diverse members of the patent community who have first-hand experience enforcing their patents in China. Roundtables were held on July 19, 2011, in Washington, DC; on July 26, 2011, in Beijing, China; on July 29, 2011, in Shanghai, China; and on August 1, 2011, in Guangzhou, China. Topics for discussion included: (1) Acquisition and enforcement of utility model and design patents; (2) evidence collection and preservation in Chinese courts; (3) obtaining damages and injunctions; (4) enforceability of court orders; and (5) administrative patent enforcement.

To ensure that the USPTO receives a wide array of views, the USPTO would like to invite any member of the public to submit written comments on China's patent enforcement system, including, but not limited to, the five specific issues listed above. Examples of first-hand experience using China's patent enforcement system, and recommendations on ways to improve the system, are encouraged. Based on these comments, the USPTO intends to produce a report that details the patent enforcement landscape in China and identifies any challenges faced by U.S. innovators, together with recommendations for improving the system.

DATES:

Effective Date: October 17, 2011.

Dates and Times: The deadline for receipt of written comments for consideration by the USPTO on the five categories of issues listed above, or on any other issues pertaining to China's patent enforcement system, is November 4, 2011.

ADDRESSES:

Written comments should be sent by electronic mail message via the Internet addressed to [e-mail]. Comments may also be submitted by mail addressed to: Mail Stop OPEA, United States Patent and Trademark Office, P.O. Box 1450, Alexandria, VA 22313-1450, Attn: Elizabeth Shaw. Although comments may be submitted by mail, the USPTO prefers to receive comments via the Internet. If you would like to submit confidential business information that supports your comments, please contact Elizabeth Shaw at [e-mail] or 571-272-8494.

The written comments will be available for public inspection by appointment only at the Office of Policy and External Affairs in the Executive Library located in the Madison West Building, Tenth Floor, 600 Dulany Street, Alexandria, Virginia, 22314. Contact: Elizabeth Shaw at [e-mail] or 571-272-8494.

Because comments will be made available for public inspection, information that is not desired to be made public, such as an address or phone number should not be included in the comments.

FOR FURTHER INFORMATION CONTACT:

Elizabeth Shaw, Office of Policy and External Affairs, by phone [phone], by facsimile to 571-273-0123, by e-mail at [e-mail] or by mail addressed to: Mail Stop OPEA, United States Patent and Trademark Office, P.O. Box 1450, Alexandria, Virginia 22313-1450, ATTN: Elizabeth Shaw.

SUPPLEMENTARY INFORMATION:

As the second largest economy in the world, China continues to attract U.S. businesses interested in tapping into its growing domestic demand and rapid market growth. As U.S. innovators continue to export their products and services into China, the effective functioning of China's patent enforcement system will be critical to the success of U.S. innovators in China.

The State Intellectual Property Office (SIPO) of the People's Republic of China is now one of the largest patent office in the world in terms of patent filings. It received 1.2 million patent applications in 2010. Despite an increase in the number of patents obtained in China, the number of patent cases filed in Chinese courts has remained relatively unchanged since 2005.

Patent enforcement in China comprises two mechanisms—judicial and administrative. Concerns over China's judiciary (such as lack of adequate discovery powers, evidentiary burdens, and low damages rewards) have been cited as reasons why U.S. and foreign companies do not file more patent suits in Chinese courts. Indeed, according to China's Supreme People's Court, only about 4 percent of civil IP cases in China involve foreign parties. Furthermore, China issues utility model and design patents that do not undergo substantive examination and have complicated actual inventors' pursuit and enforcement of their IP rights in China.

In addition to judicial patent enforcement in Chinese courts, patent enforcement in China can also occur administratively in SIPO's provincial IP offices, which have the authority to issue cease-and-desist orders, seize infringing goods, and exact penalties against infringers. The limited investigative powers of the agency and ineffectual penalties have been cited as reasons for the weakness of this enforcement route.

The USPTO has conducted a series of roundtables to evaluate U.S. rights holders' views of China's patent enforcement system. These views have included first-hand experiences enforcing patent rights in China, defending against charges of infringement in China, as well as suggestions for future improvements to the system. The USPTO heard from a number of roundtable participants from diverse sources including practitioners, industry, trade organizations, academia, and government.

To ensure that the USPTO receives a wide array of views on China's patent enforcement system, the USPTO is now seeking written comments on patent enforcement issues in China, including but not limited to (1) acquisition and enforcement of utility model and design patents; (2) evidence collection and preservation in Chinese courts; (3) obtaining damages and injunctions; (4) enforceability of court orders; and (5) administrative patent enforcement. Any member of the public may submit written comments. Examples of first-hand experience using China's patent enforcement system, and recommendations on ways to improve the system, are encouraged. Based on these comments, the USPTO intends to produce a report that details the U.S. view of the patent enforcement landscape in China and identifies any challenges faced by U.S. innovators, together with recommendations for improving the system.

Dated: October 5, 2011.

David J. Kappos,

Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office.