Innovation and IP changes in China Kit Chan 1

DISCLAIMER The information presented here is not and should not be considered to be legal advice. The information here is not intended to create a lawyer-client relationship. When confronted with legal issues it is always the best practice to find someone who has the particular expertise necessary to provide meaningful advice. Information from this presentation should not be relied upon or used as a substitute for consultation with professional advisors. The views expressed here are those of the author alone and are not those of the author’s employer. While the material has been reviewed for accuracy, no liability exists for errors or omissions. Applying the information provided in the presentation does not mean that you will prevail in a civil or administrative proceeding. 2

Presenters Dr. Alan Paau Al Kwok Tomson Lee 10/26/2015 3

Current Status One Road & One Belt Asia Infrastructure Investment Bank (AIIB) 亚洲基础设施投资银 Lot of RMB outside 4

5 Hong Kong Monetary Authority

Biggest Manufacturing Country Knowledge Based Economy? 大众创业、万众创新 [Double Creation?] Domestic vs Global Technology now vs Improvements 6

What does China NEED? Frontier Technologies (selected) Biotechnology Information Technology Advanced Materials Technology Advanced Manufacturing Technology Advanced Energy Technology Main Areas (selected) Energy Environment Agriculture 7 10/26/2015 See "The National Medium- and Long-Term Program for Science and Technology Development ( )”,

CN, US and World? Utility PatentUtility ModelDesignPlantTotal CN 1 Appl.928,177868,511564,555n/a2,361,243 Grant233,228707,883361,576n/a1,302,687 US 2 Appl.578,802n/a35,3781,063615,243 Grant300,677n/a23,6571,072326,033 World 3 Appl.2,680,900 1,138,40015,600 Grant~1,180k 8

Concerns IPR violations Piracy especially in film and software industries 1 Losses in sales, royalties, and license fees 2 Lack of effective and consistent protection of IP rights Flooded with GIP, Government-Induced Patents and AIP, Apparent Invalid Patents; Lacking resources and a sophisticated legal system to effectively deal with IPR violations 3 Serious problem for domestic Chinese firms as well /26/ See China-U.S. Trade Issues, December 5, 2014, Page Id. 3.Id. at Page 36 4.Id.

Trying…. Unprecedented emphasis to implement IP protection: “ 完善激励创新的产权制度、知识产权保护制度和促进科技成果转化的体 制机制 ” - 四中全会决议 “Perfect a property rights system and an intellectual property rights system that encourage innovation, and structures and mechanisms to stimulate the transformation of scientific and technological achievements.” - CCP Central Committee Decision concerning Several Major Issues in Comprehensively Advancing Governance According to Law) (October 23, 2014) Establishing IP courts in Beijing, Shanghai and Guangzhou Supreme Court’s new proposed rules on patent infringement trials 1 Establishing PRC National IP judicial protection and International Exchange center in Shanghai /26/ See 最高人民法院关于审理侵犯专利权纠纷案件应用法律若干问题的解释 2.See

Issues 11