IP System and Economic Development: Empirical Evidence from China Qi Su IP Institute, Tong Ji University Dec 04, TongJi Global Intellectual Property Forum

Introduction  The overall effects of IP system on economic growth are in general ambiguous.  The IP system has been the subject of frequent controversies in discussion about China’s economic growth.  What is the real drive behind the China’s miracle? What are the roles of IP system in China’s developing process?

IP System and Development Process: Empirical Evidence from China Traditional ： concept of IP as exclusive personal property alien to Chinese culture  Intellectual creations viewed as being in the public domain rather than belonging to individual, creativity considered as collectively benefiting community.  Invention and authorship not recognized as worthy of legal protection.

IP System and Development Process: Empirical Evidence from China It was not until the promulgation of national “open door” policy of 1979 that China realized the need to protect IP and the importance of the IP law.

1984: First Patent Law Enacted Background: Open Door Initiatives Reasons: attracting FDI & the pressure form the abroad Main Purpose: facilitate diffusion of new technology

1984: First Patent Law Enacted IP Infrastructure design and utility model kinds of patent allowed: invention, design and utility model exclude chemical, pharmaceutical, and alimentary or process inventions from patent coverage first to file shorter duration period SOEs cannot deal with their patents autonomously

1992: The First Amendment of Patent Law Background: Market- driven reform strategy to revitalize the nation through science, technology and education; sustainable development Reasons: Attracting high technology industries Pressure from USA Main Purpose: Facilitate the transformation and commercialization of science and technology achievements

1992: The First Amendment of Patent Law IP Infrastructure Patent coverage: food, beverages, flavoring, pharmaceutical products, and substances obtained by means of chemical processed Duration of invention extended Individual were allowed to own patents for invention-creations during working time if an agreement was made between individuals and employers. domestic priorities Narrowed the situations in which compulsory licenses may be granted

2000: The Second Amendment of Patent Law Background: Strengthen the indigenous innovation capability Anticipating of China’s accession on the WTO Reasons: Government initiates three strategies in order to strengthen the indigenous innovation capabilities: patent, standard and talent Comprehensive integration into global market Main Purpose: Fulfillment the requirements of the WTO Resolve the shortcomings of the existing system

2000: The Second Amendment of Patent Law IP Infrastructure: various new provisions to strengthen protection and enforcement of patent rights in China Simplification the examination process IP protection enhanced Standard for determining compensatory damages for patent infringement

2008: The Third Amendment of Patent Law Background: Building an Innovation-oriented Country The State Council issued the “National Intellectual Property Strategy Outline” (“IP Strategy”) Reasons: Neither by external pressure nor made in an attempt to conform with an international treaty, focus on China’s own ambitious Main Purpose: Implement the goals set forth in the IP Strategy

2008: The Third Amendment of Patent Law IP Infrastructure: Promote patent application Encourage patent exploitation Heighten the requirement for patentability Increase patent protection Address compulsory licensing Establish protection of genetic resources

Developing Performance

Economy performance:

Conclusion:  Correlation between China's economic development and the IP System - economic interests playing a more determinative role - IP system can support economic development - The role of IP system dependent on many other complementary factors

Conclusion: The Necessity of a flexible IP system: tailor the IP system to meet the local needs and circumstance. - IP System design - International collaboration