China's Intellectual Property Laws Before and After WTO Accession

Introduction

The 21st century has been called the "Century of Asia," and most authorities agree that China will lead the way in terms of economic growth and political influence. China's economic performance in recent years appears to bear these predictions out, but a number of challenges remain that must be resolved if China is to completely achieve its economic development goals. Among these challenges is the need to ensure that intellectual property rights are protected by the nation's legal system. Although a number of significant reforms have been implemented following China's accession to the World Trade Organization in 2001, infringements of intellectual property rights are still commonplace, and these infringements continue to hamper foreign investment and domestic research and development efforts.

To gain additional insights into what has been done and what remains to be done in this area, this study provides a review of the relevant peer-reviewed, scholarly, and nongovernmental organizational literature concerning intellectual property rights in China and how these have changed since the nation's accession to the World Trade Organization. A summary of the research and important findings are presented in the conclusion.

Background and Overview

By most accounts, things are changing for the better in China, but many observers suggest the government still has a long way to go in harmonizing its intellectual property laws. Nevertheless, the main consensus that emerges from the research is reflected in Long's observation that "The People's Republic of China has made considerable progress in developing a strong intellectual property rights regime since the early 1970s. The leadership of the Chinese Communist Party has publicly acknowledged the need to develop a 'knowledge economy' based on a strong system of intellectual property rights" (2000, p. 11). The impressive economic development that has taken place in China in recent years is also well documented (Bhalla, 2008; Lo & Everett, 2001; Chang, 2004; Leppman, 2005; Li, 2003; Gamer, 2005). A great deal of this economic development has been fueled in large part by growing investments from the West, especially the United States and the European Union (Chua, 2006). Generally speaking, though, China remains in a state of transition from its previous state-controlled system of administration to one that embraces respect for the rule of law (Ghadar, 2006; Liao, 1999; Kennedy, 2000).

To facilitate the transition from a state-controlled economy to one more characteristic of a Western-style free market, the Chinese judicial system has undergone a series of reforms (An, 2009), but the process has been slow, and foreign investors frequently turn to alternative dispute resolution procedures to resolve disputes concerning intellectual property rights as a result (Chua, 2006). Since the early 1990s, China has implemented a broad array of initiatives to reform its judicial system and to increase the transparency of its judicial proceedings. According to Chua, "Many foreign investors bring valuable trademarks, designs, or business processes into China with the hope of applying the same in conjunction with a lower-cost business proposition. Nevertheless, the protection of intellectual property rights is an issue that remains to be resolved satisfactorily, particularly as infringements continue to be widespread" (2006, p. 134). Other authorities are more optimistic about China's efforts to reform its intellectual property laws — some even verging on the Panglossian in their descriptions of the significant steps taken by the Chinese government in recent years — while others are more reserved in their assessments, and these issues are discussed further below.