CHINA INTELLECTUAL PROPERTY LAW NEWSLETTER
Vol. 3 , No. 11 - September 10, 2002
TOPICS THIS ISSUE:
- Executives Discuss Promise and Pitfalls of Doing Business in China
- Chinese Courts to Hear Administrative Lawsuits Filed by Foreigners
- CAS Institute to Provide Products, Technology to the Public Free of Charge
- China's Trademark Law will Protect Foreign Brands
- Japan and China Team up to Fight Copyright Violations
Executives Discuss Promise and Pitfalls of Doing Business in China
Spurred by investment from multinational companies and recent entry into the World Trade Organization, China is emerging as the next global technology powerhouse -- and semiconductor manufacturing is no exception.
China has a solid infrastructure in chip assembly and packaging, but wafer processing is its emerging business with some analysts estimating that, in 10 years, there will be 20 foundries -- primarily in Shanghai, Tianjin and Beijing, but also in the cities of Ziamen, Shenzhen, Suzhou and Zhuhai, where high-tech parks and technology development zones have been established. There is still some controversy over how quickly China will achieve leading-edge capability.
China has 12% of the world's purchasing power, and in 2001, became the largest market for mobile phones and it has the third largest market for PCs, behind the United States and Japan. China currently imports 80% of its ICs. Labor costs in China are typically US $1/hr (compared with US $5.80/hr in Taiwan and US $7-8/hr in Singapore and Korea), and an engineer in China normally earns US $10,000 annually. China's manufacturing costs are 15% lower than Japan's or Taiwan's, and the regions offer many value-added tax advantages. Water and electricity costs also are lower in China, contributing to an overall reduction in manufacturing costs.
However, doing business in China is not without its downsides. Many sources cite the difficulty in protecting intellectual property (IP) in China as the primary drawback to expanding a business there. According to an article in the August issue of Electronic Business, 92% of the software purchased in China in 2001 was pirated. This "hampers development of the software industry, and research and development in general, in China," the article said.
It is expected that in 5 to 10 years, China's technological capability will be comparable to Japan's, so the priority becomes achieving IP protection and continually pursuing leading technology.
(Source: Semiconductor International)
Chinese Courts to Hear Administrative Lawsuits Filed by Foreigners
According to government sources, as of October 1 this year, foreign businesses or organizations will have the same rights as their Chinese counterparts in the filing of lawsuits against administrative decisions concerning international trade.
The Supreme People's Court recently issued China's first judicial explanation outlining how courts are to deal with administrative cases relating to international trade and World Trade Organization (WTO) rules. Li Guoguang, vice-president of the Supreme People's Court, said a judicial inquiry into administrative decisions related to international trade is very important for the effective implementation of WTO rules among its members.
According to WTO rules and China's commitments to the WTO, individuals or companies should be given the opportunity of judiciary review.
China has recently amended and implemented a number of laws and regulations, allowing for judicial review of administrative decisions on the trade of goods and services, intellectual property rights and foreign direct investment, Li said.
Mr. Li added that the measures are also expected to boost foreign investors' confidence and accelerate China's reform and opening-up.
The regulation is also applicable to administrative cases relating to other bilateral or multilateral international agreements on trade, investment and intellectual property rights that China has signed or participated in.
(Source: Xinhua)
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CAS Institute to Provide Products, Technology to the Public Free of Charge
The Chinese Academy of Sciences (CAS) has begun to provide products and technology to the public free of charge.
A leader in China's IT industry, the CAS's Computer Technology Institute (CTI) has recently launched its "Free Space" for the public initiative.
As part of the initiative, CAS will transfer intellectual property (IP) for firms both at home and overseas free of charge and provide cutting-edge products and technologies by directly creating brand names, for which IP rights will be applied, transfer patents permits with payment, establish shares in intellectual property rights and, transfer IP rights to small and medium-size firms free of charge.
CTI's "Free Space" initiative has already attracted much attention in China as well as from overseas.
(Source: Xinhua)
China's Trademark Law will Protect Foreign Brands
China's Amended Trademark Law, which goes into effect on September 15, will give Chinese and non-Chinese brands the same protection.
Currently, trademark enforcement authorities in China can only protect those trademarks that the government recognizes as "well known." To date, of the almost 200 trademarks that have been registered as famous and "well known", all of them belong to Chinese companies.
The Amended Trademark Law will now extend trademark protection to companies such as Nike, Sony, International Business Machines (IBM) and other foreign trademarks that are not officially recognized as "well know".
(Source: Bloomberg News)
Japan and China Team up to Fight Copyright Violations
Recently, the Japanese Agency for Cultural Affairs announced that Japan and China have agreed to hold regular intergovernmental meetings to tackle violations of Japanese copyrights in China.
The meetings will discuss policies to deter violations such as pirated CDs and videos, as well as ways to enhance cooperation and exchanges between the Japanese Society for Rights of Authors, Composers and Publishers and its counterpart in China, the agency said.
The first regular intergovernmental meeting has not yet been scheduled, but a Japan-China copyright symposium will be held in Beijing shortly to promote copyright consciousness among Chinese administrators and judicial personnel, agency officials said.
At present, Japanese companies are restricted in the remedies they can seek when it concerns pirated goods sold in China due to China's current Intellectual Property laws. Due to the lack of protection in the Chinese legal system, pirated goods sell for about 1-2% of the price of the authentic item.
With China's accession to the World Trade Organization last year, momentum has gathered in the country to protect intellectual rights through new and amended copyright, trademark and patent laws, the agency said.
(Source: Japan Economic Newswire)
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The China Intellectual Property Law Newsletter is intended to be used for news purposes only. It should not be taken as comprehensive legal advice, and Lehman, Lee & Xu will not be held responsible for any such reliance on its contents.
