On Wednesday, January 15, 2020, the U.S. and China signed a partial trade deal deemed “Phase One.” Phase One includes a significant focus on Intellectual Property, which is addressed in Chapter 1. Specifically, Chapter 1 includes, among other things, Trade Secret misappropriation, pharmaceutical-related intellectual property, patents, piracy and counterfeiting on E-commerce platforms, manufacture and export of pirated and counterfeit goods, and bad faith trademarks.
Some key takeaways to which China has agreed include:
- Criminal penalties for trade secret misappropriation in China
- “Expeditious” resolution of pharmaceutical patent disputes in China
- “Effective and expeditious” action in China against online counterfeiting and patent infringement
- “Sustained and effective action [in China] to stop the manufacture and to block the distribution of pirated and counterfeit products”
- “adequate and effective protection and enforcement of trademark rights [in China], particularly against bad faith trademark registrations.”
This China trade deal will have a positive impact to protect IP and is certainly a step in the right direction. Admittedly, it does have teeth to a degree. However, it doesn’t have the authority most Americans would prefer. Ultimately, the implementation of the agreement is going to dictate whether substantial change will occur. Unfortunately, “each party shall determine” what is an appropriate method of implementation. The entirety of the implementation section under the Chapter 1 is below:
Each Party shall determine the appropriate method of implementing the provisions of this Agreement within its own system and practice. If necessary, each Party shall provide suggestions for the amendment of laws to its legislative body according to its domestic legislation procedure. Consistent with the Bilateral Evaluation and Dispute Resolution Chapter, each Party shall ensure that its obligations under this Agreement are fully implemented.
Within 30 working days after the date of entry into force of this Agreement, China will promulgate an Action Plan to strengthen intellectual property protection aimed at promoting its high-quality growth. This Action Plan shall include, but not be limited to, measures that China will take to implement its obligations under this Chapter and the date by which each measure will go into effect.https://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2020/01/15/US-China-Trade-Agreement_1-14-20.pdf
In other words, China, under its own volition, shall determine what constitutes appropriate action to meet its obligation. Here’s to hoping that China decides to make some substantial improvements to its IP policy under this agreement.