Private Enforcement of Intellectual Property Rights in China

Private Enforcement of Intellectual Property Rights in China

by Donald Clarke
April 1, 1999

This essay addresses the need to strengthen private and decentralized IPR enforcement in China, and urges international trade negotiators, as well as the Chinese, to focus more attention on courts and private enforcement mechanisms instead of on political and administrative methods of IPR protection.

It has become commonplace to note that although China over the last two decades has established a panoply of laws and institutions for the protection of intellectual property rights (IPR), these rights are not protected to the satisfaction of IPR holders, either domestic or foreign. As a result, it is no longer possible, if it ever was, for the Chinese government merely to point to the existence of legislation and enforcement bodies as proof that China is meeting some particular international standard. Something more is required: a reason to believe that new legislation or institutions will actually work as promised.

At present, it appears that foreign IPR holders are pressing their case for protection to the Chinese government more forcefully than are domestic IPR holders. But the forum in which foreign IPR holders tend to press their claims—government-to-government negotiations in which, for example, the Minister of Foreign Trade and Economic Cooperation squares off with the United States Trade Representative—is structurally biased toward producing only one kind of response: unequivocal enforcement action by a government agency.

The period between early 1995 and mid-1996 is a particularly good example of this process. In February 1995, the United States and China signed the Action Plan for Effective Protection and Enforcement of Intellectual Property Rights (the “1995 Action Plan”), [1] beginning an extensive series of bilateral negotiations concerning the enforcement of IPR. China’s failure to enforce the terms of the 1995 Action Plan led to the threat of sanctions by the United States in May 1996. China responded by making IPR enforcement part of a nationwide anti-crime campaign led by the Ministry of Public Security, thereby averting U.S. sanctions. Since 1996, largely satisfied with China’s progress in this area, the United States has taken a more multilateral approach to IPR enforcement. Joining with the European Union and Japan, the United States has pressed IPR concerns in its negotiations with China over accession to the World Trade Organization (WTO).

Although bilateral negotiations may be effective in the short term, as demonstrated by the 1995 Action Plan and subsequent discussions, such negotiations are unlikely to produce another kind of enforcement structure that arguably has greater long-term promise: a decentralized structure driven by individual actors in the legal system. Because such a system would not rely greatly on government funding or on government policy priorities at any given moment, it would be more likely to produce…

[1] See “China-United States: Agreement Regarding Intellectual Property Rights,” Feb. 26, 1995, U.S.-PRC, International Legal Materials, vol. 34 (1995), pp. 881 ff. (consisting of a letter from Wu Yi, China’s Minister of Foreign Trade and Economic Relations, to Michael Kantor, the United States Trade Representative, and the Annex, “Action Plan for Effective Protection and Enforcement of Intellectual Property Rights”).