Development of Intellectual Property in the Reform Era

As the reform era began in 1978 and China began to open up to the outside world, intellectual property protection was in a parlous state. Despite the lack of formal functioning intellectual property laws, indeed the perceived lack of the entire concept of intellectual property, protection of intellectual property was soon prioritised in China’s dealings with its trade partners. For instance, the China-US Agreement on Trade Relations of 7 July 1979 committed China to implementing formal rules for intellectual property protection. In effect, this committed China to introducing laws and regulations that offered the same high level of protection as the equivalent laws in the US.

Although intellectual property laws took several years to be drafted and promulgated, new regulations were passed in 1978 to encourage innovation (Sit 1983, p. 497), which shows the early recognition by the central government of the importance of innovation to economic development. As a result, in the early 1980s, China did attempt to draft and adopt several intellectual property laws to replace the outdated provisional regulations passed in the 1950s. However, the introduction of such laws was no easy task, as they raised difficult ideological questions about the future of Chinese socialism. For example, advocates of a new patent law argued that reform was necessary to stimulate industrial innovation and foreign investment. Conversely, opponents of the new patent law argued that rewarding inventors was contrary to key socialist principles and that a liberal patent system “would allow foreign enterprises to control and dominate Chinese technology” (Bachner 1997, p. 449).

Consequently, the new statutes passed in the first years of the reform era reflected the Communist government’s unease with the introduction of private property rights and still had socialist principles at their core (Yu 2000, p. 36). Notwithstanding these ideological difficulties, China did push ahead with intellectual property reform, joining the World Intellectual Property Organisation (WIPO) in 1980 and the Paris Convention on Industrial Property in 1984, as well as passing the PRC Trademark Law in 1982 and the aforementioned PRC Patent Law in 1984. Copyright protection lagged behind protection for patents and trademarks, perhaps because industrial property was considered to be more commercially necessary to stimulate short-term economic development. The PRC Copyright Law was finally passed in 1990, although copyright had been mentioned in the 1986 General Principles of Civil Law (Bachner 1997, p. 444).

Despite establishing a comprehensive framework of statutory protection for intellectual property rights by the 1990s, China was still subject to heavy criticism from several trading partners, especially the US. Bilateral tensions concerning IP protection escalated in the mid-1990s and sanctions were threatened on several occasions before agreements were reached. Therefore, by the turn of the twenty-first century, there was a clear need for a new approach to intellectual property both within the international trading system and in China specifically to break the cycle of unilateral pressure and growing resentment. This alternative was provided by the accession of China to the WTO and the consequent obligation to comply with the TRIPS Agreement which is the focus of this book.