By U.S. MISSION CHINA

Every year, we celebrate World IP Day by recognizing the significant role that Intellectual Property – IP – plays in shaping our world and affecting all areas of human life. This year’s World IP Day theme, IP and the Sustainable Development Goals: Building our common future with innovation and creativity, focuses on how IP can help meet the United Nations Sustainable Development Goals, including ensuring healthy lives and promoting well-being for all.

Protecting and enforcing intellectual property (IP) rights in China has been an essential part of our efforts to strengthen the global IP system. U.S. businesses operating in China regularly cite insufficient protection and enforcement of IP as a top concern, and the Office of the U.S. Trade Representative has placed China on its “priority watch” list for over a decade, detailing a long list of IP concerns reported by U.S. businesses operating in China. IP is especially important for the biopharmaceutical industry, which requires a substantial investment in research and development (R&D). Innovators in this critical sector depend on strong IP protection and enforcement to bring cutting-edge treatments and cures to patients throughout the world.

Strong IP rights improve the business case for a company to conduct R&D and launch its innovative medicine in a particular market. For example, a recent statistical evaluation of over 50 markets shows that those with regulatory data protection, which protects the proprietary clinical data developed by innovators required for marketing approval, have on average around three times as many innovative medicines available to patients compared to those without.

In recent years, The People’s Republic of China (PRC) has made some improvements to IP protections for medicines, such as establishing an early patent dispute resolution mechanism. However, these reforms are not yet complete. For example, before a new medicine can be used, it must go through a lengthy regulatory approval process which shortens the term of IP protection for the medicine. Countries compensate for this delay by extending the term of patent protection. The PRC agreed to implement a patent term extension system. Unfortunately, the PRC’s newly established patent term extension mechanism will deny the availability of patent term extension for medicines previously marketed outside of China. This is inconsistent with international norms, fails to meet its commitment, denies inventors fair and equitable market access, and reduces the incentives for medicines to be launched in China. Collectively, these factors impede patients’ access to crucial life-saving treatments.

The PRC’s requirement that drugs be marketed in China first also limits innovative medicine’s access to expedited approval programs that are intended to accelerate the development of novel and important medicines so that they reach patients faster. Additionally, the PRC has not yet established a regulatory data protection system that is aligned with its World Trade Organization (WTO) commitments and that would enhance access to innovative medications.

U.S. rights holders welcome commitments to strengthening IP protections for medicine and encourage the PRC to fully implement reforms and provide a level playing field for biopharmaceutical IP protections. The PRC’s action, or inaction, will have significant consequences in bringing cutting-edge medicines and cures to patients at a time when China’s aging population will rely more and more on access to life-saving treatments.

Weak protection of IP for biopharmaceuticals and other technologies remains a top issue for U.S. companies operating in China, whether it’s obstacles to protecting patents, insufficient deterrence to infringement, bad faith trademark filings, or misappropriation of trade secrets.

A recent survey put IP protection as one of the top three business concerns in China. This remains a major impediment in the U.S.-China economic relationship. Moreover, this is a concern held by other countries and rights holders around the world.

We also have serious concerns regarding the long-term reform of China’s IP system. In recent years, China has signaled that it may be moving away from a shared commitment to the marketplace of innovation created by the IP system. In several high-level policy statements, authorities in China have suggested that the IP system – and its constituent parts, including the IP office and courts – should serve the strategic needs of the nation, addressing less the market-driven demands of innovators and focusing more on using IP laws and mechanisms to eliminate perceived technology shortcomings and vulnerabilities. In short, China’s IP policymakers appear increasingly focused on who ultimately owns or controls the rights to these inventions, domestic vs. foreign.

At the same time, we see reduced transparency across the board, including in the granting and enforcement of IP rights. A transparent, predictable and non-discriminatory IP environment would not only encourage innovation and creativity at all levels through greater certainty and stability, but it would invite foreign inventors, creators and investors to collaborate more with their PRC partners.

As we have done for decades, the U.S. seeks to engage in good faith with the PRC government, for the benefit of rights holders, our economies, and our societies, at large. We will continue to strive to increase mutual understanding between our countries, and the interoperability of our two IP systems. We urge PRC authorities to commit to a higher standard of IP protection and to implement the necessary changes in the year ahead.

https://china.usembassy-china.org.cn/world-ip-day-statement-2/