In February 2010 the Directorate General for Trade of the European Commission published a report of a meeting which its representative Luc DeVigne held in Beijing in 2005.

At that time China had launched a “National IP Strategy” in whose framework it was involving thousands of scholars and stakeholders, also from outside China, in discussions about needs for reforms in the current patent law, which led to a major revision of the law in 2008. This revision prescribed narrow claim interpretations and compulsory licenses for patents used in standards and even for insufficiently used patents.

At the meeting reported about here, the representatives of the European Commission seem to argue unilaterally in favor of unfettered patent enforcement even in cases where the Chinese law provides for restrictions and exemptions.

Of particularly interest to us is the section “IP & Competition”, which says that DG Trade is pushing China to revise its law so as to allow individual patent holders to collect royalties for the use of “open standards”.

In fields such as telecommunications or electronic home appliances, where standardization is a necessity, standards usually include technologies protected by intellectual property rights. Currently, the Chinese companies using technologies detained by European companies are not allowed to enter into negotiations on the amount of royalties due to the latter, when they use their essential patents in the framework of open standards. The situation is highly detrimental to European companies and their complaint has been reflected in the European Chamber of Commerce in China (EUCCC) - IPR Working Group’s Position Paper 2005. The Commission therefore urged the Chinese government to take action in order to ensure that those royalties are duly paid by Chinese companies. Moreover, the EU side marked its interest in the ongoing adoption of an Anti-Unfair Competition Law and an Anti-Monopoly Law in China, both including some aspects related to intellectual property. The Commission and the European Chamber of Commerce in China were consulted on those texts, in particular on points related to IP, and wish to be kept informed of future developments on them. The Anti-Monopoly Law is now at the stage of being submitted to the State Council, before going to the National People’s Congress for adoption. A new draft of the Anti-Unfair Competition will be available soon.

It is to be suspected that the new rules, which have meanwhile come out, were quite disappointing to the Eurepean Commission’s Trade Representative.

Maybe someone in the European Parliament could ask for clarifications.

Resources

• Source document published by DG Trade in February 2010
• The website of the European Chamber of Commerce in China, whose IPR Working Group provided the input to the Commission, is currently, as of 2010-10-18 not reachable.
• Jan Wildeboer: Open Standards Redefined
• Glyn Moody @ Computerworld UK: Time to Learn from China on Open Standards
• IPR Asia – website of the IPR Working Group of the European Chamber of Commerce in China (EUCCC), funded by the European Union
• European Chamber of Commerce in China
• US: the US Trade Representative plays a similar role as DG Trade
• EU