Table of Contents: Mar-Apr 2009 China Business Review

8/14/2019 Table of Contents: Mar-Apr 2009 China Business Review

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China BusinessChina BusinessReviewReview

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US$22 /HK$220

M a r c h A p r i l 2 0 0 9

Taking Advantage of the Downturn Luxury Goods

Transfer Pricing Customs Compliance

Protect Your Ideas:

OutsmartingIPR Infringers

Patent Law RevisionsEnforcement RoutesLicensing Your IPR
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M a r c h A p r i l 2 0 0 9 V o l u m e 3 6 N u m b e r 2

Focus: Intellectual PropertyTackling Intellectual Property Infringement in China 17Companies can combat intellectual property rights (IPR) infringementthrough administrative or judicial channels, both of which have pros and cons.Ryan Ong

Interview: Mark Cohen on Intellectual Property 22The former senior intellectual property attach at the US Embassy in Beijing discusses key issues facing companies in China.

A New Era of Intellectual Property Rights Licensing 26Companies should be aware of recent changes to Chinas IPR enforcement regime, especially those related totroubling compulsory licensing provisions, patent pools, and package licenses.Esther H. Lim and Srikala P. Atluri

Changes to Chinas Patent Law and Practice 30Chinas revised Patent Law adopts some common international standards but leaves room for improvement.Thomas T. Moga

China Data: Patents, Enforcement, and Seizures 34

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The China Business Reviewwelcomes articles from outside contributors. Manuscriptssubmitted for consideration should be sent to the editor at [email protected]. TheUS-China Business Council obtains licenses for all rights to articles and artwork publishedin the CBR. Articles or artwork published in the CBR may be reprinted or reproducedonly with the written permission of the US-China Business Council. Articles in the CBRdo not reflect US-China Business Council policy, unless indicated.

The China Business Review(ISSN 0163-7169) is published bimonthly by the US-ChinaBusiness Council, 1818 N Street NW, Suite 200, Washington DC 20036-2470, USA(Tel: 202-429-0340), a nonprofit organization incorporated under the laws of the District

of Columbia. Periodicals postage paid at Washington, DC, and additional mailing offices.Postmaster, please send address changes to the China Business Review, 1818 N Street NW,Suite 200, Washington DC 20036-2470, USA.(c)The US-China Business Council, 2009.All rights reserved.

Annual Subscription Rates: $135 US/Canada and $177 international, print only; $156US/Canada and $208 international, print and online; $105 online only. Single copy is-sues: $22, $35 airmail; issues over 1 yr: $15, $20 airmail. DC residents add 5.75% salestax. Subscriptions to the China Business Revieware not deductible as charitable contribu-tions for Federal income tax purposes.

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48Cover design by Jason Pym

FeaturesL U X U R Y G O O D S

Still Strong Sellers 36Chinas luxury goods sales may perform well despite bear-market conditions.Ben Cavender and Shaun Rein

TA X

Chinas Special Tax Adjustment Regulations: An Action Plan 44New measures change the global transfer pricing landscape significantly.Glenn DeSouza

C U S T O M S

Ramping Up Customs Compliance Reviews 48PRC Customs is stepping up enforcement, and companies mustensure that they fully comply with the law.Tony Kerr

DepartmentsLetter from the Editor 7

Short Takes 8

China Conference Calendar 10

China Market Intelligence 12China Tackles Economic Crisis with Fiscal Stimulus, Consumption Plans

USCBC Bulletin 14

Letter from Beijing 16TransitionsRobert Poole

Commentary 40Converting the Downturn to AdvantageFrancis Bassolino, Michael Deering, and Lyuba Tovbina

China Deals 52

Opportunities 55News of China-related educational, cultural, and charitable projects

The exchange rate used throughout this issue is the Peoples Bank of China rate fromJanuary 15, 2009: 6.8392 = $1.

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How Microsoft handles its IP in China

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DALLAS & CHICAGO

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TIANJIN(Headquarters)

Tel:+86-22-25202676



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6 MarchApril 2009 chinabusinessreview.com

Editor Virginia A. HulmeAssociate Editor Paula M. MillerAssistant Editors Arie Eernisse, Daniel StrouhalBusiness Manager Jesse MarthAdministrative Assistant Mattie StewardArt Direction & Production Jon Howard/JHDesign, Inc.Research Assistant Nicholas Chu

Inquiries and Subscriptions: [email protected]:www.chinabusinessreview.comReprints: For bulk custom reprints (min. 100),call 1-800-960-1195Online store:www.uschina.org/store

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chinabusinessreview.com MarchApril 2009 7

This year, the China Business Reviews (CBR)35th anniversary, we are looking back at themagazines first year. The MarchApril 1974 issuefeatured articles on Sino-Japanese cooperation,the Fourth Five-Year Plan (197175), disputeresolution, agriculture, and negotiating forbristles, as well as a table of top US imports andexports from China. (In case you were wonderingwhy bristles?, materials of animal origin[primarily bristles] was the number-two import

from China in 1973.) The issue also carried practical information, suchas postage rates to China, rail and airline schedules, and English-language broadcasts received in Hong Kong and Guangzhou.

Most relevant to this issue are the concerns about intellectual property(IP) raised in the article on Sino-Japanese cooperation:

There is also the question of patent rights. China is not party tothe Paris Convention to protect industrial properties. Nevertheless,Peking has indicated readiness to negotiate a separate agreement ontrademarks alone with Japan. But little progress has so far been

made.......There have been cases...in which the Chinese were discoveredto have copied machinery imported from Japan.... [S]ome Japanesemanufacturers are afraid the industrial techniques they supply toChina may be exported to third countries contrary to originalagreements. China has a law which encourages inventions andresearch. But under this law, most of the benefits of these inventionsand profitable research go to society. Incentives for individuals are verylimited. However, China appears to be prepared to pay for theresearch and development efforts achieved by foreign corporations andfor patented industrial techniques. Between 10 percent and 20percent of payments for nine petrochemical plants sold by Japan toChina last year represented compensation for patent rights.

Japanese businessmen have discovered it is possible to obtainpayment for patent rights involved in each plant built in China or toconclude long-term royalty agreements of five to seven years for use ofpatent rights. Such arrangements usually contain provisions thattechnological secrets must not be disclosed to third parties. However,Japan and other advanced industrial countries would like China tojoin international arrangements for protection of industrial propertyrights.

In the intervening years, the protection of IP in China has improvedimmensely, but some concerns remain. China has signed the ParisConvention and many other international IP agreements. It has alsobuilt a legal framework to protect IP. On the other hand, enforcement

remains weak, and companies still worry about bringing theirproprietary technologies to China. In this issue, we look at the currentstate of IP rights in China with articles on the various options fordealing with IP violations, recent revisions to the Patent Law, provisionsin the Antimonopoly Law that touch on IP, and an interview with theformer IP attach at the US Embassy in Beijing.

Virginia Hulme

Letter from the Editor

Table of Contents: Mar-Apr 2009 China Business Review

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