Tianchu Gao is an IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

On April 20, 2022, China released a first-of-its-kind on a dispute over the alleged infringement of a non-fungible token (“NFT”) published on a trading platform.

The dispute arises from a copyrighted image known as “,” a cartoon depiction of a tiger receiving a vaccination. A third party released the image as an NFT and published it on the defendant’s NFT trading platform. The NFT image even has the original author’s watermark in the lower right corner. The official licensee of the image the trading platform for failing to protect its right of dissemination under copyright principles. It argued that the defendant, as the operator of a professional NFT platform, should conduct a preliminary review on the copyright of the NFT works published on its platform. The defendant, on the other hand, argued that its obligation was only to review the notification and delete suspicious works accordingly.

Like most jurisdictions in the world, China has yet to publish laws that deal with the trading of NFTs. Moreover, the NFT market in China is unique because the government is firmly opposed to cryptocurrency and has issued a regulatory document () in September 2021 to restrict its circulation in China. As a result, NFTs in China are digital commodities traded in traditional fiat currency. Examples of Chinese NFT markets include NFT China, Huanhe, and Jingtan. E-commerce platforms in the past, according to the , are not liable for copyright infringement unless they know or should know that the linked items are infringing copyright.

The court found the trading platform in this case liable for infringing the licensee’s right of transmission over an information network. The court also ordered the defendant to delete the infringing NFT works and compensate the licensee 4,000 RMB (about USD$600). Although the fine is nominal, it is a significant decision that requires NFT trading platforms to shoulder a greater duty of care to protect the copyrights of published works.

With the case as an important step, the Chinese legal system for online trading platforms is developing with greater emphasis in favor of copyright holders. With the power Chinese courts wield over China-based defendants, the lower litigation costs in China, as well as the relative ease of obtaining certain injunctive relief, China may become for multinational companies to enforce their copyrights.

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Serena Nath is an IPilogue Writer and a 2L JD candidate at Osgoode Hall Law School.

After a lengthy 22-year trademark battle with Chinese businessman Fang Yuzhou, London-born shoe company to use their name in China. Manolos have never been sold in mainland China because Yuzhou registered the trademark “Manolo & Blahnik” in 1999 in China. ��If Manolo Blahnik had attempted to sell their shoes in China, they would likely face legal consequences from Yuzhou and be unable to fight counterfeit products sold ��there. In the subsequent two decades, Manolo Blahnik repeatedly appealed the decision. However, these appeals were dismissed as the courts ruled that Manolo did not present sufficient evidence of adequate sales in mainland China prior to 2000. Resultantly, Manolo Blahnik has lost significant sales, as China is the fastest growing luxury market.

China’s Trademark System

Historically, China’s trademark system was based on a , meaning that the exclusive right of a trademark is awarded to the registrant who first applies. As such, no prior use, good faith, or intention for real use of the trademark is required to acquire the exclusive rights over a trademark. Here, although Yuzhou had no intention to use the registered trademark, because he had applied before Manolo Blahnik, and was hence awarded exclusive rights to use the trademark “Manolo & Blahnik.” This is in to other jurisdictions, such as Canada, where the exclusive right to a trademark is not necessarily awarded to the first registrant, and prior use or intention to use is considered. However, in 2019 amendments to China’s trademark legislation resulted in drastic changes for trademark disputes.��

The 2019 amendments focused on “bad-faith” trademark filings, specifically that “[a]pplications made in bad faith for trademark registrations that are not intended for use shall be rejected.” Additionally, trademark agencies are prohibited from representing clients if the agency is aware that it is a “bad-faith” filing, and the penalty for filing a “bad-faith” trademark is either warning or fine. Based on these amendments, then, the Supreme People’s Court of China finally ruled in Manolo Blahnik’s favour.

Future Implications of Trademark Legislation Amendments

The 2019 amendments will likely aid in fighting against “bad-faith” filings. However, as observed with the Manolo Blahnik case, the amendments are also likely to ensure increased brand protection for foreign entities who otherwise are not able to register trademarks due to the “first to file” rule. of the amendments resulting in victories for foreign companies include a lawsuit won by athletic apparel and footwear manufacturer New Balance, and another won by former NBA star Michael Jordan, where Chinese companies imitated and used these entities’ logos. Despite recent victories, some foreign companies still face an uphill battle. In 2021, Japanese retailer Muji against a “copycat” Chinese company. It is clear that further amendments are still necessary to overcome the “first to file” rule.

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Shawn��Dhue��is an��IPilogue��Writer and a 2L JD Candidate at Osgoode Hall Law School.��

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The US has started a worldwide complaint about China’s new legal strategy against intellectual property (IP) theft claims. Since the beginning of 2020, four claims of IP theft have gone to Chinese courts. Three of these claims were against some of China’s largest telecom companies: , , and . , one of Sweden’s most prominent tech corporations, brought a fourth claim against , a South Korean telecom company. These claims have ended with the Chinese courts granting the Asian telecom companies anti-suit injunctions against their complainants.

These developments came after Beijing promised to develop a better relationship with the US during their 2020 trade deal talks. Beijing said that it would “.” However, the US is now concerned that Chinese courts will not fulfill these promises.

The Decision that Turned Heads:

In September 2020, the Hubei Province Wuhan Intermediate People’s Court of the People’s Republic of China released the first decision in the four major cases. Xiaomi is the world’s largest smartphone producer, selling millions of devices since 2013. However, Xiaomi has been using a patent by InterDigital Inc. (InterDigital) to produce those devices. InterDigital, based in Delaware, USA, holds multiple patents for digital technology used in smartphones across the world.

When Xiaomi and InterDigital began to sever ties around July 2020, InterDigital for patent infringement. In retaliation, Xiaomi applied for an anti-suit injunction in Wuhan. The Wuhan Court granted Xiaomi an injunction, prohibiting InterDigital from taking Xiaomi to any court. The consequence of breaking this injunction is near $1 million per week for the Delaware-based company. The world, especially the US, was shocked as this decision was the first outcome for an IP theft claim between the US and China. Little did they know that this would become the first of many.

Competing Perspectives

The US is unsurprisingly the leading complainant about China’s legal strategy. In an article describing China’s anti-suit injunctions as a “new legal weapon,” Charles Boustany, Member of the Commission on the Theft of Intellectual Property in the US, states: “.” Importantly, the anti-suit injunction is neither new nor a legal strategy that China has created recently. commonly issue anti-suit injunctions. These injunctions help prevent identical intellectual property thefts in multiple jurisdictions.

Brian Pomper, a partner at Akin Gump Strauss Hauer & Feld LLP, says: “.” The Chinese Embassy in the US has not responded to these comments. Many are now looking to China to respond in the wake of these actions, which conflict with Beijing’s promises mentioned above in the 2020 US-China trade deal. Beijing made these promises on behalf of political trades, speaking on behalf of the Chinese economic market without considering what private entities may do in the future. Chinese courts seem to have different plans in mind to protect the country’s flourishing technology sector.

��Importance

Concluding the war between Xiaomi and InterDigital, the two companies have reached settlements. These settlements come after InterDigital brought claims to courts in and . Both courts agreed that Xiaomi’s anti-suit injunction was inconsistent with the law and . However, these settlements don’t change the outcome in the Wuhan court, nor the outcomes in the three other anti-suit injunction applications in different Chinese courts.

China has always departed from standard Western practices. Nevertheless, anti-suit injunctions are commonly used around the world. Therefore, the question remains of whether the US and UK using anti-suit injunctions are any different from China using them. It is important to recognize that a country may use these injunctions to protect against IP theft claims. However, if it is common in one jurisdiction, it should be allowed in others. The complaints are valid as it is a new strategy. But time is better spent thinking of new legal strategies against China’s “” than trying to ban a whole country from using a typical legal claim.

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Tiffany Wang is an IPilogue Writer, Intellectual Property Journal Editor, and a 2L JD Candidate at Osgoode Hall Law School.

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A could rejuvenate Gordon Moore’s famous law of electronics. Moore’s Law suggests that .

ASML, a Dutch company, pioneered an extreme ultraviolet (EUV) lithography machine capable of churning out microchips with unprecedented levels of precision. In their August 20 , the company indicated that its projects will . This technology allows

. ASML’s The ultra-precise light enables the machine to ��

Given microchips’ status in the , ASML’s technology carries significant weight. In fact, Washington has already

Does preventing the sale of the $150-million machine give the American economy a long-term advantage in the technological cold war? Perhaps not.

For one. Chips of 10 nm and above represent the dominant market share. Meanwhile, the Sino-American semiconductor industry accounts for approximately . It may be dangerous for Washington to lose sight of the forest for the trees.

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Tiffany Wang is an IPilogue Writer, IP Innovation Clinic Fellow, and a 2L JD Candidate at Osgoode Hall Law School.

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Chips are the hotspot in the current . By stymieing Huawei’s reach of international customers’ communications and leading the 5G race, the Biden administration has fronted a in chipmaking and research. Beijing, swimming against the current, has committed more than to high-tech developments, particularly in the semiconductor industry.

Samsung leads its competitors in the during the pandemic has led the Chinese government to invest in domestic semiconductor supply chains. and carved a local talent pool. Reducing dependency on outside markets is in part due to domestic demand since . Internal supply chain security will curb shortage risks for the country.

Production will not be a quagmire for Beijing. Their reservoir of . In fact, China’s share of the global semiconductor production capacity may rise from . .

President Xi positions China for . The restricted Huawei and other players in the Chinese market’s access to American technology. US , have pushed China to bite back in its For Beijing, technology and innovation self-sufficiency have inevitably turned into a matter of survival. Chinese firms .

As the net importer of semiconductors, . This figure continues to rise. In China’s race with the US, no one is safe. These two giants in the global economy threaten their mutual destruction. For one, the Chinese semiconductor industry considers leveraging rare earth minerals in this geopolitical war.

Who will win the semiconductor race—the eagle or the dragon? One thing remains certain: no one is backing down.

The post The Battle for Chips appeared first on IPOsgoode.

On August 6, 2020, Trump issued , prohibiting the use of TikTok in the U.S. after September 20, 2020. The order stated that TikTok collects sensitive personal data from Americans that could be used by the Chinese government and thus poses significant security threats to the U.S. On August 14, Trump issued , demanding that ByteDance “divest all interests and rights” in TikTok’s American operations. Trump’s executive orders spurred to purchase TikTok’s operations in the U.S.

The fight over TikTok’s ownership raises at least two legal concerns for Canada to consider. First, the issue of the state’s regulatory power and interventions by the government due to national security concerns is noteworthy. As two MIT researchers , internet-connected products that collect personal data across borders are ubiquitous. Invoking national security concerns as the main reason for banning ��trans-border products could quickly escalate into , which would not be in any country’s (or company’s) interest.

Due process is also a concern in this case. On August 24, 2020—soon after Trump’s executive order for divestiture—TikTok a lawsuit against the Trump administration, that its executive orders are unconstitutional. Notwithstanding its legal merits, the lawsuit alerts us to the necessity of scrutinizing a government’s regulatory discretion. On February 10, 2021, the Biden administration . Although the Biden administration did not completely call off political pressures on TikTok when it removed the immediate divestiture order imposed by the Trump administration, it gave the company some breathing room.

TikTok’s lawsuit against the Trump administration brings forth an important question about the regulatory relationship between the government and technology companies. Should a government�� be allowed to unilaterally evict a company out of its market without due process? Should Canada follow the model set by the former U.S. administration or embrace a different regulatory scheme?

The second important issue in this story is the rights of TikTok users. For many, TikTok has become more than a lighthearted means of entertainment. The platform has provided income for many users. India, a geopolitical rival of China, where TikTok also happened to be wildly popular, on June 29, 2020. On March 11, 2021, Pakistan banned TikTok for the second time on the grounds that . These bans bring forth concerns about freedom of speech infringements. India’s ban has also cost many Indian citizens, whose self-made videos attracted tens of thousands of views, . The question is, should governments be held liable for losses of income resulting from their banning of a popular app such as TikTok?

Canada may have to confront similar questions, especially regarding technological products made by Chinese companies. It is not too early to start identifying the best legal tools to regulate Canada’s technology market, .

Written by Jingcai Ying, IPilogue Contributing Writer and J.D. student at Osgoode Hall Law School (Class of 2023).

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Live-Stream Shopping: The Basics

At its most basic level, “live shopping” can be anything from a live-streamed fashion show to celebrities reviewing sponsored products on their social media platforms, with the goal to encourage viewers to purchase the same item in real time.�� Though numerous retailers have successfully implemented live shopping tactics into their business models, few have a fully developed “live shopping platform” or sophisticated point of sale mechanisms to support their live shopping models.

A key differentiating factor between live shopping platforms and more traditional e-commerce models is the highly interactive nature of live commerce content. Think of a Facebook or Instagram live video where your favourite influencer is showcasing their newest purchase or promoting a product. Now turn that into an entire platform with a fully developed sale system, where hundreds of “shoppers” are shopping for you, showcasing how the items are styled and fit, and responding to questions you may have about the product, all live. Furthermore, live-streaming shopping platforms provide the authenticity that buyers crave. With purchases being promoted and made in real time without video editing or Photoshopping, buyers can feel more comfortable making a purchase given that that they are seeing exactly what they will get.

Many technology start-ups have invested in research and development to establish a business model that brings live shopping as a platform directly to consumers. For instance, Toronto start-up, , is a first-mover in this area. Their shoppers “attend exclusive shopping events, sample sales and warehouse deals, and livestream [their] best finds”. With ShopThing’s point of sale platform, purchasing the deal of your dreams is a simple “swipe up”.

For the buyer, live shopping is fairly simple. For the streamer, the seller, and the platform, however, various legal considerations may arise.

The Streamers, the Sellers, and the Platform: Who are they?

Aside from the purchasers, there are three major parties that may be involved in a live-stream shopping transaction: the platform, the seller, and the streamer. When looking at the relationship between the streamer and the platform, the streamers are likely required to , as well as to potentially sign an exclusivity agreement. Depending on the arrangement, the streamer may become engaged with the platform as an employee or independent contractor. When looking at the role of the seller, it is often dependent on the type of platform. With the , sellers on live-streaming platforms can often be considered a “business operator on the platform”, and the platform an “e-commerce platform operator”. The relationship between the seller and the streamer can be slightly more nuanced, with the seller potentially being a streamer and promoting their own products, or the seller engaging an independent streamer to sell their products in which joint liability may arise under certain conditions.

Relevant Legal Frameworks in Canada

Though live-stream shopping is a novel form of commerce, it is easy to see where legal issues may arise. Canada’s current advertising, marketing, e-commerce, privacy, data protection, and intellectual property laws provide a relevant legal framework for how to address the legal considerations of live commerce. However, as the market for live-shopping continues to grow within Canada, it will be interesting to see how the current regime may be adapted or interpreted for issues arising in relation to live commerce.

Advertising, Marketing, and E-Commerce Laws

The federal statute regulating advertising and marketing in Canada is the��. The Competition Act applies to both business and consumer advertising and marketing, with the Commissioner of Competition being the primary authority for enforcing the legislation. The Commissioner heads the Competition Bureau, and investigates both criminal and civil matters under the Act.

In Ontario, the administration and enforcement of consumer protection laws is the Ministry of Consumer Services, acting through the Minister of Consumer Services and the Director under the Consumer Protection Act. ��Generally, consumer protection statutes include provisions relating to unfair practices, such as deceptive or unconscionable representations, including false advertising, cancellation or cooling-off periods for goods and services sold, unsolicited goods, and gift cards. In the circumstances of live commerce, unfair practices and deceptive representations may be of increased relevance. Additionally, the further outlines implications of selling online, specifically setting considerations of commercial transactions conducted on the Internet, electronic banking and payment systems, trade in digitized goods and services, and business-to-business exchange of data.

In addition to legislation, (ASC) is the advertising industry's self-regulatory body, maintaining the Canadian Code of Advertising Standards. Through filing a complaint with the ASC, consumers can report advertisers who violate the ASC Code.

Many live-streaming platforms have gained success through providing a live commerce platform exclusively for designer sales.�� However, the Competition Act sets out volume tests to that express or implied savings claims can be substantiated against the “ordinary” or “regular” price. Therefore, it is essential to obtain adequate testing when making comparative claims with respect to pricing. This may be more difficult for live-streaming platforms, given that streamers may not be aware of the products, sales, and original prices of the products until they have already gone live. ��

Privacy and Data Protection Laws

The (PIPEDA) applies to businesses and addresses the collection, use or disclosure of personal information in the course of commercial activities. PIPEDA establishes that the personal information collected by businesses must be collected for identifiable purposes and with consent, as well as used and disclosed for the limited purposes for which it was collected. With multiple players involved in the business process of live commerce platforms, and increasing development of the technology driving the sales interface of these platforms, greater care must be taken to ensure that the requirements established by PIPEDA are met.

Intellectual Property Laws

Various forms of intellectual property laws may be relevant with live-streaming platforms, including trademark, copyright, patents, and trade secrets. Whenever you are sharing your business and ideas on the Internet, there are measures that may be taken to protect your own intellectual property. However, in the case of live-streaming commerce, it is especially important that steps are taken by the live-streaming platform and its relevant players to minimize the risk of infringing on the intellectual property rights of others.

Before sharing content or materials on your live-streaming platform, it may be :

• Whether you have the right to use or copy the materials, such as images of products, on your platform
• If the material you are sharing is trademark or copyright protected, ensuring you have obtained permission for use
• Whether you have engaged in any Internet-related agreements with web developers (or the like) that outline prohibited use of content.

What’s Next for Live Commerce in Canada?

These are just a few of the potential legal considerations that may be relevant with the rise of live commerce in Canada. Issues relating to contracting online, browsewrap and clickwrap contracts, multi-jurisdictional sales, and other matters, can develop as this new means of shopping continues to gain traction in North America. Though live-streaming shopping is a newer concept, it is possible for the seller, the streamer and the platform to still find their places under existing regimes. However, it is likely that questions and concerns with respect to the various implications that this new form of shopping can have on e-commerce, intellectual property, and consumer protection laws, both domestically and globally, will continue to surface as live commerce becomes more mainstream.

Written by Alessia Monastero, IPilogue Senior Editor and Osgoode JD alumni.

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There are multiple reasons for this growth. It is caused partly by China’s evolution from [iii], and partly by China’s role as a leader in many cutting-edge technologies, such as [iv] One of the largest drivers of Chinese patent filing, however, is the Chinese government’s subsidy program, the “”[v] initiative, which provides funding designed to encourage Chinese innovation. While China has experienced large increases in innovation overall, in practice these subsidies have primarily just increased the s[vi], while doing a much poorer job of stimulating research and development.

These subsidies have encouraged a large number of low-quality patent applications, particularly in the subsets of Chinese patents that are subject to a lower degree of scrutiny before grant. As stated by Wang Xiang, the head of Orrick’s China IP practice: “”[vii].

China’s “patent first, innovate later” culture is shown in [viii], both domestically and internationally. The patents obtained by Chinese industry are also maintained at a much lower rate than those from comparable nations, an indicator that they are not particularly valuable.��

In recent years, China has also made these subsidies available for [ix]. This has led to a large number of patent filings abroad and has made China the fifth largest international patent filer. Many of the applications that are filed internationally are the same low-quality applications that are filed within China, which presents a problem to patent examiners globally, as these applications must be examined with the full scrutiny of any other application.

The question becomes, what should the IP offices of the world, SIPO included, do about the volume of low-quality applications that are being produced? These applications are being submitted to patent offices that are generally facing [x] in unexamined patent applications. It will be difficult for patent offices to review the large number of Chinese applications, and these applications will add to the existent patent backlog. Backlog reduces the amount of time and effort that an examiner can spend on a given application and [xi].

In my opinion, the problems associated with this over-burdening volume of poor-quality patent applications can be resolved through worldwide[xii].[xiii] is software that learns how to complete tasks which have traditionally required the use of human thought. It can examine the data given to human decisions makers, observe the outcome of these decisions, and create “rules” with which to make its own decisions. Patent examination produces a large volume of decision-making data, .[xiv]

Given the high cost of an examiner’s time, the large number of subsidized applications being produced by Chinese industry should act as a motivator for further adoption of artificial intelligence by the world’s patent offices. Artificial intelligence could be [xv] that could help regulate the massive number of applications. It could be used to determine the field of technology that an application falls into, if an application describes patentable subject matter, if it overlaps with prior art, and even if it meets a country’s drafting requirements. And, because of scalability, artificial intelligence can process a large number of applications within a much shorter period of time than a human examiner, at a lower cost.

Adapting this new technology would better enable patent offices worldwide to reward Chinese innovators for legitimate contributions to technology, while also managing the worst of the mass filing conundrum.

Written by Keenan Fast, Osgoode JD Candidate, enrolled in Professors D’Agostino and Vaver 2019/2020 IP & Technology Law Intensive Program at Osgoode Hall Law School. As part of the course requirements, students were asked to write a blog on a topic of their choice.

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[i]Jane Croft, “China plays catch-up with Europe and US in patents filing race”, Financial Times (9 July 2019), online: <https://www.ft.com/content/8ecf7464-8d05-11e9-b8cb-26a9caa9d67b>

[ii] “World Intellectual Property Organization”, WIPO Intellectual Property Statistics Data Center, online: <https://www3.wipo.int/ipstats/>

[iii] Michael C. Wenderoth, “China Is Innovating Faster Than You Imagine”, Forbes (11 April 2018), online: <https://www.forbes.com/sites/michaelcwenderoth/2018/04/11/china-is-innovating-faster-than-you-imagine/#3eb8f425273d>

[iv] Louis Columbus, “How China Is Dominating Artificial Intelligence”, Forbes (18 December 2018), online: <https://www.forbes.com/sites/louiscolumbus/2018/12/16/how-china-is-dominating-artificial-intelligence/#4949444d2b2f>

[v] “Premier Li on ‘Made in China 2025’”, The State Council of the People's Republic of China, online: <http://english.www.gov.cn/premier/news/2017/08/10/content_281475781726536.htm>

[vi] Lulu Yilun Chen, “China Claims More Patents Than Any Country—Most Are Worthless”, Bloomberg (26 September 2018), online: <https://www.bloomberg.com/news/articles/2018-09-26/china-claims-more-patents-than-any-country-most-are-worthless>

[vii] Ibid

[viii] Ibid

[ix] “Notice on Printing and Distributing the Measures for the Administration of Funding for Foreign Patent Special Funds”, The Central People's Government of the People's Republic of China (31 May 2012), online: <http://www.gov.cn/zwgk/2012-05/31/content_2149501.htm>

[x] Patent Backlogs and Mutual Recognition, London Economics (January 2010) at 59, online: <https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/328678/p-backlog-report.Pdf>

[xi] Mark Schultz & Kevin Madigan, “The Long Wait for Innovation: The Global Patent Pendency Problem Center for the Protection of Intellectual Property”, Center for the Protection of Intellectual Property (2016) at 5, online: <https://sls.gmu.edu/cpip/wp-content/uploads/sites/31/2016/10/Schultz-Madigan-The-Long-Wait-for-Innovation-The-Global-Patent-Pendency-Problem.pdf>

[xii] “Index of AI initiatives in IP offices”, WIPO online: <https://www.wipo.int/about-ip/en/artificial_intelligence/search.jsp>

[xiii]BJ Copeland, “Artificial intelligence”, Encyclopædia Britannica online: <https://www.britannica.com/technology/artificial-intelligence>

[xiv] Steve Lohr, “The Age of Big Data”, The New 91��ɫ Times, (11 February 2012), online: <https://www.nytimes.com/2012/02/12/sunday-review/big-datas-impact-in-the-world.html>

[xv] Tabrez Y Ebrahim, “Automation & Predictive Analytics in Patent Prosecution: USPTO Implication & Policy” (2019) 35 Ga St U L Rev at 57 online <https://readingroom.law.gsu.edu/cgi/viewcontent.cgi?article=2978&context=gsulr>

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A ) Gilead's Problem

The Drug & The Patents

Viread is a drug that is used to and (in combination with other anti-retrovirals) has also been used to . ��The Chinese patents ( & ) were each filed in 2004 and 2005 respectively and have been challenged�� by Shanghai-based generic manufacturer .

The Validity Challenge

Aurisco has argued that the Viread patents lack novelty because the active ingredient () was disclosed by Czech scientist Antonin Holy when he filed for a US patent for the compound in . Thus the information contained therein is already in the public domain contravening of the . ��The Patent Review Board appears to have accepted�� this argument and has cancelled the Viread patent.

��This comes as a blow to US-based Gilead.�� In recent years, its Viread patent has struggled to fend off opposition in developing markets -- having been rejected in����and��, and subjected to compulsory licencing in��. ��Aurisco's chairman, Peng Zhi'en, was recently ��to have said that he expects the Chinese market to amount to��CNY 1billion even with the onset of locally produced generics sold at one-twentieth of the price of Viread.

B) Chinese Context

The Social Context

The Chinese government's push to make Viread more readily available likely reflects the .�� China is home to over (one-third of the world total) with the cost of treatment breaching CNY100 billion (160 million USD) annually. The incidence of HIV/AIDS is also , causing 11,575 deaths in China in 2012. Given that ��from the last year, it is not surprising that the Chinese government is seeking out ways to lower the cost of treating these diseases.

It is worth noting however that in 2011 Gilead made Viread and other anti-retrovirals to developing economies through the ��(MPP). While China was not party to the MPP at the time -- it has since been admitted and appears to have .

The Legal Context

While SIPO’s Patent Review Board (PRB) is the highest level of appeal in the Chinese patent system, like most other countries, Gilead can sue the PRB as a matter of administrative law at one of .�� If this is unsuccessful, Gilead can appeal to the High People’s Court for a final ruling.�� This was the strategy employed by ��in 2007 to ��reinstate its patent for Viagra.

But would Gilead succeed if it challenged SIPO in the Chinese courts today?�� And what does Aurisco’s invalidation strategy imply about the new compulsory licensing scheme? ��I sat down with Hong Kong University’s ��to discuss these and other issues.

C) Policy Discussion with Dr. Li

Beatrice Sze:�� Given your research on patents and their affect on the Chinese biotech and pharma industries, in your opinion, would Gilead succeed if they sued today? Do you think it could pull a "Pfizer”?

Dr. Li:�� Without doing a validity analysis of the Viread patents it’s hard to say.�� However, technical merits of the patents aside, I would say that the social, political, and economic environment is tougher today for Gilead than it was for Pfizer seven years ago.

The year before the People’s High Court released its decision on Viagra, the State Council issued its . If you look at China’s IP goals for the next 5 years (Beatrice: of the English version provided) you will see that --first and foremost-- the government wants to cultivate domestic IP. ��In other words, they are looking to foster Chinese innovation.

Moreover, Gilead's Viread drug faces a particularly difficult social challenge. ��However one might feel about the validity of the patent, we are talking about the treatment for a disease that– as you pointed out – stands to cripple the Chinese healthcare system. ��Regardless of how one might feel about protecting the rights of the patent holder, when a state is responsible for providing healthcare to a third of the world’s chronic Hepatitis B sufferers one can see why it might want to cultivate a steady supply of domestically controlled medicine for its people.

Beatrice Sze:�� Where is compulsory licensing in this story? Why do you think Aurisco went straight for infringement-invalidation rather than design-around then compulsory licensing? ��

Dr. Li: ��The reality is the Chinese government (not even during the height of SARS outbreak in 2003). ��For Chinese generic drug manufacturers, the cost of infringement-then-invalidation is currently much lower than manufacturing and applying for a compulsory license.

Part of the problem is that the process is still very complicated and it takes about three years to go from application to approval by the state. ��Even after approval, companies will still have to pay licensing fees. ��So Aurisco probably adopted this strategy to maximize its drug's time on the market while minimizing its legal costs.

That said, Chinese language news sources indicate that Aurisco plans to apply for compulsory licensing after the patent has been invalidated. ��If it does so, it will be interesting to see how quickly the license is granted given the importance of this drug to the Chinese market and Beijing's current IP Strategy.

Beatrice Sze: What would you say to foreign innovators looking to enter China's pharmaceutical market?

Dr. Li: ��To foreign innovators looking to establish pharmaceutical IPRs in China I would say: do not be discouraged. ��You may experience more resistance from SIPO given Beijing's current IP Strategy but if the Viagra case teaches us anything, it is that the Chinese government can be persuaded to honor patents if they are well-drafted and cover truly novel and inventive subject matter.

Beatrice Sze:��So it sounds like good advocacy made on behalf of good patents can still succeed in the Chinese legal system.

Dr. Li:����Yes, I'd agree with that statement.

Beatrice Sze: Thank you for your time, Dr. Li.��

Dr. Li:�� A pleasure, as always.

Dr. Yahong Li is an Associate Professor and Deputy Head at the Department of Law at HKU. She is also an Associate Director at HKU Technology Transfer Office.���� Read more of Dr. Li ‘s research in her book “” (Edward Elgar, 2010).

Beatrice Sze is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

With thanks to HKU's Chi Shan for her assistance in searching for primary sources at SIPO and within the Chinese court system.
Unfortunately at this time not all courts decisions or patent prosecution rulings are made publicly available by the PROC.

The post China’s Bitter Medicine for Gilead: SIPO Cancels Viread Patent appeared first on IPOsgoode.

We are pleased to release the English translation of Guiding Case No. 20, the first Guiding Case on intellectual property: Shenzhen Siruiman Fine Chemicals Co., Ltd. v. Shenzhen Kengzi Water Supply Co., Ltd. and Shenzhen Kangtailan Water Treatment Equipment Co., Ltd., An Invention Patent Infringement Dispute (available at ). The Supreme People’s Court rendered the original judgment on December 20, 2011, revoking the first and second instance judgments rendered by the Intermediate People’s Court of Shenzhen Municipality, Guangdong Province, and the Higher People’s Court of Guangdong Province, respectively.

Guiding Case No. 20 is among the newest and largest batch of Guiding Cases, Guiding Cases Nos. 17 through 22, released by the Supreme People’s Court to date. We have posted the Chinese versions of all of the Guiding Cases part of this latest batch on our website at . We will release the English versions of the rest of the batch soon.

The CGCP Team works hard to produce high-quality English translations of the Guiding Cases and we are excited to present this first Guiding Case on intellectual property. Let us know how the CGCP has been doing by sending your views to contactcgcp@law.stanford.edu. We would love to hear your feedback.

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[The original can be found on the .]

The post 1st Guiding Case on Intellectual Property Now Available in English! appeared first on IPOsgoode.