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The 90th Professor Salon: Professor Liu Kongzhong and Some Trends in the Development of Intellectual Property Legal Systems in Asian Major Economies

On June 21st, 2017, the 90th Professor Salon was held in Mingde Law Building, with the theme of ¡°Some Trends in the Development of Intellectual Property Legal Systems in Asian Major Economies¡±. Professor Liu Kongzhong served as the speaker and Associate Professor Zhang Guangliang as the moderator. Professr Guo He, Professor Han Liyu, Professor Li Chen, Professor Wan Yong, Professor Mo Yuchuan, Professor Meng Yanbei, Associate Professor Wang Chunyan, Assistant Professor Ding Xiaodong, Assistant Professor Zhang Wenliang and more than 10 law students participated in the salon.

First of all, Associate Professor Zhang Guangliang introduced the theme of today¡¯s salon to the teachers and students, and presented the 90th Professor Salon¡¯s plaque to the speaker on behalf of Renmin Law School.

Professor Liu Kongzhong said the issue of intellectual property rights in Asia was worth studying, since it was a promising topic for international publication. For a country which was eager to have a greater voice in the world, a further understanding of Asian neighbors¡¯ systems was required. Asia had an important role in the global economy, which had the largest market and played as the engine of global economic growth. However Asia had also the lowest degree of integration, lacking of internal conflict resolution agencies, except ASEAN. In the United States, there was a saying that intellectual property rights contributed to the economic development. The more intellectual property rights, the better the economic development. Almost only a few countries in Asia were in line with this development model. Intellectual property was a good working language for Asia and could be an engine of Asian integration. In fact, EPO (European Patent Organization) played an important role in European reconstruction and helped overcome hatred after World War II. If our generation could lead the wave of intellectual property cooperation in Asia, it would be very helpful for peace and prosperity in Asia as a whole. Based on local interests and needs, Asia had also come to a time to review its intellectual property systems imposed by foreign countries. It was not unimaginable to set up its own trademark office, patent office and competition bureau in Asia. Liu encouraged students to actively study Asian intellectual property rights.

Professor Liu Kongzhong shared some intellectual property systems with Asian characteristics. First, there was a wide usage of penalties for intellectual property infringement. Second, Asian anti-monopoly laws had special provisions on intellectual property rights, which derived from Japanese antitrust law Article 21 (the exercise of intellectual property rights was not subject to the anti-monopoly law unconditionally). South Korea¡¯s anti-monopoly law Article 59 was exactly the same. Such legislation was not justified for legislative reasons. Taiwan¡¯s Fair Trade Act Article 45 had added the ¡°fair use of intellectual property rights¡± as a restriction, but had no definition of ¡°fair use¡±. China¡¯s anti-monopoly law Article 55 was the most progressive legislation. It recognized that intellectual property was a double-edged sword that may be abused, resulting in the exclusion and restriction of competition, which ought to be subject to antitrust laws.

Next, taking patent linkage as an example, Liu pointed out that Asian intellectual property should not blindly copy the United States. Patent linkage in the U.S. seemed to promote the generic drugs, but in essence to protect patented drugs. Because in the patent linkage system, if patent drug was about to expire, the first drug dealer converted it into generic drugs and provided stable supply was given six months of exclusive sale authority. However the declaration ought to notify the relevant patentee. Once the patentee said infringement existed, the FDA would automatically stop reviewing for 30 months. The two terms were uneven. Canada used to effectively establish its own generic industry through the issuance of a large number of compulsory licenses, but after bring in the patent linkage system, the country¡¯s generic industry had been destroyed. Japan had strictly no such thing as patent linkage but administrative guidance requirements. Whether the patent linkage met Asian requirements, Asia should have own answers through its own study.

Liu believed that Asian intellectual property provisions were not that different, since there were TRIPs requirements. But in the level of application, the differences were worth studying. It was very instructive to do horizontal research.

In case of compulsory licensing, Liu said that the exercise of compulsory licenses in Asia was very modest, in most cases relevant to national health. India and Philippines had only one compulsory license; Taiwan had three compulsory licenses; Malaysia had one compulsory license related to HIV; Thailand had seven drug-related compulsory licenses. Mandatory licensing may not be the loss of patent pharmaceutical companies. Prices went lower. The number of sales would increase substantially. In fact, it would bring a lot of income, so the patent pharmaceutical companies should adopt pricing strategy in line with the level of income in Asia.

Liu briefed on the situation of necessary patents in Asia. Japan¡¯s Tokyo Court ruled that it was an abuse of right for the standard necessary patentee to apply for an injunction after making a FRAND commitment, and set a ceiling for the license fee. South Korea¡¯s Fair Trade Commission imposed a 260 billion fine on Qualcomm. China¡¯s Development and Reform Commission also fined Qualcomm heavily. The outsiders thought there was risk of local protectionism in China as for the necessary patent issues, because the budget of local courts came from the provincial governments.

In terms of copyright, Liu talked about digital copyright. ISP was a direct infringement or indirect infringement was controversial. But the key lied in compensating the right holders in some way, so that they got the actual income. As for procedural copyright, what Asia needed most was an effective collective management mechanism so that this collective management mechanism could be used as an intermediary to communicate an infinite number of rights holders and users. Without such a mechanism, substantive rights were empty for the vast majority of Asian authors. In criminal law, the penalties for copyright infringement were not appropriate, and should be removed from the criminal law. Criminal action must be clear, but the boundary of copyright and the definition of infringement were vague, so copyright infringement was not suitable as the subject of criminal penalties, and in practice criminal penalties would become a means of extortion.

At the end of the speech, Professor Meng Yanbei, Associate Professor Wang Chunyan and Assistant Professor Ding Xiaodong raised problems. Professor Liu Kongzhong responded to questions one by one. The salon ended in the warm applause.

(Editor: CHEN Pei)

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