China to restructure the State Intellectual Property Office

During a recent annual meeting, China’s highest legislature, the National People’s Congress approved a sweeping government restructuring plan. As part of the plan, the State Intellectual Property Office (SIPO), which so far acts as a patent office only, will additionally incorporate the functions of managing trademarks and geographical indications of origin (GIs), which are currently administrated by separate administrative organs. Therefore, in the future, all applications for patents, trademarks and geographical indications of origin in China will be filed at the SIPO, and the SIPO will be responsible for examining and subsequently registering these IP rights. Further, based on China’s existing dual administrative and judicial system for enforcing IP rights, the SIPO will also be in charge of administrative adjudication of disputes involving patents, trademarks and GIs, and supervising their administrative enforcement.

The restructured SIPO will be governed under the State Market Supervision Administration (SMSA), a new government body, which will further consolidate antitrust functions currently shared among three separate administrative organs, and functions of supervising food and drug safety as well as quality of industrial products etc. An enforcement team organized under the SMSA will be responsible for the administrative enforcement of patents, trademarks and GIs.

As a government official explained, the planned merger of the patent and trademark agencies is aimed to solve the problems of separated administration and overlapping enforcement.

Worldwide, most countries have a single IP office administrating both patents and trademarks. For instance, countries such as the U.S., Germany and France have a single patent and trademark office; the IP office in countries such as the U.K., Korea and Canada is even responsible for copyright as well. This common practice of consolidating patent and trademark administration has many reasons. After all, patents and registered trademarks have many similarities. Both are considered “industrial property” and both are subject to an application/examination/registration procedure. Often, both are dealt with by a same group of professionals, such as attorneys qualified for practicing both patent and trademark law and employees in in-house IP departments.

China’s plan to merge the patent and trademark agencies is thus in line with the international practice. It may not only improve the administrative efficiency, but also facilitate international exchange and cooperation with foreign IP offices.

Another, somewhat unique objective of China’s current restructuring plan is, as afore-mentioned, to avoid overlapping enforcement. China’s dual-track system for the enforcement of IP rights allows right holders to enforce their rights via courts or administrative agencies. Currently, the administrative enforcement of patents and trademarks is handled by the agencies responsible for the registrations. Consequently, patents and trademarks are enforced by separate agencies, although sometimes a product or a company may infringe both a patent and a trademark, and, thus, their enforcement may overlap. In the future, the enforcement team of the SMSA will take over the duties of enforcing both patents and trademarks, and the overlap problem can thus be overcome.

It is expected that combining forces of the currently separate agencies will enhance patent enforcement in particular, since the current patent agency has a smaller enforcement team, especially at the local level compared to the size of the current trademark agency.

The restructuring plan is now being rapidly implemented. At the time of writing this post, namely on 21 March 2018, the overarching SMSA has just been officially established. The new SIPO should be set up soon as well.

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