[China Industry & Commerce News] Riding the Waves of Reform and Innovation, and Marching Towards the World  “Future of IP Competition” Series Report - Shanghai

July 23, 2018, China Industry & Commerce News

“With billowing and surging waves, the river runs into the sea ceaselessly without turning back…”, the emotion-provoking song of Shanghai Bund tells the vicissitudes Shanghai has experienced in history.

In order to live up to the great trust of the central government to “pioneer the reform and opening-up and forerun innovative development”, Shanghai, during the past 40 years of trials and hardships on the way of reform and opening-up, has been marching forward with solid steps. Shanghai’s intellectual property industry has been in resonance with its urban development, and 40 years of hard work and intensive labor have brought great successes: well-known trademarks manifesting great potential of corporate brands and high quality patents taking the lead in industrial innovation trends provide a steady flow of inner energy, and build a fair and efficient business environment for the great cause of reform and opening-up.

Staying true to the initial intention and daring to shoulder the heaviest burden

The site of the First Conference of the CPC, i.e. No. 374, Huangpi Road South in urban district of Shanghai is the birthplace of the Communist Party of China. As the cradle for red revolution of China, Shanghai has always stuck to the communist ideal deeply ingrained in the gene of this city, which has driven Shanghai to blaze new trails and shoulder the heaviest burden on the way of reform and opening-up.

As the indicator of the core competiveness of urban economy Shanghai’s intellectual property industry has always borne in mind its mission to serve the overall situation and to stimulate innovation. Starting with designing from the top level, it has drawn a splendid blueprint of development.

In September 2004, Shanghai first enacted a local intellectual property strategy compendium titled Intellectual Property Strategy Compendium of Shanghai (2004-2010). The people’s government of Shanghai enacted Several Opinions of Shanghai on the Implementation of the National Intellectual Property Strategy Compendium in September 2008, and also enacted Intellectual Property Strategy Compendium of Shanghai (2011-2020) in 2012, which proposed a development goal that is to strive to develop Shanghai into an intellectual property hub in the Asia-Pacific region by 2020. In 2016, the municipal Party committee and people’s government of Shanghai printed and issued the Implementation Opinions on Strengthening Intellectual Property Application and Protection to Support the Construction of an Innovation Center for Science and Technology and 20 specific measures…

Great things may be done by mass effort. Shanghai established a creative joint meeting system consisting of 45 units such as the municipal government authorities, the NPC, the district government authorities, administrations for industry and commerce, customs administrations and courts, building a working pattern characterized by “horizontal collaboration, vertical linkage and internal & external coordination” and playing an important role in major events such as IP Protection in Expo 2010 Shanghai.

Step onto the stone and you should leave your footprint on it; clutch a piece of iron and you should leave your handprint on it…With unremitting efforts made by different departments, the top-level design goals have realized one by one, and Shanghai has acted as a pioneer in many areas, bringing Shanghai's intellectual property reform under the spotlight.

If you want to learn about the achievements of Shanghai nowadays, Pudong is the right place. In the past, it was widely believed that “a bed in Puxi trumps a room in Pudong”. The dramatic reform has completely changed the profile of Pudong. 20 years ago, the first basic-level and “Three in One” (criminal, civil and administrative) intellectual property tribunal among people’s courts in China was born in Pudong. This creative reform mode was written into the National Intellectual Property Strategy Compendium, and widely applied across the nation, exerting significant influences on the intellectual property judicial system of China.

On July 25, 2017, the first intellectual property protection center of China was launched in Pudong. The center strives to develop into a national-level functional platform for intellectual property that integrates quick examination, right verification, right protection and efficient operation. Until now, it has helped over 200 enterprises pass the quick examination and filing by the State Intellectual Property Office.

On November 17, 2016, Shanghai International College of Intellectual Property, the first “international” intellectual property college with an "international" title in China, was inaugurated. It was the seventh high-end intellectual property talent training bases established by the World Intellectual Property Organization (WIPO) globally.  

In 2016, the reform of simplifying trademark registration swept the whole country, and Shanghai became the forerunner and practitioner of the reform.

On July 28, 2016, the receiving point for applications for registering exclusive rights to use trademarks and mortgages was established in Xuhui District. On March 1, 2017, the trademark receiving window of Shanghai (Xuhui) of Trademark Office of the State Administration of Industry and Commerce was established at the administrative service center of Xuhui District. Thus, the entire chain for business venturing and corporate innovation got connected completely.

On September 29, 2017, Shanghai Trademark Examination Cooperation Center of Shanghai was established in Xuhui District. This was the first trademark examination cooperation center out of Beijing in China, making Shanghai the only city that could cope with international registration of Madrid trademarks across the country. By the end of this March, the center had completed examination of 332,137 cases of domestic trademark registration, and has completed territorially extended substantial examination of 29,292 cases of Madrid trademark registration.

Since January 13, 2017, Shanghai Intellectual Property Rights Trading Center, by establishing five sectors i.e. patents, technical secrets, trademarks, copyrights and layout designs of integrated circuits, has built an international operation service system for intellectual properties.

Shanghai’s gross GDP surpassed RMB 3 trillion yuan in 2017, 109 times of that in 1978. By 2017, Shanghai had over 870,000 validly registered trademarks, and patent ownership per 10,000 people reached 41.5, which means there was one registered trademark for every three market entities, much higher than the national average level - one registered trademark for every seven market entities. In Shanghai, IP cultures and the cultural concepts featured by respect for knowledge, advocacy for innovation, integrity and law-abiding have penetrated deeply into people’s mind.

Shanghai’s famous old Brands gain a new glamor through innovation

In the lingering music, a small boat glided swiftly on the river. In the long history of trademark development of China, Shanghai has undoubtedly always been a glorious chapter.

White Rabbit Rolls, Forever Bicycles, Hero Pens…these old brands of Shanghai have left sweet memories cherished by a whole generation. Now, Chcedo, NIO, Ctrip and other emerging brands become the representatives of industrial upgrading of Shanghai, while Lao Feng Xiang, Zhang Xiao Quan, Pechoin and other traditional brands have revived and gained new vigor through inheritance and innovation.

Accelerated development of trademark reflects the vitality of Shanghai’s brands. Highly concentrated trademark value manifests the advantages of Shanghai brands.

With a history of 170 years, “Lao Feng Xiang” has always taken intellectual properties as its core corporate assets, and now possesses 241 invalid patents. It began to register Feng Xiang, Lao Feng Xiang and other trademarks since 1985, and completed trademark registrations in 16 countries and regions including USA, Canada and China HKSAR. With a growing reputation of the brand, its annual profits have hit a double-digit growth rate successively in the last dozen years.

Fengxian District is located south to Hangzhou Bay and north to Huangpu River. In the process of economic transformation and upgrading of Shanghai, it has established its strategic position of building “Oriental Beauty Valley” into a core area for beauty and health industry of Shanghai and “the Capital of Cosmetic Industry of China” based on its location advantage. The administrations for industry and commerce and the market supervision authorities of the district take an initiative to deeply integrate trademark strategies with the strategic goal of “Beautiful and Strong Fengxian”, and strive to build a better and protective environment for the creation, application and management of intellectual properties in “Oriental Beauty Valley”.

It is said that the industrial cluster of “Oriental Beauty Valley” covers diversified sectors such as beauty and skin care products, daily cosmetics, health care products and biological medicine. More than 1/4 of Shanghai’s cosmetic enterprises have settled in the valley whose output value accounts for over 40% of the total output value of Shanghai. Local cosmetic brands like Chcedo, KANS and Pechoin, international first-class brands from different countries and regions like USA, France, South Korea and Taiwan (China), and more and more innovative SMEs are continuously joining the industrial cluster of the valley.

The municipal people’s government of Shanghai has enacted Several Opinions on Improving the Development of Beauty and Health Industry of Shanghai and helped the building Oriental Beauty Valley into China's and even Asia's largest industrial cluster of the beauty industry in possession with independent intellectual property rights. It is reported that in this golden autumn of October, Fengxian District will hold World Cosmetics Event, building an international platform for communications and exchanges between “Oriental Beauty Valley” and the global cosmetics industry and help cosmetic brands of China go global.

The history of the reform and opening-up of Shanghai is one of fighting in the business world for Shanghai’s brands. Both banks of Huangpu River are glittered with famous manufacturing brands and service brands. A mingling of traditional brands and innovative brands build a golden name card of Shanghai.

Strictly enforcing laws to build a good image of China in terms of IP protection

To some extent, a city’s business environment is determined by its protection of intellectual properties. In the World Bank’s “Doing Business” Report, China's rank is based on data collected from two cities, Beijing and Shanghai, and Shanghai has a weighted ratio of 55%, which shows its self-evident importance.

When it comes to IP protection, Shanghai has always been ahead of the nation. After many years of reform practices, Shanghai has initially established an overall working pattern for IP protection including effective linkage between administrative enforcement and juridical protection, and parallel developments of dispute arbitration, dispute resolution, credit management and self-regulation of industry.

Shanghai Intellectual Property Court, officially inaugurated on December 28, 2014, is one of the first intellectual property courts of China. For the past 3 years, the court has, through active exploration, established professional judging organizations, a technical investigation officer system, and a professional think tank, facilitating the reform with information technology, and providing lawsuit services for the convenience of people. It handled a series of cases with significant social influences, including the trademark infringement dispute between Chateau Lafite Rothschild and Mellowines, and the unfair competition dispute between Zaihe et al and Zhejiang Tmall Network Co., Ltd., exhibiting extremely high capabilities in juridical protection.

Regarding administrative protection, Shanghai sets an excellent example for the nation. From 2008 to 2017, Shanghai investigated and closed 23,461 trademark violation cases, and transferred 383 suspected trademark violation cases to judicial organs. In 2017, Shanghai Administration for Industry & Commerce launched actively the Special National Protection Action for “Lao Feng Xiang” Trademark, setting a precedent of national protection for a time-honored regional trademark. 859 trademark counterfeit cases involving foreign brands such as Disney, LV, Chanel and Burberry, were investigated and closed, accounting for 69.5% of all the trademark counterfeit cases. Due to rapid response and strict enforcement, the administration for industry & commerce and the market supervision authority of Shanghai have built a positive image of China that it protects the legal interest of both domestic and foreign trademark right holders in a fairly manner. Every single year, cases from Shanghai always make it to the list of typical trademark infringement cases as investigated and closed by administrations for industry & commerce and market regulation authorities throughout the country, an event jointly held by the Trademark Office and China Industry & Commerce News.

Powerful protection of IP attracts a lot of domestic and foreign well-known brands to Shanghai. In 2017, Shanghai witnessed the national launching of new products of 1,265 domestic and international brands, ranking first in the country. In June, Shanghai held the launching ceremony for the Product Launch Center for Global Brands and declared to the world that Shanghai will create an optimal environment for new product launch for both new and time-honored famous brands by institutional innovation, rule globalization, platform development and environment creation, building Shanghai into an indicator of global trends.

Striving to take the lead and build an IP protection highland

We should not be afraid of the dark clouds blocking our view because we are already at a high elevation. This year marks the 40 years anniversary of the reform and opening-up of China, and faced with new situations, Shanghai gallops at the head and blows the horn for the new journey of reform and opening-up.

On April 25, 2018, Several Opinions on Developing “Four Brands” of Shanghai and Pioneering the Promotion of High-Quality Development was issued, proposing to build four brands, namely, Shanghai Service, Shanghai Manufacturing, Shanghai Shopping and Shanghai Culture.

Following the top-level overall design, Shanghai successively enabled four three-year action plans to specify the targets, key tasks and measures for promoting the “Four Brands”. Three-Year Action Plan on Developing the Brand of “Shanghai Manufacturing”: to Accelerate the Building of an Excellent Global Manufacturing Base states clear that “Shanghai Manufacturing” will not only restore past glory but will also aim for “Global Excellence”, enabling “Shanghai Manufacturing” to feature more advanced technology, smarter manufacturing, better product quality and more solid reputation of brands.

In order to support the development of the “Four Brands” of Shanghai, Shanghai Administration for Industry and Commerce brings into full play the administrative function of trademark, make active efforts to deepen the reform, facilitate policy implementation and improve enforcement protection, and strive to make trademarks and brands an important part of upgrading energy level and core competiveness of Shanghai, ultimately making Shanghai Service available to enterprises in both Shanghai and its surrounding areas with radioactive effects on Yangtze River Delta and East China.  

People who observe keenly the situation are intelligent and people who are in control of the situation will win. On July 10, Shanghai launched the “100 New Measures for a More Open Shanghai” action program which proposes to develop an open, shared and interconnected highland for high-level intellectual property protection.

The 15 specific measures focus on the following three aspects: I. to improve the validity of IP protection; II. to enhance the ability to protect IPs overseas, build an overseas IP protection base for foreign trade and establish an overseas trademark protection office; III. to improve IP service function, optimize the service function of national-level IP protection centers, and enhance the service ability of international registration window for Madrid trademarks.

On the same day when the “100 New Measures for a More Open Shanghai” was launched, the municipal people’s government of Shanghai and USA Tesla entered into a MOU under which the parties would improve their cooperation and exchange in the fields of technical innovation, industrial development, etc. to expedite globalization and facilitate the development of high-end manufacturing industry of Shanghai.

Shan Xiaoguang, Professor and Dean of Shanghai International College of Intellectual Property, Tongji University, pointed out that: “Shanghai should improve its urban function and core competiveness and develop a new highland of institutional innovation that keep in pace with international rules; IP protection should take a step further, and contribute Shanghai wisdom to the world.”

“100 New Measures for a More Open Shanghai” reflects the courage, resolution and wisdom of “a city with special missions” when it embarks on a new journey of reform and opening-up. In the magnificent new era, Shanghai has set sail again and will surely continue the glory and embrace a more splendid future. (Reported by Li Chun)