The theft of trade secrets remains a particular concern. Such theft occurs inside and outside of China for the competitive advantage of Chinese state-owned and private companies. Conditions are unlikely to improve as long as those committing such theft, and those benefitting, continue to operate with relative impunity, often taking advantage of the theft in order to compete unfairly or to enter into business relationships that disadvantage their victims. The United States strongly urges the Chinese government to take serious steps to put an end to these activities and to deter any recurrence by rigorously investigating and prosecuting theft of trade secrets undertaken by cyber and conventional means.
Of longstanding concern are central, provincial, and local government measures and actions that appear to require or pressure rights holders to transfer IPR from foreign to domestic entities. Sometimes guided by government measures or policy statements intended to promote indigenous innovation and the development of strategic industries, government authorities may condition eligibility for certain benefits (e.g., certain subsidies and tax preferences) or deny or delay access to certain markets (e.g., government procurement or the ICT market) upon IPR being owned or developed in China, or licensed to a Chinese entity. The United States is concerned by the number of stakeholders reporting that Chinese government entities are using regulatory pressure to compel the licensing of important technologies or to dissuade the stakeholders from pursuing available legal avenues to enforce their IP. China has made commitments to the United States on certain of these matters, and the United States continues to press China to comply with those commitments.
Legal Reform
The United States generally welcomes China's ongoing legal reform efforts, despite serious reservations regarding certain recent legal changes. Since 2012, China has undertaken revisions to, and invited comments on, draft revisions to its existing laws on civil procedure, patents, copyrights, trademarks, drug administration, and scientific and technological achievements. In terms of procedure, effective January 1, 2013, China's amended Civil Procedure Law includes provisions that may help U.S. rights holders to obtain preliminary measures and other actions to enforce their rights in civil court actions. In early 2015, China's Supreme People's Court (SPC) invited comment on draft judicial Interpretations of the Supreme People's Court on Issues Related to the Application of Laws in Reviewing Act Preservation Cases of Disputes over Intellectual Property Right and Competition, which would provide additional guidance relative to provisions of the Civil Procedure Law. In addition to procedural reforms, on May 1, 2014, a revised Trademark Law and implementing regulations went into effect. China's State Council Legislative Affairs Office (SCLAO) is also reviewing and considering draft amendments to the Patent Law and Copyright Law. Very recent draft amendments to the Patent Law appear not to address concerns identified by the United States and industry, and the amendments may
33
