US, China Vow Cooperation in IP Protection

China’s Ministry of Commerce has slammed AUS threat to impose new restrictions on its steel and aluminium products. It says Washington is politicizing economic issues and undermining the security of the global supply chain. President Biden’s proposing 25% levies on some of the products as part of an ongoing review. Analysts say the steps would have minimal economic impact. Intellectual property protection is also a key focus for American and Chinese officials amid trade and tech tensions. the US Under Secretary for Intellectual Property, Kathy Vidal met this week with a top Chinese official and we asked her for what message she delivered. The message was that we need strong intellectual property protection here in China. We spoke a lot about innovation. He communicated the importance of innovation to China and I spoke about U.S. companies interest in being here in China but being successful. And they really need a strong IP ecosystem in order to be successful. Now, I’ve been covering China for more than 30 years, and every year IP threat and the threat of IP theft has always been a big issue. It seems to be, you know, not at the fore right now in US, China relations. But I’m guessing from your remit, as you know in the Commerce Department as head of IP protection, that it is front and center of your attention. Where are the biggest sticking points right now? So one of the big issues that we’re seeing right now is transparency. So as you mentioned, it’s always been somewhat at the fore in terms of interest of U.S. companies right now. There have been some improvements made in China when it comes to legislation, when it comes to some of the counterfeiting issues, but we’re still seeing major issues with regard to transparency. We’re also seeing new issues emerging when it comes to counterfeit products and then some trade secret and trademark issues as well. Now this was at the forefront of the phase one trade deal under the previous administration, the Trump administration. It was also addressed by XI and Biden in November on the sidelines of APEC in San Francisco. But again, the problem always seems to be is enforcement on the Chinese side. Is that what you’re seeing? It’s not getting from discussion to real practices in China. That’s correct. There have been a lot of legislative moves within China. I know that since 2020, we have actually commented on over 45 measures in China. So we’re starting to see some positive progress, but it really comes down to the implementation. And as you mentioned, enforcement is always an issue. We are seeing some improvements in enforcement when it comes to counterfeit products, but we have a lot of issues still with U.S. company when it comes to online sales and also some protectionism that we’re seeing in local communities. Where are we seeing the biggest infringements that you can see? Obviously, it’s much more sophisticated now than it was 20 years ago when DVDs were being pirated and sold on the street corners of Beijing. It’s much more sophisticated and probably higher value items. Now it is. And I will say one of the places we’re seeing a lot of infringements is through live streaming. So for e-commerce, some of the issues before we’re more platform related. We still have those issues here in China, but we’re seeing new modalities coming out, including live live streaming where a product will be offered for sale and then it’ll disappear. So it’s really hard to find out who the actual infringer is. Have you moved the needle? It’s going to be a process as you mentioned, and I think it’s just continued dialogue and making sure that we’re heard on the key issues and that our counterparts and government officials understand the impact of some of what’s happening in China. I believe they do. It’s just a matter of continuing to work forward and push for progress, which we’re going to continue to do.