"Six years ago, when I first came to China, I originally thought that China did not pay attention to patent protection at all. Now it seems that I was completely wrong. Now I can confidently tell my colleagues in other countries that patent protection is making great progress here. Good luck!" Robin Smith, Vice President of the LEGO Group and General Counsel of Asia Pacific and China, praised China without hesitation.
In recent years, Shanghai has insisted on equal protection of intellectual property rights for Chinese and foreign market entities, severely cracked down on infringement and illegal activities, and strived to create a first-class business environment for foreign-funded enterprises to develop in Shanghai.
"Comprehensive Victory"
To understand Luo Can's feelings, you might as well look at three cases first. These are all "achievements" that foreign-funded enterprises are quite proud of during the reporter's visit.
In August 2022, the Economic Investigation Corps and Huangpu Branch of the Shanghai Public Security Bureau successfully destroyed the criminal gang that produced and sold Lego brand copyrights. The police arrested more than ten suspects on site, destroyed 6 production, packaging, warehousing and other dens, and seized a large number of "Bole" infringing products. Judging from the pictures released by the police, the "Bole" toys are almost identical to Lego toys. In April this year, the Shanghai No. 3 Intermediate People's Court finally ruled that the amount involved in the infringer's counterfeit Lego building block toys amounted to more than 1.1 billion yuan. It was ultimately fined 600 million yuan and sentenced the principal culprit to up to nine years in prison.
In 2021, AstraZeneca’s blockbuster drug patent was challenged and was upheld as valid by the State Intellectual Property Office. In 2023, AstraZeneca filed an administrative ruling on patent infringement disputes with the Shanghai Intellectual Property Office regarding the infringement of generic versions of the drug. The Shanghai Intellectual Property Office made a timely administrative ruling to efficiently handle drug patent disputes. This administrative ruling was selected by the State Intellectual Property Office into the "Typical Cases of Intellectual Property Administrative Protection Cases in 2023".
From 2015 to 2018, Bayer's high-pressure syringe barrel was copied and sold by a pharmaceutical company, and Bayer initiated the first round of patent infringement litigation. The court found Company A to be guilty of infringement and ordered Company A to stop the infringement and compensate Bayer for RMB 1.32 million. Company a continued to infringe upon compensation. Subsequently, Bayer launched a second round of patent infringement litigation, requesting high compensation. Under pressure from the judicial department, Company A filed a settlement request and paid a settlement of 24.3 million yuan. It is reported that this compensation (a total of 25.62 million yuan) is currently the highest compensation amount received by an obligee in a patent dispute case in the medical device field in China, and even in the entire life science field. Bayer calls it a "total victory."
"The new version of the patent law implemented in 2021 has introduced 'drug patent period compensation', 'patent linkage system' and 'punitive damages'. These are regulations that greatly benefit pharmaceutical companies and also enhance our confidence in further investing in China. " Liu Hongqiang, Vice President of Bayer China Intellectual Property, said with emotion.
Investment plus investment
Investing in China was not something he said casually.
In November 2023, Bayer and Shanghai Pharmaceuticals reached a cooperation agreement to build a co.lab co-creation platform, aiming to promote cutting-edge innovations in fields including cell and gene therapy, and support and accelerate the industrial transformation of scientific research results. This year, Bayer Health Consumer Products also plans to set up a China Cooperation Innovation Center in Shanghai, and is expected to invest 20 million euros to accelerate innovation.
The same goes for AstraZeneca. In 2022, it will increase investment by 180 million yuan to build a pharmaceutical production line, in 2023, it will increase investment by US$700 million to establish a Qingdao factory, and this year it will increase investment by another US$475 million to establish a Wuxi small molecule drug factory.
Lego has nearly a thousand retail stores around the world, half of which are in the Chinese market, and it is still accelerating the expansion of its retail network.
"There is a saying in the pharmaceutical field that patents are the lifeline of business. According to authoritative statistics, the failure rate of new drug research and development is as high as 90%. It takes at least 9-12 years for a new drug to be launched from research to market, and the research and development cost is as high as 2.6 billion US dollars. This is equivalent to US$2.6 billion. The cost of the first tablet of a new drug is US$2.6 billion, but the mass production cost of the second tablet is only a few cents. "Liu Hongqiang said that the characteristics of high research and development costs and low replication costs make multinational pharmaceutical companies particularly cautious in choosing research and development areas. .
The intensity of intellectual property protection is one of the most important indicators for measuring the business environment. The success of the US pharmaceutical industry in the 1980s is the best example.In 1984, the U.S. Patent Act updated the medical patent protection provisions, which brought American pharmaceutical companies into a period of prosperity and development, and the global center of gravity of the biopharmaceutical industry also shifted from Europe to the United States.
"Patent applications are not applied after the drug is invented, but after the early laboratory stage of research and development is over." Liu Hongqiang told reporters that clinical trials of new drugs usually take seven or eight years before they can be applied for. It will be marketed after the application is approved by the Food and Drug Administration. Europe, the United States, and Japan used to have an advantage in this regard, but after China introduced the drug patent period compensation system in 2021, more pharmaceutical companies have made China their first choice market.
He believes that with the blessing of a good intellectual property system, foreign companies are more willing to continue to expand investment in the Chinese market. In the past five years, Bayer's prescription drugs have obtained approval for nearly 30 new products or new indications in China, and their launch speed is almost as fast as the world.
Dual-track protection
Liu Hongqiang introduced that China has two remedial channels for patent infringement, one is the traditional judicial channel, and the other is the administrative rights protection channel with Chinese characteristics. This dual-track system is very unique in the world.
With traditional judicial channels, although court decisions can be effective nationwide, the requirements for proof of rights holders are relatively high and time-consuming. Although administrative rights protection only takes effect within this administrative region, the threshold for evidence requirements is lower and the case is concluded very quickly, which is especially helpful for quickly stopping infringements in a certain city or a certain region.
"The addition of such an avenue complements the judicial approach. This is a manifestation of our superiority in patent rights protection compared to other countries." Liu Hongqiang said.
From a historical perspective, China's patent law was only implemented in the 1980s, and patent protection for drugs only began in 1993. It has only been 40 years since it was fully implemented, while developed countries have a century-old history. In his opinion, after nearly 40 years of development, China's intellectual property protection has reached international standards, and in some aspects, even surpasses developed countries such as Europe, the United States, and Japan.
According to Yu Chen, deputy director and spokesperson of the Shanghai Intellectual Property Office, Shanghai has received excellent grades in the national intellectual property protection inspection and assessment for four consecutive years and is now striving to build an international intellectual property protection highland and an international intellectual property center city.
It is worth mentioning that Shanghai has included intellectual property protection work in the district party and government leadership team performance appraisal and district business environment assessment, comprehensively consolidating local responsibilities for intellectual property protection work. "Currently, all districts in Shanghai have the administrative power to adjudicate patent infringement disputes, and have also strengthened the rapid relief of corporate infringements." Yu Chen said.
