China is set to impose severe punishments in intellectual property right (IPR) infringement and counterfeiting cases.
"Penalties for IPR infringements will be increased and the cost of safeguarding such rights will be lowered," according to a statement following a State Council executive meeting Wednesday.
It is a significant move to demonstrate the government's determination to safeguard IPR, which is crucial to innovation, new growth and optimizing allocation of resources.
"Quick and low-cost ways of safeguarding IPR must be expanded," the statement said.
At the same time, the government plans to establish a punitive fine system for property right infringements and step up law enforcement and judicial protection.
"A normalized mechanism needs to be built so as to protect the IPR in a comprehensive and law-based manner," according to Li Shuguang, a professor at China University of Political Science and Law.
Data from the State Intellectual Property Office (SIPO) showed that in the first half of 2017, there were 15,411 national patent administrative law enforcement cases, an increase of 23.3 percent from the same period a year ago.
"With the deepening of reform, the cost gap between innovation and safeguarding rights has been reversed fundamentally," Li said.
IPR protection will be improved using real-time monitoring, Internet tracing of sources, and online identification of infringements, according to the statement.
Focus will be put on IPR infringements in online shopping and foreign trade, and more will be done regarding fake or shoddy goods.
Meanwhile, the government will make compensation if companies suffer losses due to the government's bad faith.
With strong and effective property rights protection, China will raise the confidence of market participants to invest and start businesses, the statement said.
"IPR protection should be deeply rooted in people's hearts just like traffic rules," Li said.
In 2016, Chinese courts handled 152,072 IPR cases, up 16.8 percent year on year. Over 3,700 people were arrested and 7,000 prosecuted, according to a white paper on IPR protection.
In September 2017, "the Action Plan for Protecting Foreign Companies' Intellectual Property Rights" was jointly published by 12 of China's government departments, including the office of the National Leading Group on the Fight against IPR Infringement and Counterfeiting, SIPO and the Public Safety Bureau.
China has a very good workable IPR protection system, which is different from the U.S. system, yet right and appropriate for China, William Mansfield, IP director for ABRO Industries, told Xinhua in a recent interview.
In 2014, China established special IP courts in Beijing, Shanghai and Guangzhou, and their success encouraged the government to roll out four additional IP courts in Nanjing, Suzhou, Chengdu and Wuhan in early 2017.
The most important thing is that Chinese officials strongly value the role that the law plays in keeping society well-functioning as they are aware of the importance of legality and the value of commerce, Mansfield said.