Intellectual Property Protection and Risk Prevention for Private Enterprises: A Survey and Analysis Based on Nanjing
Private enterprises are the driving force behind China’s modernization and an important foundation for high-quality development. Intellectual property (IP) protection plays a crucial role in creating a favorable business environment. The government, judiciary, and private enterprises should work together to safeguard the legitimate rights of innovators and promote the healthy and stable development of private enterprises.
1. Overview of Intellectual Property Protection and Risk Prevention for Private Enterprises
Nanjing actively promotes IP protection for private enterprises and creates a favorable environment for innovation and entrepreneurship. Four intellectual property workstations in Gulou District, Pukou District, Jiangning Development Zone, and Jiangning High-tech Zone were established in April 2022. These workstations provide integrated one-stop services for IP creation, use, management, and protection, creating a better IP business environment. The Xuanwu District Court has intensified its efforts to punish IP infringement, focusing on key core technologies, important fields, and emerging industries, while cracking down on inappropriate rights protection and abuse of litigation. This approach ensures the legitimate rights of various market entities are protected. Meanwhile, a diversified mechanism for resolving IP disputes has been actively promoted, with coordination between administrative agencies, universities, industry associations, and other entities to build a full-chain protection system, helping enterprises restore their confidence and solve development challenges. The Xixia District IP Bureau has confirmed that 87 enterprises and 4 large markets have been included in the first batch of the district's key IP protection database. Leveraging resources such as the Nanjing IP Rights Protection Assistance Center, comprehensive services are provided to enhance the ability of enterprises to handle IP disputes, reduce IP risks, and ensure the smooth development of key enterprises and markets.
2. Existing Problems in IP Protection and Risk Prevention for Private Enterprises
(1) Imperfections in the Legal Framework
In 2022, China amended laws and regulations such as the "Science and Technology Progress Law" and the "Anti-Monopoly Law" and issued judicial interpretations like the "Supreme People’s Court’s Provisions on the Jurisdiction of First Instance Civil and Administrative IP Cases." However, there are still many issues in the IP protection legal framework. For example, the current criminal laws on IP infringement are overly general and lack clarity and operability, with inconsistent enforcement standards. Additionally, definitions such as "illegal gains" and "illegal business amounts" related to IP violations need to be further refined.
(2) Shortage of Professional Talent
The cultivation of IP professionals in China began relatively late. As of 2022, only around 100 universities offered undergraduate IP programs, with fewer than 20,000 graduates annually. IP cases often require knowledge of cross-disciplinary fields, and the number of multidisciplinary talents is even scarcer, especially in second-tier cities like Nanjing, where there is an even greater shortage of IP professionals.
(3) Lack of Protection Awareness and Management Capacity in Private Enterprises
Unlike state-owned enterprises with well-established management systems, private enterprises, especially small and medium-sized ones, often fail to recognize that intellectual property is a valuable intangible asset. As a result, they lack awareness of self-protection and risk prevention regarding IP infringement. Additionally, many private enterprises do not have a dedicated IP management department or personnel, nor have they established relevant systems and standardized procedures, which significantly affects the effectiveness of IP management and protection.
(4) Difficulty in IP Rights Protection
In 2022, courts in Nanjing concluded more than 7,300 IP cases, with an increasing number of IP infringement cases. This presents a serious challenge for private enterprises in terms of IP protection and risk prevention. Due to difficulties in investigating and collecting evidence in IP cases, long litigation periods, and high costs, private enterprises face significant challenges in protecting their rights through civil litigation. Criminal IP cases, especially, encounter obstacles from the initiation of complaints.
3. Countermeasures and Suggestions for IP Protection and Risk Prevention for Private Enterprises
(1) Improve the IP Legal Framework
To address the current imperfections in the IP legal system, Nanjing should supplement the emerging fields of IP protection through local regulations and guidelines. For example, considering the development of high-tech fields such as big data and artificial intelligence, regulations should be introduced to address online IP infringements and clarify the collection of evidence, penalties, and enforcement responsibilities for these violations. There is also a need for specialized laws to protect trade secrets and improvements in related regulations such as patent law, trademark law, and copyright law. It is recommended to draft a commercial trade secrets protection law to strengthen the protection of private enterprises’ trade secrets.
Furthermore, the establishment of a punitive compensation system for IP infringement is essential. Nanjing should speed up the revision of the "Nanjing Intellectual Property Promotion and Protection Regulations" to increase the cost of infringement and intensify penalties for malicious infringements. The city should also build a comprehensive credit-based joint punishment mechanism for IP violations, using tools like "internet + market regulation" and establishing real-time monitoring and source tracking systems.
(2) Innovate in IP Protection Administrative Enforcement
Nanjing should improve the public service capacity of administrative agencies responsible for IP protection. This includes enhancing IP examination efficiency, strengthening the development and supervision of IP service institutions, and promoting innovation in administrative enforcement systems. Currently, IP management and enforcement are spread across different departments, and coordination among them needs improvement. Nanjing could establish a unified IP administration and enforcement department to improve coordination between IP regulatory agencies, strengthen administrative law enforcement, and improve the efficiency of IP dispute resolution.
(3) Enhance IP Litigation and Dispute Resolution Mechanisms
The Nanjing IP Court should strengthen its adjudicative functions, particularly by expanding its jurisdiction to include criminal and administrative IP cases. It could also introduce an expert advisory system by inviting IP experts from Nanjing’s universities to form a dynamic expert pool for providing technical consultation in IP infringement cases. Additionally, enhancing arbitration and mediation capabilities can provide private enterprises with more efficient and cost-effective ways to resolve IP disputes.
(4) Enhance the Public Prosecutor's Role in IP Public Interest Litigation
The public prosecutor’s role in IP public interest litigation should be expanded. In particular, in cases of IP crimes, prosecutors should have the authority to initiate public interest lawsuits to protect victims’ civil rights. This could ensure that IP-related criminal cases are dealt with more effectively and that the victims’ rights are properly safeguarded.
(5) Strengthen Coordination Between Judicial and Administrative Authorities
Improving cooperation between judicial organs, such as courts and prosecutors, and administrative authorities like market regulation and IP bureaus is key to improving IP protection. This could be achieved by establishing communication mechanisms between the judiciary and market regulatory agencies to ensure better coordination of evidence, case transfers, and information sharing.
(6) Build a Specialized IP Talent Pool
Nanjing should focus on the construction of a professional IP talent pool by collaborating with universities and law offices to create specialized IP training programs. This will help to increase the number of professionals equipped to handle IP issues. At the same time, businesses should invest in training their staff on IP protection and hire multidisciplinary talent to ensure effective management of IP assets. Establishing a system for recognizing IP professionals and promoting the development of specialized qualifications can also incentivize further development in this area.
(7) Establish an IP Protection Alliance
An IP protection alliance should be established to facilitate the joint efforts of government departments, business associations, law offices, and universities. This would provide enterprises with systemic services from IP authorization to protection and enforcement, helping businesses manage their IP more effectively, monitor infringement risks, and improve their IP management systems.
(8) Enhance Enterprise Risk Protection
Private enterprises should establish dedicated IP dispute resolution departments and cultivate IP professionals within their teams. This will help in quickly identifying and addressing IP infringement, using legal, arbitration, and settlement methods to minimize the impact of IP issues. Encouraging enterprise executives to prioritize IP management as part of their development strategy is crucial for reducing risks and enhancing their overall competitiveness in the market.