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 firm only has a minority ownership stake, license IPR on concessional terms, or transfer technology against its will. Based on a limited number of investigations conducted to date, there is also growing concern that Chinese competition authorities may target for investigation those foreign firms that hold IPR that may be essential to the implementation of certain technological standards. Reports of intimidating and non-transparent investigative conduct contribute to these concerns.

In the related realm of national standards, the Standardization Administration of China (SAC) and the State Intellectual Property Organization (SIPO) published Regulatory Measures on National Standards Involving Patents (Interim) that went into effect on January 1, 2014. Relative to prior drafts, the Measures appear to address a number of U.S. Government and industry concerns. However, the United States continues to have serious concerns about potential requirements for entities not participating in the development of the standards to disclose relevant patents and make licensing commitments. The United States recognizes that there is a lack of clarity as to whether the positions of standards setting bodies regarding voluntary disclosure and voluntary licensing of essential patents have been incorporated appropriately into the positions of the anti-monopoly law enforcement authorities. In particular, the recently issued Regulation by the Administration for Industry and Commerce on the Prohibition of Conduct Eliminating or Restricting Competition by Abusing Intellectual Property Rights appears to retain provisions that may unnecessarily inhibit a patent holder's exercise of discretion in making licensing commitments for standards essential patents, despite U.S. requests that such language be stricken from the final regulation. The provisions appear in tension with China's recognition at the 2014 JCCT that IPR protection and enforcement is important for companies that voluntarily agree to incorporate patents protecting technologies into a standard, and that concerns may exist relating to the licensing requirements of standard essential patents that are subject to licensing agreements.

IPR Protection for Pharmaceutical Products

The United States has engaged intensively with China to address troubling obstacles to obtaining and maintaining patents on pharmaceutical innovations. Although SIPO guidelines governing the review of patent applications were once generally consistent with those of the United States and leading patent offices in other countries, a revised interpretation of the guidelines has severely restricted a patent applicant's ability to provide supplemental data in support of an application. As a result, China has, in some cases, denied pharmaceutical patent applications and invalidated existing patents, while the United States and other jurisdictions have consistently granted patent protection in similar cases. This problem was the subject of great attention during Vice President Biden's visit to Beijing in November 2013 and the annual meeting of the JCCT the following month. These engagements resulted in China's revision of the policy on data supplementation in late 2013, and a commitment to work with the United States to follow up on 42