Protection of Intellectual Property Rights specific to Patents in the U.S, the requirements, conventions and its impact on China; the new member in the World Trade Organization.




© BG Strategy  2002 All Rights Reserved






















September 30, 2002




............................................... 1

I.      ABSTRACT.. 3



1.What is Intellectual Property Rights and what is a Patent?. 7

2.     United States Requirements. 8

2.1       The United States (U.S.) Patent Law Overview and Patent Rights. 8

2.2       Title 35 & 37 United States Patent Laws. 9

3.     Conventions. 9

3.1       Paris Convention for the Protection of Industrial Property. 10

3.2       GATT Agreement 10

3.3       World Intellectual Property Organization (WIPO) 13

3.4       WIPO's relations with the World Trade Organization. 14

4.     Peoples Republic of China (PRC) 15

4.1       China accession into the WTO Brief History. 15

4.2       China commitments to IPR. 17

4.3       People’s Republic of China State Intellectual Property Office (SIPO) 20

4.4       Patent law of PRC.. 20


1.     Introduction.. 24

2.     Evolutionary History of the Chinese Characters. 25

3.     Case Study - The Patent Application.. 26

4.     IETF and China’s requirements. 28

5.     China’s commitment associated with the Patent Application.. 30


1.     What are the United States/China requirements relative to Patents?  32

2.     How do conventions play a role in meeting these requirements?  33

3.     When going abroad to China are the patents protected today since China’s commitments as part of the accession into the WTO?. 34





Piracy associated with Intellectual Property Rights (IPR) in China in the past has been the norm.  As part of the accession process into the World Trade Organization (WTO), China has provided many commitments one of which includes adherence to international rules and conventions.  Protection of Intellectual Property Rights specific to Patents for two countries the U.S. and China is thus analyzed through the evaluation of each countries process, requirements, and world conventions (i.e., Paris Convention, General Agreement on Tariffs and Trade known as GATT, World Intellectual Property Organization known as WIPO and others).  A case study is presented of a current patent application for Internationalized Domain Name System (DNS) with Iterative Conversion filed with WIPO to demonstrate how the Patent application is processed, the implication when dealing in an international environment in this case the U.S. and China, the complexities associated with the patent application that involves the standardization of the DNS tackled by the Internet Engineering Task Force known as the IETF, and the current issues in China and the Chinese commitments as part of the recent accession process into the WTO.  This paper is not set out to give answers to a difficult issue, but it is a mere example of the process in an international environment and a means to evaluate the situation.  Additional research and future events will determine if the process for IPR protection specific to patents and the world expectation as part of the commitment in China will be implemented and curb a well known reputation of piracy.



There is a strong will by the “new generation of Chinese companies … to play” the game “by the rules.”  But that has not been the case for a country where piracy has been the norm.  Even global pressure by foreign lawyer has not been an impediment for the Chinese to prevent or even reduce the amount of piracy associated with Intellectual Property Rights (IPR).  However, emerging companies in the Republic of China who want to sell their products abroad are filing new patents on the international market.  Does that mean that patents filed today outside of China on the international market are secure from piracy when entering the new open market economy represented by the People’s Republic China? 


A satisfactory answer would be misleading.  With a population of over 1.2 billion people in 2000 and a territory of 9.6 million square kilometers, reform has been slow.  The People’s Republic of China, led by the Chinese Communist Party has been conspiring since the late 70’s to increase the Chinese Gross National Product (GNP) in order to “lift millions of Chinese out of poverty.”  An essential component has been to establish a market economy that opens the doors to the outside world. It also meant moving away from state owned companies to privatization of many of its industries.  It is an undertaking of an economic and political challenge that has already been faced by unemployment, corruption, and crime. 


The People’s Republic of China political implication in the implementation of this reform is facing a battle among its parties.  With a new and modern working economy there are issues to resolve such as a rational tax regime, a pension system and unemployment benefits.  Unlike in the past, the parties are committed to moving forward with the economic reform and thus are actually debating these issues. There is a sweeping move to allow people to take part in voting for their leaders using secret ballots.


Since 1991 the People’s Republic of China has experienced a growth in private businesses of more that 7.5% “(private business defined as companies with more than eight workers). At the same time the People’s Republic of China economy has been growing by 7-8% per year.  The gross industrial output has also grown see Figure II - 1.

Yuan Trillion


Figure II – 1.  Gross Industrial Output by Ownership


With the evidence of change the question to be answered is whether IPR protection can be realized and in the near term particularly in the protection of patents.  Governmental polices are not the issues of this paper, but rather the implementation process.  This paper concentrates on two nations, the United States and China.  It moves to evaluate the requirements in both nations, the international conventions in Patent protection and People’s Republic of China commitments as a new state member in the World Trade Organization (WTO).


There are three questions set out for this paper to analyze as follows:


  1. What are the United States/China requirements relative to Patents?


  1. How do conventions play a role in meeting these requirements? And


  1. When going abroad to China are the patents protected today since China’s commitments as part of the accession into the WTO?


A detail analysis of each of the above will be discussed in this paper.  However to truly understand the implication, a case study is introduced to demonstrate the process in patent protection, the key elements of how the conventions play a role in meeting these requirements and the interrelationship with the People’s Republic of China regarding patent protection. 


The case is a recent case of a United States company who has filed a patent application with the World Intellectual Property Organization (WIPO). Historically, e-mail addresses and Uniform Resource Locators (URL) were only available in Latin alphanumeric characters. Now there is a demand by Chinese and other countries with non-Latin alphanumeric characters for e-mail addresses and URL’s to be written in their native language.  A company in the United States developed a technology that would allow Chinese and others to use their own characters.  The patent application is a request authorizing access to domain names in other than Latin letters through access to WorldNames “MLDNS” and multilingual Domain Name System products. 


There are several issues that have evolved as part of this patent application. There is an international requirement on domain names.   Any data transmitted over the Internet is regulated under the auspices of the Internet Society located in Reston, Virginia, U.S.A. and maintained by the Internet Engineering Task Force {IETF).  What is the role of WIPO in processing this International patents? And the issues presented by the People’s Republic of China with its main concern over deciphering between traditional Chinese characters and modern Chinese characters. 


One more note, one needs to understand.  Why is this issue of patent protection important and of value at this point in time – what has changed?  Since 10, July 1986, the People’s Republic of China formally requested to resume its member state status as part of the General Agreement on Trade and Tariffs (GATT). China stated that China's consistent efforts to resume its status as a contracting party to GATT and accession to the WTO Agreement were in line with its objective of economic reform to establish a socialist market economy as well as its basic national policy of opening to the outside world.  China's WTO accession would increase its economic growth and enhance its economic and trade relations with WTO Members.


After 15 years of active negotiation with the WTO, as of November 17, 2001, China has been accepted as a member state of the WTO.  As part of the acceptance, China has made significant commitments, one of which includes Intellectual Property protection.  Knowingly that the Chinese intellectual property laws have been lax for many years, this paper will also describe the changes as they have occurred over the time period following the decision to become members of the WTO.



1.What is Intellectual Property Rights and what is a Patent?


The topic of this paper is about Protection of Intellectual Property Rights specific to Patents, it is therefore important to first define IPR and define what is a Patent.  We start by providing the definition of IPR.  So what is IPR, IPR is a legal right to a creator that has invented, written, created either a symbol, a name, an image or a design that is intended to be used in the business commerce.  It is an expression that is given legal rights in exchange for a fee to be used in the public domain.  IPR protection is granted for a certain amount of time.  The creator thus has control over the intellectual property (IP) during that time period. 


There are two types of IP’s, Industrial Property and Copyright.  For this paper we will concentrate on the Industrial Property that consists of inventions.  Any creation or an invention is thus eligible for a patent.  Patents are then provided with exclusive rights to protect a process, a solution or any new idea(s) that are technically inclined.  An owner/(s) who files for patent protection is than granted protection for usually up to 20 years. 


Once filed an owner/(s) is protected from the public in a way that the idea cannot be recreated and sold, or distributed on the commercial market without the consent of the owner.  This is an area that has been ignored in China for many years.  The owner/(s) have exclusive rights to transfer or sell the right of the invention.  Ideally it is a document that can be used in courts for the purpose of enforcement.  


China has been able to mimic patented invention, because part of filing a patent for an invention, an owner/(s) discloses to the public the specific details of the invention in order to gain the protection requested.  The reason owner/(s) must disclose the specific of their invention is for the intent of being one of a kind invention and also encourages the public to further invent in the same area for other activities.  


Inventors can file for patent protection in their own country, in two-three countries or through a single filing for an international patent protection.  If the patent is filed in the home country, filing is done in a national patent office.  If there is an interest to file in two - three countries, the owner/(s) must file with a regional office that represents the countries of interest.  For an international patent protection in several countries an owner/(s) would file at the World Intellectual Property Organization (WIPO). 


Patents are usually brought to a court for enforcement by the owner/(s).  The owner is given a statutory right to prevent others from mimicking the invention.   It is, therefore, understandable that an owner of a patent living outside of China would have had difficulties enforcing piracy issues where policies have not to date supported enforcement rules.  This will be discussed further in China’s commitments to IPR as part of a new member in the WTO.


2.  United States Requirements

2.1 The United States (U.S.) Patent Law Overview and Patent Rights.


The laws of the Constitution govern the people of United States of America.  Congress has been empowered to enact the laws of the constitution.   Article I, section 8 of the U.S. constitution reads as follows: “The Congress shall have Power To … Promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” This is an explicit right to the citizens of the U.S. as a protection to inventors against piracy or other unlawful conduct.  Congress has enacted specific laws that apply to inventors for patentability of their invention.  These U.S. laws are codified laws specific for patents under Title 35 – Patents and Title 37 – Code of Federal Regulations Patents, Trademarks, and Copyrights.  In addition, Congress enacted the American Inventors Protection Act of 1999.  These laws are intended to provide guidelines on how to file and obtain a patent, and patent right.


U.S. Patents prior to 1995 were issued for a period of seventeen years.  However, following the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) held in 1994 specific to Trade-Related Aspects of Intellectual Property known as TRIPS, U.S. patents are now issued for a period of twenty years from the date of application. In addition, U.S. patent laws incorporated into Title 35 the 1975 Patent Corporation Treaty and the 2000 Patent Law Treaty. (The GATT Agreement, TRIPS, Patent Corporation Treaty, Patent Law Treaty and its implications on Patents will be further discussed under Section 3 Conventions). 


The U.S. Patent and Trademark Office (USPTO) is the federal agency that is in charge of administering U.S. patent laws.  The USPTO is regulated under the U.S. code Title 35 & Title 37 as mentioned earlier.  Patent applications are filed with the USPTO.  The USPTO entitles patents following examination of application and detailed specification of the invention, records, publishes and maintains patent files for U.S. patents and foreign patents.   The USPTO issues a patent to the inventor(s)/owner(s) granting to the inventor (s)/owner(s) “the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States”


Another function as discussed earlier under what is a patent; the USPTO is charted with disseminations of patent information in order to facilitate development and sharing of new technologies worldwide. If there are any issues, however, such as infringement of patents, the U.S. federal courts then has exclusive jurisdiction. 


U.S. patents are only granted exclusively throughout the United States and its territories.  U.S. patents have no impact in countries outside of the U.S.  It is known that almost every country has its own patent law, as we will discuss China’s patent laws later.  An inventor (s)/owners(s) who wish to have patent protection in other countries must apply in that country or with an agency of several countries or with WIPO in order to obtain an international patent.


However, under the U.S. law, inventions made in the U.S by inventor(s)/Owners (s) are required to obtain a license from the Director of the USPTO before applying for a patent in a foreign country.  This is required if a foreign application is planned to be filed before an application is filed in the U.S. or before the expiration of six months from the filing of an application in the U.S.

2.2       Title 35 & 37 United States Patent Laws


As discussed in the earlier section Title 35 and Title 37 are the governing laws for patent protection in the U.S.  Below is a description of each of these titles:


2.2.1        United States Code Title 35

Title 35 is divided into four parts.  Each part provides a detail description applicable to the heading of the Part.  The majority of the descriptions in Title 35 are processes to be adhered to by all parties involved that include the patent issuance office and their responsibly, the patent filer, down to the U.S. court entity involved in protection rights when legal action arises. The four Parts of Title 35 includes; Part I a discussion of the U.S. Patent and Trademark Office – their roles and responsibilities as the issuing office; Part II a discussion of patentability of inventions and the granting of patents - the filing process and fees associated with patent filing; Part III includes the legal implication in patents and the protection of patent rights - amendments, infringements and remedies; and Part IV includes a brief description of the Patent corporation Treaty – a description of the international and national stage of patent filing in the U.S (the Patent Corporation Treaty will be discussed in detail in Section 3.3.2 of this paper) .

2.2.2        United States Code Title 37

Title 37 is a Code of Federal Regulations for Patents, Trademarks, and Copyrights.  Title 37 provides the rules of practice in patent cases and a detail description that is mostly relevant to the patent filing party.  Title 37 is divided into seven subparts that include: Subpart A providing a general provision involved in patent filings including fees; Subpart B provides for the National Processing Provisions that is a description of who may file for a patent, the specific details in actually filing the application, the specification, the drawings and/or exhibits, examination of application, amendments and other relevant provision associated with processing a patent application; Subpart C is the International Processing Provisions as was described in section A of this paper – the request to file an international patent application and its provisions; Subpart D is the Ex Parte Reexamination of Patents – this includes the citation of prior art in patent files and the evaluation of a question of patentability for the resolution of the question through reexamination; Subpart E is Interferences in Patent Filing; Subpart F is the Adjustment and Extension of Patent Terms; and Subpart G includes the Biotechnology Invention Disclosures for specific biological material requirements.

3.     Conventions


There are several conventions and agreements that play a key role in influencing patent laws internationally and domestically.  State members from around the world are parties to these conventions if they have ratified these conventions and agreements.  These conventions and agreements are binding once the legislatures within the ratifying states adopt them as a domestic law.  The following is a list of conventions and agreements that apply to Patent law.  Each will be discussed in detail in this section.


3.1 Paris Convention for the Protection of Industrial Property

3.2 General Agreement on Tariffs and Trade (GATT)

3.2.1    World Trade Organization (WTO)

3.2.2    GATT Council for TRIPS, Annex 1c - agreement on trade-related aspects of IPR

3.2.3    Annex 1c - Article 2, 3, 4, 5, 68, 69, 70, 71

3.3 World Intellectual Property Organization (WIPO)

3.3.1    Patent Corporation Treaty

3.3.2        Patent Law Treaty

3.4  WIPO's relations with the World Trade Organization


3.1             Paris Convention for the Protection of Industrial Property


The Paris Convention for the Protection of Industrial Property was formed in 1883 in Paris, France.  It was the first significant international treaty that provided aid in the protection of intellectual creations in several countries.  Protection included inventions known as Patents, Trademarks and Industrial designs.  14 member States in 1884 ratified the agreement and thereby created an International Bureau to perform the necessary administrative requirement in implementing the agreement.


The countries, which were part of the ratified agreement, were then granted protection of industrial property for example for patents.  This agreement applied to all industries and commerce including agricultural.  Specific to Patents, the Paris Convention included protection against to all industries that were recognized by the laws of the ratifying countries at the time known as the Union.


The Paris Convention allowed any country in the Union to be granted protection of its industrial property in all the other countries that were part of the Union.  All respective laws were now granted to Union members without discrimination including legal remedies. The Paris Convention, however, did not provide protection that imposed gain in industrial property right gained in one country over the other in the Union.  It is still in the authority of each member Union to follow judicial and administrative procedures including jurisdiction and appointment of an agent in their own countries. 


As applicable to this paper it is important to note the dates of when the United States and the People’s Republic of China became a party to the Paris Convention.  The United States became party to the Paris Convention on May 30 1887.  The Paris Convention has been amended several times since its inception.  Therefore the United States became party to the amendments of Articles 1 to 12 on August 25, 1973, and Articles 13 to 30 September 5, 1970. The People’s Republic of China became party to the Paris Convention on March 19, 1985.  As is evident, the People’s Republic of China had and continuous to have a great interest in complying with world agreements and conventions in this case specific to patents in order to open up its market economy.

3.2 GATT Agreement


3.2.1  World Trade Organization

Following World War II there was a need to liberalize trade rules and reduce trade barriers among countries in order to improve the free movement of goods.  In 1947 the General Agreement of Trade and Tariffs (GATT) was established with 23 nation members one of whom included the United States.  The GATT agreement was amended following negotiations that took more than a decade and a new GATT agreement was formed known as the GATT 1994 Agreement.  By then 125 nation members became a part of the signatory members of the agreement.  The Uruguay Round negotiations that led to the GATT 1994 agreement also created a means of international law that can regulate trade agreement.  This was done by the creation of the World Trade Organization (WTO).  WTO’s role has the responsibility of administering the rules of trade between nations.


Headquarter in Geneva, Switzerland, WTO provides the legal ground rules for international commerce.  It is a contract with nation members guaranteeing member nations trade rights and requires member nations to retain their trade policies within the agreements set forth in the GATT Law. 


The principal of the trading system includes customs tariffs, agriculture, textiles, services, intellectual property (Section 3.2.2-3.2.3 will discuss this agreement in detail), anti-dumping, subsidies, emergency safeguards, and technical and bureaucratic barriers.  WTO also has been set out to settle disputes for the stability of the world economy. 


As of 1 January 2002, WTO member nations have increased to 144 nations.  It is important to note that over three quarters of the member nations of the WTO are nations that are developing or least developed.  The reason this is introduced here is because the People’s Republic of China is considered a developing country.  Since China became members of WTO 17 November 2001 they are eligible for the special provision established for developing countries.  The provision include a longer time period to implement the agreements and the commitments made as part of becoming member nations. Other provisions include increase of their trade opportunities, support to build infrastructure, handle disputes and implement technical standards. 


It becomes clear now that even Patent Protection in China is at its infancy level and there is work being done to implement some of the rules that apply and play as a key role to the requirements of the conventions.  So what are some of the GATT agreements that apply see Section 3.2.2-3.2.3 below. 


3.2.2        GATT Council for TRIPS

Intellectual property has played a significant role in trade in recent years, therefore it was important to create ground rules for intellectual property rights.  In addition if any disputes arose there was a need to have an established settlement environment. 


As was mentioned earlier the Uruguay Round talks that lasted from 1986-1994 was used as an instrument to the creation of the GATT 1994 agreement and the Agreement on Trade-Related Aspects of Intellectual Property Rights known as TRIPS.  TRIPS provide protection of intellectual property rights that is common to all member nations. WTO then is able to assist in resolving disputes in the areas of Intellectual Property Rights.  GATT Annex 1c – agreement on trade-related aspects of IPR is the agreement that describes in detail the specific rules. 


There are six issues that are covered under the TRIPS agreement.  They include:



The specific details of the TRIPS agreement is further described in detail below: 


The basic principles of the intellectual property agreement parallels that of the GATT 1994 agreement stating that member nations provide national treatment to member nations as it treats it’s own nationals in a non-discriminatory principal.  Provide most-favoured-nation treatment by an unconditional equal treatment for all nationals that are trading.


The TRIPS protection of Intellectual Property rights allows inventors or creators that were granted patent the right to forbid anyone from creating copies of the invention.  The Agreement identifies an understanding that limited time intellectual property protection as described in our what is a Patent section III 1 is used as an incentive to encourages others to develop new technology or new ideas.  Therefore, it specifically stated that Intellectual Property rights are a means to enhance economic and social welfare in society.


The protection of intellectual property involves having common ground-rules that uses the organizations that set out the agreements as the obligators to monitor and enforce intellectual property protection.  The organizations include WTO, which has been discussed earlier, and the World Intellectual Property Organization (WIPO), which will be discussed in detail in section 3.3.  Although the agreements set out by these organizations do not include all element that would provide a wide range of protection, the TRIPS agreement aides by providing additional guidelines that were considered insufficient in the GATT agreement.


The TRIPS agreement specific to Patents protection provides a 20-year protection period for both products and processes.  There are specific guidelines that provide protection to patent owners and some exceptions.  The agreement works both ways, protecting the patent-owner and protecting the endorsee of the patent (i.e. government agency).  If a patent-owner fails to actually use the patented product/process on the market the endorsee is protected by allowing other options to occur such as licensing of the patent to a competitor.  It seems harsh but protection in the TRIPS agreement looks at the whole picture.  The circumstances, however, must be significant for an endorsee to take such measures as explained. 


The TRIPS agreement is a written document that provides directives and guidelines.  The issue at hand is enforcement.  Of particular interest in our case is a Patent protection across boundaries in our case moving a product/process from the U.S. to China.  How do you enforce patent protection for these circumstances?  The TRIPS agreement authorizes governments to step in and use their laws and penalize those for violations.  The penalties must be significant enough to mitigate any further violations.  This is not to say that the proceedings should be complicated or extended over a long period of time.  The TRIPS agreement provides some examples of proceedings in handling such infringements and details on enforcements. 


It is interesting to note that such enforcements have not worked in the past when dealing with China.  But as will be discussed later during the discussion of the Chinese IPR protections process in section 4, the question of whether conventions play a role in meeting patent protection requirements will be further analyzed to determine China’s obligations today.


3.2.3        Annex 1C Articles 2, 3, 4, 5, 68, 69.


The GATT agreement as was mentioned earlier was created as a means of international law that can regulate trade agreement.  There was a discussion of the role of TRIPS as it is associated with GATT.  However, it is important to understand in further details within TRIPS the specific elements that describe the agreement itself as it relates to Patents that bring forth establishment of processes and enforcement when dealing with Patents in an international environment (i.e., U.SA. and China as set forth in this paper).


The following provides a brief description of each Annex Article that is relevant and an important guideline in international patent issues. 

·        Article 2 Intellectual Property Conventions brings forth the agreement that compliance is conducted in accordance with the Paris Convention.

·        Article 3 National Treatment provision is for member states to received no less favorable treatment than its own nations in the area of IPR and in compliance with the Paris Convention.

·        Article 4 Most-Favoured-Nation Treatment states that member nations are not to provide “any advantage, favor, privilege or immunity” to another member nation over any other member nation unless there was an international agreement that allows such a favorable treatment over other member nations.

·        Article 5 Multilateral Agreements on Acquisition or Maintenance of Protection.  “The obligations under Articles 3 and 4 do not apply to procedures provided in multilateral agreements concluded under the auspices of WIPO relating to the acquisition or maintenance of intellectual property rights.”

·        Article 68 Council for Trade-Related Aspects of Intellectual Property Rights.  It is the responsibility of the council for TRIPS to insure that the members comply with the TRIPS agreement and provides assistance to member nations. However, when working with WIPO, the Council for TRIPS must within one year make the necessary arrangement for cooperation.

·        Article 69 International Cooperation is an important article because it demands that member nations cooperate with each other when it comes to trading where intellectual property is involved in order to insure that there are no infringements in the trade of goods.

3.3    World Intellectual Property Organization (WIPO)


WIPO is an international organization that originally dates back to 1893 from its predecessor organization know at the United International Bureaux for the Protection of Intellectual Property (BIRPI).  This organization was created as a union representing the Paris convention (as discussed earlier) and the Berne convention Bureaux.  By 1967 BIRPI became WIPO, a specialized agency of the United Nations responsible to administer intellectual property rights to the signatory member states of the United Nations and ensure cooperation among its union members.


Located in Geneva, Switzerland, WIPO’s key responsibilities include encouraging the use and protection of IPR, harmonize national IPR of member states, provide international filing services, and facilitate enforcement rules of IPR.  WIPO administers these responsibilities through international treaties specific to the various elements of IPR.


Of key importance to this paper are the Patent Corporation Treaty of 1970 and the Patent Law Treaty of 2000 that has been adopted by the two-member state in this particular case the United States and China.


3.3.1        Patent Corporation Treaty

The Patent Corporation Treaty was established in 1970 by WIPO as a convention for the state members known as Unions to obtain cooperation from members to harmonize filing, searching and examining of international patent applications.



3.3.2        Patent Law Treaty

Due to the continuous changes particularly in technology and other areas, WIPO has broadened IPR protection through the administration of additional treaties.  The Patent Treaty Law of 2000 is another treaty that was agreed upon international by member states for common changes for IPR protection that applies to member state territory.


The Patent Law Treaty basic principles are that any State or inter-governmental organization that is party to this treaty is to provide more favorable requirements to owner/s of a patent, and are independently free to impose the requirements of this treaty as it applies to the patented filed.  


Although the Patent Treaty Law is an independent treaty, State or inter-governmental members are still obligated to comply with the provisions of the Paris Convention, including not deviating from the responsibilities to each other and provide the rights granted to owner as described earlier. 


The Patent Treaty Law is extended to any State or inter-governmental organization that is a party to the Paris convention or that is a WIPO member.

3.4    WIPO's relations with the World Trade Organization


The World Trade Organization (WTO) was established with the successful conclusion of the Uruguay Round GATT Multilateral Trade Negotiations on April 15, 1994. One of the negotiated agreements is the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which came into force on January 1, 1995. The TRIPS Agreement brought with it a new era in the protection and enforcement of intellectual property rights, enhancing the value of WIPO's program of work.


Provisions in the TRIPS Agreement concerning copyright and related rights, patents, trademarks, geographical indications, industrial designs, and layout designs of integrated circuits, directly complement international treaties and conventions which the secretariat of WIPO and its predecessor have serviced, in some cases, for more than 100 years.


On January 1, 1996, an Agreement Between the WIPO and the WTO entered into force. It provides for cooperation concerning the implementation of the TRIPS Agreement, such as notification of laws and regulations and legal-technical assistance and technical cooperation in favor of developing countries.


 In July 1998 a joint initiative to help developing countries meet their TRIPS obligations in the year 2000 was launched.  Assistance continues to be provided post-year 2000 deadline for many developing countries.  Special attention is given to those least-developed countries that need to meet their TRIPS obligations by 2006.

4.    Peoples Republic of China (PRC)


We have discussed the United States requirements, its laws and the process.  The international conventions were introduced next.  It is now time to discuss the PRC requirements, the commitments made as part of the accession process and the evolutions of its patents laws.  This section has been divided into four areas all of which will be discussed in detail as follows:


4.1              China accession into the WTO Brief History

4.2              China commitments to IPR

4.3              People’s Republic of China State Intellectual Property Office (SIPO)

4.4              Patent law of PRC

4.1 China accession into the WTO Brief History


It is important to first provide a brief history about China and its accession process into the WTO in order to understand the changes in intellectual property protection specific to patents in the Chinese market.


China has a long history that dates back as early as 221 BC with a long cultural and national history.  However, for this paper, of relevance is at the beginning of the formation of the Chinese Communist party in 1921.  The Chinese Communist party is the primary political force in China. It is a tightly organized movement that controls and leads society at all levels.  When it was first established its primarily focus was on organizing urban workers, but it achieved only limited success in this effort.  It did not work for China because the theory was based on Karl Mark’s theory that was depended on a highly industrialized economy.  China was not highly industrialized it was actually primitive.  Nevertheless, Mao interpreted the Marxism theory and officially decided to use his interpreted theory and the guiding philosophy for the party and the government.


In 1947 the General Agreement on Tariffs and Trade (GATT) was formed, China was one of the 23 nations original signatory of GATT, but due to the revolution it relinquished itself as a member in 1949. By Oct. 1, 1949, Mao Zedong proclaimed the establishment of the People's Republic of China. It was the creation of what is known as the people’s democratic dictatorship.  Over 4.5 million people claimed membership to this organization at the time 90% were of peasant origin.  


Although the first communist government included non-communist among its member, by 1954 the establishment of the new constitution drastically curtailed the role of the none–communists.  The power was shifted to a state council that was held together by the central committee.  Many changes took place when the communist party was established.  These changes included land reform, social reform, thought reform, and economic reform. 


The communist government redistributed land from the landlords to the peasants under the land reform law.  There was no more a social distinction between the landlord and the peasant.  Socially children were encouraged to support the communist line even if their parents did not fully support this and thus encouraged to denounce their parents. Massive campaigns in China were devised to change the thought and habits of the people.  Here the motive was to eliminate corruption, waste, bribery, tax, fraud, cheating and stealing state property.  In addition they denounced religion as cultural imperialism.  Other changes included collectivization of agriculture where farmland was pooled into cooperative to control production price and distribution. 


From 1950 through 1971 during the time when the communist party was being established the USA imposed a trade embargo on China.  Other western nations establish the same embargo. In 1972 the U.S President Richard Nixon visited China and setting the stage for eventual normal diplomatic contacts with the west.


In order to improve the economy, industry and technology the communist party tried to establish communes throughout the country.  This did not work and led to the cultural revolutions that nearly severed relations with the outside world. It was a revolution of the workers against party officials.  The Cultural Revolution had its roots in a power struggle between Mao and his supporters.  Mao feared that the Chinese society was becoming rigid, and to prevent this he relied for support on the military and on youth.  The revolution caused a generation of youth to go without education; factories and farms were idle and China fell even further behind the industrialized powers of the world.  This revolution ended in 1977.  By 1978 Deng Xiao Ping rose into power ushering economic reform and launching China’s open door policy.  In addition the party and government relaxed their control over the people and granted certain civil rights.


Deng Xiao Ping emerged as an outstanding figure within the leadership.  An elderly man himself, he brought in younger men who shared his views.  The new policies created a state constitution that was adopted in 1982.  The biggest effort included the acceleration of China’s economic development.  By 1986 China applied to re-join GATT for the purpose of resuming its membership.  However, by 1989 following the Tiananmen Square incident China was suspended for two years and severed its relationship with the outside world.


Deng Xiao Ping emphasis was the principals of modernization, which included agriculture, industry, national defense, science and technology.  The ideology was to replace the Maoist influence of the revolutionary spirit to a practical value.  Education and academic achievement were emphasized.  Experts were now used in industry and peasants were allowed to own private land. A campaign was also in place to slow the rate of population increase and try to achieve a 7% per year economic growth rate.  Since Deng Xiao Ping and the political struggle in the 80’s a new leader emerged Jiang Zemin an heir to the senior Deng Xiao Ping.  Jiang Zemin did declare that he did not want the west to undermine the China’s party but continued to move forward with economic reform.  Since 1986 China was involved in the bilateral negotiations with WTO members.  Negotiations included preparations of schedules of market-access commitments in goods and specific commitments on service


The political changes in China were very small by the 1990’s; its economy had become the fastest growing in the world.  The issue of human rights became issues in trade talks.  Trade talks itself became a major issue.  Exports to the United States exceeded imports and there were the issues of a probable possession of nuclear weapons by North Korea that became an unsettling problem for China.  Due to the circumstances the accession processes was taking time.  China had to meet the rules and obligations of the WTO's market-economy principles, and its policies of pro-competition and non-discrimination.  This included as well the issue of IPR protection and the ongoing piracies of intellectual properties.   In 1996 China signed a deal with the U.S. to strengthen protection of IPR.


In addition, in 1996 the EU proposed that China have a transition period to implement certain elements that were part of the WTO obligations following the accession process.  This was a significant step for China and the acceptance by WTO members.  By 1997 China agreed to phase out its trading monopoly and to grant full trading rights to all Chinese and foreign individuals and companies within three years of accession.


In 1998, following a trip by President Clinton to China it boosted United States and China’s relationship that made serious negotiations on World Trade Organization membership possible. In 1999, Chinese Premier Zhu Rongji visited the U.S. in an effort to clinch a deal on China’s membership into the WTO.  There were no results from that visit a setback for China.  With some set backs since 1998, China finally concluded bilateral market access agreement with the United States, the European Union and other major markets on November 15, 1999.  The agreement called for most of the Chinese market to open by year 2005.  On November 17, 2001 China became a member state of the World Trade Organization following 15 years of negotiations and political instability. 

4.2 China commitments to IPR


As has been evident China has made commitments as part of the acceptance into the WTO to protect intellectual property rights as an essential component of a nation wide reform and an open door policy.  This has been undertaken through the construction of a socialist legal policy and a dedicated organization charted to implement this policy.  As was mentioned in the history section of China accession process, the legal regulatory changes and structure of IPR was incepted in the late 1970s.  The process included China’s effort to accept and participate in international conventions as the legal binding agreement among nations for the sole purpose of IPR. Once China decided to enter the WTO it has also made an effort in exchanges and cooperation with other member nations to entrust agreements and ensure IPR protection policy in China will be in compliance with those agreements.  This effort therefore provided a base in assisting China in the development and implementation of IPR protection aimed at meeting an accepted world standard. 


The key structure of IPR protection in place today in China is described in detail below.  It is however important to note that the reform process is still underway and not all issues have been resolved.  Additional detail is provided to describe some of the element involved in IPR protection as part of the reform.


China became a member of the World Intellectual Property Organization in 1980. In 1985, China became a member of the Paris Convention for the Protection of Industrial Property.  In order to comply with the WTO Agreement and be in compliance with the TRIPS Agreement additional amendments were necessary to the PRC Patent Law (further details about the PRC Patent Law is described in section 4.4.  The implementation effort of revising the IPR laws has not been an easy chore.  PRC prepared a list of IPR laws that was necessary to be revised as part of the reform process.  Some laws were abolished while others were amended as part of this effort. As part of the consolidation effort PRC also created the State Intellectual Property Office known as SIPO that now has specific responsibility for patent approvals in comparison to one governmental agency responsible for several tasks not specific to patents.  Additional information about SIPO responsibilities are described in Section 4.3.


The patent law was revised in 1992 for the first time as part of preparation for the accession to the WTO.  This updated entailed ensuring that there is consistency with the TRIPS Agreement in terms of major provisions and protection standards.  The first round of patent law updated was just the beginning of the process.  The main issue in PRC is public awareness.  As was mentioned earlier Patent protection in PRC was not enforced.  So, to increase the awareness of the general public on IPR protections, and patent protection, become consistent with the TRIPS Agreement, and to build up a sound social environment for the promotion and commercialization of inventions, the National People's Congress approved a second round for revisions to the Patent Law that were implemented on in the year 2000.  The amended Patent law only took effect on in mid 2001.  Some of the required changes included the following important elements:


(1)                          Patent owners would have the right to prevent others from offering for sale the patented product without their consent;

(2)                          For utility model and design applications or patents, the final decision on re-examination and invalidation would be made by the people's courts other than for inventions that were patented prior to the amendment; 

(3)                          Patent owners could, before instituting legal proceedings, request the people's court to take provisional measures such as to order the suspension of infringing acts and to provide property preservation; and

(4)                          The conditions for granting a compulsory license would be further clarified and made consistent with the TRIPS Agreement.


As is evident the amended changes have only been implemented for one year at the time of the writing of this report.  SIPO has had a significant task in compliance issues to insure the implementation process were in effect.  SIPO has had to pay great attention to strengthening its contacts and coordination with relevant departments and ministries in the field of IPR law enforcement, especially in the areas of settling inter-agency problems and resolving key cases.  At the same time, SIPO had taken appropriate measures to improve the performance of local patent authorities in law enforcement. 


Another key issue in the amendment efforts was to ensure compliance with the TRIPS Agreement.  A significant change in the language of the patent law was necessary to fully comply with the requirements of the TRIPS Agreement.  In the first round of the patent amendment in the PRC (1992) a statement from Article 11 of the PRC patent laws had the following: "any entity or individual is, without prior licensing from the patentee, prohibited from making, using or selling patented products or patented processes, or using or selling products directly obtained by the patented processes for the purpose of production and operation".  It was also prohibited for any entity or individual to import patented products or products directly obtained by patented processes for the purpose of production and operation.  This modification expanded the scope of patentees' right, namely the new content of  "the right to prohibit import" and "the effect of patented processes has been extended to products directly obtained by patented processes".  In the amendment completed in 2000, Article 11 had to once again be modified. A new stipulation was introduced granting patentees the right to prohibit others from offering for sale the patented products or products directly obtained by patented processes without the consent of patentees.  Therefore, so far as "the right of patentees" is concerned, PRC was able to fully accommodate the requirements of the TRIPS Agreement.  Such changes are significant in a culture where such protection was unheard of only 10 years ago.


Another significant issue in the amendment of the 1992 Patent Law was the requirements of compulsory licenses based on reasonable terms, for public interest and for dependent patents.  With regard to the conditions of compulsory licenses for dependent patents, the Patent Law provided that the latter invention should be technically more advanced than the earlier one.  The TRIPS Agreement provides that "the invention claimed in the second patent shall involve an important technical advance of considerable economic significance in relation to the invention claimed in the first patent."  Since the provisions of the TRIPS Agreement were more transparent and easier to operate, the relevant expressions contained in the TRIPS Agreement were adopted in the new revision.  In addition, the following restrictive conditions for granting compulsory licenses contained in the Implementing Rules of the Patent Law of 1992 had been moved into the Patent Law in order to make it more authoritative.  SIPO was now able to grant a compulsory license for exploitation that would be limited in terms of its scope and duration; assuming such compulsory license ceased to exist and was unlikely to recur.  SIPO, upon the request of the patentee, could terminate the compulsory license after examination.


Not all the wording in the Patent Law was changed where it is identical to the TRIPS Agreement, but it was amended to meet the PRC requirements and maintained consistency with the TRIPS Agreement.  The changes provided a clearer structure and did improve the content.  Again not all the wording has been changed and incorporated into the PRC Law.  Some of the modification required includes as follows:

·        “Use without authorization of the right‑holder would only be permitted if, prior to such use, the proposed user had made efforts to obtain authorization from the right-holder on reasonable commercial terms and conditions, on the understanding that this requirement could be waived in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use;

·        The right-holder would be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization;

·        Any such use would be authorized predominantly for the supply of the domestic market;

·        In the case of semi-conductor technology, the scope and duration of such use would only be for public non‑commercial use or to remedy a practice determined after judicial or administrative process to be anti-competitive.”


These are still significant changes that are required for other member nations to be comfortable bringing products into the PRC to sell to their domestic market.  The change has not been rapid since the reality of taking action on reform issues is inevitably slow.   PRC has provided commitments to make these changes.  The reason these changes have not been made quickly is due to the layout of the accession process for PRC.  PRC has been allowed to make reform efforts in several phases as the market opens for PRC.

4.3 People’s Republic of China State Intellectual Property Office (SIPO)


The Patent issuing office plays a key role in patent transaction in any country.  For the sake of comparison between the United States and China a discussion is present to describe the SIPO office in China and its responsibilities.  Following is a discussion of the Patent Law is introduced. The formation of SIPO has already been discussed the responsibilities are now discussed in detail.  SIPO has direct authorities under the PRC State Council and is responsible for patent work and comprehensively coordination of the foreign related affairs in the field of intellectual property.  SIPO had the responsibilities to draft the revision to the PRC Patent Law and the responsibilities of implementing the regulations and patent execution.  Additional responsibilities include understanding foreign related IP policies, international communication, cooperation and exchange.


An important responsibility is the settlement and investigation of patent disputes, passing off of patents, agency cohesiveness through qualified patent agents domestically and when dealing with foreign related patent agencies.  And finally ensuring there is knowledge and understanding of PRC Patent Laws and regulations through out the public.


Internally SIPO operates like any agency in the world to some extent similar business practices known to the west.  External responsibilities include coordination of a comprehensively foreign related intellectual property affairs, organization and participation in negotiations relating to intellectual property treaties and agreements; including communication between related departments and WIPO and other international (foreign) intellectual property organizations.


On the next level SIPO has the responsibility of processing Patent applications which includes but not limited to examining and granting patent applications, examining request for reexamination, invalidation and other administrative functions given by SIPO.

4.4   Patent law of PRC


The Patent Law of PRC presented here is the translated version of the amended 1992 Patent law of the PRC.  Details of some of the changes that have taken place in the second amendment prepared in mid 2000 were discussed in detail in section 4.2. The reason the Patent law of PRC is presented here is for the sole purpose of comparing the two member nations the U.S. and PRC and demonstrates the changes as they have occurred and continue to occur. 


The first note that is important is the extent of the details describing the patent law of the United States and the details describing the patent law of PRC.  The United States patent law is a document that covers more than 84 pages of detail text describing each element of Code 35 to ensure the process is followed properly.  On the other hand the Patent Law of the PRC is a document that is no more than 10 pages long with very little detail.  There is a separate law that describes, again not in detail, Regulations on Patent Commissioning that is similar to the United States Code 35 describing the rules that apply to the USPTO.  The Regulations on Patent Commissioning covers eight distinct areas 1) The General Principals; 2) Patent Agencies; 3) Patent Agents; 4) Punishment and 5) The duration, cessation and invalidation of patent right, 6) Compulsory License for Exploitation of the Patent supplementary Articles, and 7) Protection of Patent Right.


The Patent Law of PRC is somewhat similar but not defined to the same extent as described in the U.S. Title Code 35.  The Patent Law of the PRC is divided in to as mentioned seven sections and they are described in detail as follows:

1)      The General Provision section – this section describes what constitutes a patent however, not in great detail for example in Article 1 and Article 2 of the provision the following is stated “Article 1 - This Law is enacted to protect patent rights for inventions-creations, to encourage inventions-creations, to foster the spreading and application of inventions-creations, and to promote the development of science and technology, for meeting the needs of the construction of socialist modernization.” And Article 2 “In this Law, "inventions-creations" mean inventions, utility models and designs.”  In comparison to U.S. Title Code 37 for the same provision provides a full page of specific definition of patentability of an invention where the meaning of an invention can be a discovery, a process, art or a method. 

The other element, which is emphasized in the Patent Law of PRC under this provision, is the role of the State.  It is still evidence that the State is a strong influential body that monitors the actions of patent assignment as is evident in Article 10 “Any assignment, by a Chinese entity or individual, of the right to apply for a patent, or of the patent right, to a foreigner must be approved by the competent department concerned of the State Council.”  And again the role of the State is emphasized in Article 14 “The competent departments concerned of the State Council and the people's governments of provinces, autonomous regions or municipalities directly under the Central Government have the power to decide, in accordance with the State plan, that any entity under ownership by the whole people that is within their system or directly under their administration and that holds the patent right to an important invention-creation is to allow designated entities to exploit that invention-creation; and the exploiting entity shall, according to the prescriptions of the State, pay a fee for exploitation to the entity holding the patent right.  Any patent of a Chinese individual or entity under collective ownership, which is of great significance to the interests of the State or to the public interest and is in need of spreading and application, may, after approval by the State Council at the solicitation of its competent department concerned, be treated alike by making reference to the provisions of the preceding paragraph.

2)   The requirements for granting of patent right.  This provision provides an extremely brief description of what would constitute eligibility for a patent.  In addition the word Novelty and Practicability are used to describe eligibility requirements as stated in Article 22 "Novelty" means that, before the date of filing, no identical invention or utility model has been publicly disclosed in publications in the country or abroad or has been publicly used or made known to the public by any other means in the country, nor has any other person filed previously with the patent office an application which described the identical invention or utility model and was published after the said date of filing. Inventiveness" means that, as compared with the technology existing before the date of filing the invention has prominent substantive features and represents a notable progress and that the utility model has substantive features and represents progress. “Practical Applicability" means that the invention or utility model can be made or used and can produce effective results.

3)      The application for patent. The Patent law of PRC here is once again very simplistic on the process of patent filing.  In comparison to the United States Patent code 35 where the code has specific instructions on who may file, the right of priority filing, and confidentiality of the status of the application. The Patent law of PRC is very similar as written in Article 26 - Article 33 of the Patent Law of PRC; however, since the legal process in the United States has been extremely developed it is understandable that the basics are only now thus far incorporated into the Patent Law of PRC.  The significant difference, however, in the Patent Law of PRC in comparison to the United States Code 35 is the confidentiality of the Status of the application there is no such references or such language indicating any assurances of confidentiality in the Patent Law of PRC. 


4)      The examination and approval of application for patent.  This provision is self-explanatory.  There are some differences between the Laws set forth in the PRC vs. the United States.  The difference is in the appeals process for patents in the United States.  The appeals process is explained in greater detail for cases where patent eligibility is rejected and there is a request for reexamination. In both countries there is a board that evaluates appeals. 


5)      The duration, cessation and invalidation of patent right. This provision provides a timeline for the patent, patent rights, the fees and when the patent rights expire. This area is not similar to the United States Code 35 because the discussion is spread out into various sub areas within the code.  Once again, however, Code 35 provides a greater amount of detail that is specific to the process in the United States.


6)      Compulsory License for Exploitation of the Patent.  Here is a provision that has been of significant in the past for the international community in conducting trade with the PRC.  Today the provision requires that a request be made for an authorization from the patentee of an invention that is assuming this entity is qualified to exploit the invention. Following a submittal of an application a license is granted the entity would be allowed to exploit the patent.  However, under the PRC patent law the state of affairs can grant a compulsory license to exploit a patent if there is a national emergency.  Another area where exploitation is possible is in the areas of a patent that is technically more advanced than a previous patent. What is interesting here is that the PRC Patent Law required proof that there was an attempt at contacting the patentee for a license.  The protection is that the Patent Office will grant a compulsory license for exploitation by registration and announcement.


7)      Protection of Patent Right.  PRC under this Patent Law provides protection of Patent Rights but not to the same extent provided in the United States.  According to the PRC Patent Law protection depends on the type of claim. In the case of an unauthorized exploitation the interested party must request the authority in charge to institute legal proceeding in the People’s court. The proceeding for legal protection due to infringements is stated as two years from the date of knowledge of the infringement.  A non infringement is further defined when the patentee sold the patent, when there is no knowledge that the patent was sold without authorization, when an invention occurred before the filing of an application and key to the discussion of this paper “Where any foreign means of transport which temporarily passes through the territory, territorial waters or territorial airspace of China uses the patent concerned, in accordance with any agreement concluded between the country to which the foreign means of transport belongs and China, or in accordance with any international treaty to which both countries are party, or on the basis of the principle of reciprocity, for its own needs, in its devices and installations” and finally if it is used for scientific research.


In addition, there is criminal liability for cases when a person passes a patent to another person, if a patent was filed in a foreign country and it reveals states secrets, a person takes the right of an inventor to apply for a patent and the Patent Office staff member act wrongfully.


1.  Introduction


On 29, November 2001, Daniel Pouzzner, an inventor and applicant filed an application at the WIPO for patent protection under the International Publication number WO 01/90955 A2.  The application is an international patent application that is guided under the Patent Cooperation Treaty titled Internationalized Domain Name System (DNS) with Iterative Conversion.  The invention is a system, method and logic for managing data, including database for the implementation of an operation to convert a key (i.e, a word) to a predetermined authorization to access domain names in other than Latin letters such as Chinese.  Historically, email addresses and URL’s were only available in English alphanumeric characters. With patent pending technologies by a company in the United State the barrier can be broken. This new technology would allow billions of Chinese people to have an email address and a URL in their native language.


The modern Internet provides access to a variety of information resources where the information can be in many different languages and scripts i.e., the content is internationalizable.  The access to this information is using a uniform naming syntax that work with various schemes for accessing different types of resources. Each of these resources is specified using a universal resource locator (URL) consisting of an access scheme identifier ending in a colon, followed by a path for locating the resource on a specific computer.  The access schemes are typically defined by standardized protocols (such as http), while the path normally includes the domain name of the machine that is providing or hosting the source. These domain names can only use a subset of Latin characters today (the subset is 'a' through 'z', '0' through '9', and hyphen). Thus the current state of the Internet is that the information content is internationalizable but the names used to access the resources are not.


Thus for instance a Chinese user can send email messages containing Chinese, but the user's email address will need to be in the above subset of Latin characters and not the user's actual Chinese name. Similarly for Chinese companies in that their web sites can contain information in Chinese, but the URL's used to access the web site cannot use Chinese characters.


We have just learned in the Requirements section what is the process in Patent application in a global environment particularly between two countries the United States and China.  This case study is set out to demonstrate how the process works in a “real world situation,” and China’s commitment as part of IPR protection associated with patents. This case describes the elements that have been used to file the patent application, the setbacks and the requirements. But prior to describing the case a brief history of the evolution of Chinese characters is introduced to demonstrate the complexity of the conversion process in section 2.  The case will be presented and describe the followings:


§         The Patent application – requesting authorized access to WorldNames "MLDNS" and multilingual DNS products was submitted for publication of WIPO International Publication No. WO 01/90955 A2 entitled.

·        What are the international requirements on Domain Names?

·        Specify the requirements for internationalized access to domain names and protocols and requirements.

·        Consequences

·        Problems

§   Any data transmitted over the Internet is regulated under the auspices of the Internet Society based out of Reston, Virginia and maintained by the Internet Engineering Task Force (IETF).  How has China’s commitment play a role in the international forum specifically with the IETF in the creation of the Internationalized Domain Name System?


Section 5 will conclude with an analysis using the case study and the actions by China to evaluate the sample patent application and ask if any other patents that are submitted today are well protected in the future in China

2.  Evolutionary History of the Chinese Characters


Chinese characters have evolved over a period of 6,000 to 7,000 years of ideographic symbols. The Chinese created a unique Chinese character system, which is a language of an ancient civilization and a long history with artistic value.  This is well known in China as the "fossil character".


The Chinese language is extremely concise when pronounced and has a grammar that is rich in vocabulary.  The language however, is extremely complicated in its structure consists of a large number of characters that makes it hard to learn and even memorize.  There have been extensive modifications to the Chinese characters.  It has moved from an ancient language to a modern language with modern characters but still in a calligraphic style. It has moved towards what is known as simplified Chinese.


Chinese characters have undergone three major changes in history.  During the Shang dynasty era the Chinese characters were written in hieroglyphic.  The next generation of Chinese characters was modified during the Qin dynasty and became a phonographic based on the hieroglyphic characters. The last era of the Chinese character today is a phonogram character that contains some hieroglyphic and some phonographic characters that defines the modern Chinese characters.


Today the Chinese characters are used mainly in Mainland China, Taiwan, Hong Kong, Macao, Japan, Korea, Singapore, Vietnam, and other countries and regions where a large number of Chinese people reside.


Simplified Chinese is mainly used in Mainland China and has proliferated China’s daily life.  On the other hand traditional Chinese is still used extensively, but in social life due to its history but more importantly due to its artistic value.


Traditional Chinese characters are used in Taiwan, Hong Kong and Maco.  Hong Kong and Maco however, following the reunification to Mainland China use simplified Chinese as well. There are a few unique differences in the character system between the traditional Chinese and the traditional Chinese characters. Neighboring countries such as Korea and Japan use traditional Chinese characters, and Singapore uses simplified Chinese Characters.

3.  Case Study - The Patent Application


As was mentioned a Patent Application was filed with WIPO under the title Internationalized DNS with Iterative Conversion.  As required this Patent application was first filed in the United State on 29 March 2001 and again with amendments on 22 May 2001.  As was mention this WIPO patent application was filed on November 29, 2001.  This patent application seeks out to provide a system, method and logic to manage data.  This data provides a DNS record that is a resource that can be looked up through a predetermined encoding such as example using Unicode (The meaning of a Unicode will be explained later).  It also acts as a converter to reach a certain key value.  The system can also act as a validator to verify that the converted key is valid and normal.


The Patent application begins with the introduction to the technology a detail description of how the process works which in its essence is the invention set forth in this patent application.  So what is the technology?  The basis of the invention is for electrical computers and digital processing systems to process data so one computer can understand another computer and in this case for example using the internet and typing in a URL address and each computer can read the URL address no matter what type of computer is used.


Since the use of this technology in this patent application is a technology that works over the Internet other individuals and organizations are actively working on the evolution of such technologies.  The Internet Society (ISOC) is the “parent” organizations of the Internet Engineering Task Force (IETF) charted to work on such evolving technologies.  The IETF is an international community of network designers, operators, vendors, and researchers who work with the evolution of the Internet architecture and ensures the smooth operation of the Internet.  It publishes documents specific to the technology of the Internet that is specific network protocols. 


Network protocols play a key role in this patent application and the IETF has been working on the same problem associated with what this patent application is trying to address.  A protocol in general is a procedure that helps regulate any data that is transmitted between computers.   The idea in an international community is to try and achieve a form of standardization so computers can talk to each other and recognize the data as it arrives. 


The challenge of standardization is implementation of domain names. We live in a world where there are many languages spoken and written in different formats.  The Internet today needs to work across boundaries and written in the native language of each country.  So far to date the URL’s have been written using Latin letters, but the content was easily managed in the native language. In countries where Latin letter are not native, the DNS or the domain name is created by converting using a limited group of the Latin characters and converting them to a symbolic name that can be recognized by another country.  The problem however, is in the translation.  There could be different translations that create different symbols and if you don’t remember these symbols you may not reach your destination.  People that are not familiar with Latin letters have difficulties using URL’s requiring Latin letters.


How are these URL created?  Typically contain a domain name and each domain name is associated with an IP address by looking up the DNS.  Computers can recognize these addresses using a database mapping system of the names and the machines where these names reside.  But the names reside in many locations and it is necessary to therefore have some sort of translator to make all of this work together.  So the combination of an IP address and the symbol that has been translated can work on all machines without having the machines need to determine where it is located and the actual or original name. How it is carried is by the use of Unicode for example.  A Unicode is an international character-encoding system that is designed to support the electronic interchange, processing, and display of written texts in many different languages. The Unicode is a worldwide character standard that includes letters, digits, diacritics, punctuation marks, and technical symbols for all the world's principal written languages, using a uniform encoding scheme. With Unicode the unique number provided for each character remains the same on any system that supports Unicode.


However, this has not solved the problems of the demand for having URL’s written in the original language.  There have been attempts to come up with a system that can help resolve our issue, however no such system to date has allowed a URL to be written in its original language such as Chinese, a language with significant number of character.  That is where this patent application comes in for the invention of being able to accomplish such a task.  There are other issues in regards to this patent application and that is the issue of the many servers that exist and the way these domain names reside and authenticate.  If an inquiry goes out to search for a domain name from one server but is unable to be authenticated it will search for another server that may know the answer.  This can continue for a long time and the result would end up in an error and of course dissatisfaction by a user.


The process just described is an encoding process.  The IP address is a code and when there is an inquiry it seeks a representation of the code that makes up the symbolic name it seeks out to find.  This may be in one or more languages and include a predetermined character that hopefully is a universal character. So what we are seeking is a system that can read the character encoding that may be associated with one or more languages, the inquiry to the name servers can recognize these characters and a verification/authentication that can convert the domain name expression so it is normalized when converted to the correct domain name expression.  This system must work when it can recognize a web server that is registered and authentic, where there is a database management system and a system that can implement the DNS protocol so it is well distributed in the “name space”  (the creation of the many domain names) residing in a named server for the purpose of mapping its location and then encoded with different character maps.


When dealing with an internationalized DNS it is important that it is mapped so it can be known that the initial characters that are not recognized do correspond to the DNS that is the legal domain name initially established. One solution can be a virtual internationalization of a domain name by using a forwarding agent this way the legal domain name can be tracked.  An IP address and the name of the server would be provided as part of this forwarding mechanism.  This then is the first step in the conversion process where data is not lost or queried continuously.  If you take it one step further and use the forwarding agent to be able to map it to a preferred location than when the system is seeking the correct server it is not querying continuously and it first authenticates using step one and then maps the location using step two.


This patent application then provides the technology to be able to provide a user to type in the URL in its native language. The patent application allows for data management to be implemented using a computerized system with a combination of software, firmware, hardware or a combination of these to allow users to type in a URL in their native language. The invention allows for management of the data, iteratively conversion of a specific encoding to a predetermined encoding through authentication and verification. 


A further detail of the actual patent application is not necessary for this paper, but it is important to note that the patent application process has been followed.  There are limitations to this patent application as will be described with the issues set forth by the IETF and the requirements from China.   

4.  IETF and China’s requirements


The IETF has played a role in the standardization of the Internet. As was mentioned earlier it is an organization of a group of individuals that contribute to the evolution of the Internet and it is the principal body engaged in the development of new Internet standard specifications. There is a specific process that is used by the Internet community for the standardization of protocols and procedures.  The stages in the standardization process are first defined.  This is conducted through the development of documents.  Then there is a process for moving a document through the various stages to finally create a standard.  A key area that is also addressed is the IPR in copyright and patent issues associated with the standards process. The intention of addressing IPR in the IETF is for the benefit of the Internet community and the public at large while of’ course respecting the legitimate rights of others.  The filing of this sample case study the patent application for the Internationalized Domain Name System (DNS) with Iterative Conversion is thus the concerns of the IETF.


Before we continue of the relevance to the IETF it is important to understand why the IETF addresses IPR in a bit more detail.  The IETF first of all encourages individuals or organization to bring forth the existence of any IPR that pertains to the formation of Internet standards. In general the IETF would prefer to work with technologies that have no known IPR claims or there is as an offer by the patentee of a free licensing to the IPR.  The IETF function is to evaluate alternative technologies. However, if the IETF decides to adopt a technology that is superior enough to the alternative, in this case to an IPR claim on a technology, they can with a commitment of fair and non-discriminatory terms or even with no licensing commitment to outweigh the potential cost of licensing to an IPR claim.  So for our particular example case study, the patent application for the DNS with Iterative Conversion, the IETF is strictly evaluating the technology of the presented patent.


Many participants in the IETF have been and continue to work on improving the reach of the Internet for instance by making it more accessible to users of different languages and scripts. Previous IETF standardization work in this area has lead to the ability to use e.g. Chinese in the body of email messages. The issue of supporting a richer set of characters in Domain Names was brought to the attention of the IETF in 1999, which lead to the creation of the Internationalized Domain Name (IDN) Working Group in 2000.


One must remember that part of the reason for the creation of IDN is to provide access to the functions of the DNS from languages and naming systems that cannot be accurately expressed in ASCII what is know as the traditional method for reading DNS.  The ASCII system which started in the mid-70’s was chosen because English can use ASCII, although it was not the only reason, but one of the reasons. The complexities occur when there are other scripts of various languages and character coding that is required. And if you use a system such as UNICODE, one is providing different ways to represent the same character and a matching issue arises. The IETF continues to put much effort in evaluating the issue of internationalization and determining if standards can be devised.  One of the bigger issues at hand for the IETF was to understand the complexities of the problem.


The IETF participants have a rich set of concerns and requirements around Internationalized Domain Names. One of the most important ones is to not disrupt the existing Domain Name System, since it serves as a backbone for all Internet communication. The need to register domain names as well as looking up domain names should satisfy the global needs, i.e. from the IETF's perspective it should be possible to support all languages and scripts. However, the IETF is an organization of Internet protocol experts and the expertise in language, script, and character set issues is fairly limited. This lead to the IETF adopting the use of Unicode for IDN since it is the only standard which includes a large set of languages and scripts.


However, there are some complications some of which are particularly pertinent to the Chinese users. The Domain Name System has been designed to be globally scalable by making it only perform exact matching lookups i.e. no ability to perform approximate matches or searching. For example, a user needs to know whether a domain name is spelled "" or "" as well as know whether a name is "" or "".


Today various search engines are used on the Internet to allow users to specify e.g. names of companies, products, and other topics and present a list of approximate matching URLs as a result. In essence the DNS is used to lookup up mnemonic names, which in most cases are different than the actual names of companies, products, or people to which the domain names refer.


Even so, many people expect to be able to use close approximations of the real world name as a domain name. For instance, "Joe's Garage" might expect to be able to register "" as a domain name. This expectation is likely to also exist when IDN allows a much richer set of characters in the DNS. However, with that richer set of characters it might become more apparent that there are multiple reasonable domain names, which users might type when they are looking for a particular real world name. Just like a user might expect that both "" and" refer to the same information, they might expect that "" and "cine'" [XXX should be an accent on the e] refer to the same information even though the letter E and E-with-accent are two different characters.


The last type of issue is particularly present in Chinese and discussed earlier in Section 2 the evolutionary history of the Chinese characters.  China is actively interested and participating in the IETF standardization process to gain DNS in simplified Chinese.  The Chinese script as was mentioned earlier has been reformed and simplified in the PRC over the last 50 years resulting in what is called "simplified Chinese” while Chinese in Taiwan, Hong Kong, etc. have largely stayed with the original form of the characters - known as "traditional Chinese". As a result of this there are two different forms of many Chinese names - one expressed using simplified characters and the other using traditional characters. In order to make the Internet easy to use for Chinese users it would be highly desirable to make the simplified and traditional forms of characters be treated, as the same in the lookup using one of them would match a domain name using the other form.


This as well as the example turns out to not be possible to solve in the DNS using Unicode.  This is due to two facts:


·        The Unicode standard has performed what is known as Chinese-Japanese Korean unification. All three of these languages share many Chinese characters and Unicode represents the same character using a single code independent of the language that is being used.

·        The fact that the DNS can only perform exact matching of code points and is not aware of the language that is being used.


This means that the traditional/simplified Chinese equivalence cannot be solved in the DNS without having a negative impact on Japanese and Korean users.


The IETF has explored addressing this more complex issue by creating a layer above the DNS, which could be aware of languages and other cultural contexts and provide approximate matching. To date the future of this effort is unclear. Therefore, the IETF is pressing ahead standardizing internationalizing domain names.  And if a solution is developed that layers on top of the DNS it can be used to solve more complex problems. 


The IETF chosen solution to IDN is not identical to the solution in the Patent application. However, there is a risk that there are claims in the Patent application, which an IETF compliant solution would infringe upon.  The impact of this is unknown because no patent has been granted yet and the claims often change in this process.

5.  China’s commitment associated with the Patent Application


The Patent Application is one solution towards the internationalization of domain names.  China now an active member nation as part of the accession into the WTO is seeking to become on equal footing and technology apt as other member nations.  China has been actively involved in the standardization community and actively participates in the IETF to implement a methodology for billions of Chinese to create domain names in other than Latin letters (i.e. in Simplified and Traditional Chinese characters).  The patent application is however, an invention by a U.S. entity and would allow if granted a new methodology for Chinese to use the Internet, let alone any other country using other than Latin letters.  A standardization process, created by a need from China and other countries is also at hand to create uniformity in Internet standards.  With China’s known history of piracy how will the new member nation ensure that piracy for efforts described in this case study will not be infringed.


As was mentioned in the introduction to this paper there is no simple answer to a difficult question, but there are commitments that have been made as part of the accession process that is important to mention in this section.  So what are these commitments?


China has committed to provide other than national Chinese individuals/organization to be treated equally as agreed by the conventions and international treaties establishing for IPR laws.  China will reciprocate activities of process and enforcement through the modification of the appropriate laws, regulation or any other relevant measures to make sure that foreign national entering China with a grated patent will enjoy equal benefits as a patent holder in their own countries (applicable to member nations who are party to the conventions).


As we mentioned in the Requirements and Convention Section III, China has revised it patent law in the year 2000.  These laws were in effect beginning July 2001.  These laws as was discussed provides a commitment to patent owner entering China that their patent will not be offered for sale without the patent owners consent.  The People’s court of China has been grated authority to take measures to order suspension on any infringement acts.  In addition, the agency responsible in administering the patent process SIPO has been given greater authority in ensuring that there is greater communication and coordination with other agencies within China that are involved in IPR law enforcement.  The government of China has also committed to ensure that inter-agency problems will be settled and resolved.


The government of China has also committed to strengthening its legislative structure to ensure that enforcement of IPR is actually followed through and does not fall through open and unwanted cracks in the system as it has in the past.  China has opened up its court system to ensure Patent right holder can bring a lawsuit in the peoples court.  China has created special courts in major cities (i.e. Beijing, Shanghai) available to patent right holder to be able to disputes any IPR infringement.  The court proceeding will follow legislative laws such as civil and criminal law.  Depending on the circumstances if a person(s) is found guilty they will be sentenced to imprisonment of up to seven years or can be subject to a fine or detention.


As was also mentioned in the introduction section, foreign legal entities had difficulties approaching the court systems in the Peoples Court to proceed because of phenomenal cost that come with the filling fees and damage requested were inadequate to pay for the actual damage.  China has committed that patent right owner to have a right to demand that the infringement is stopped and completely eliminated and all damages will be reimbursed to the patent right holder. This commitment is to be followed in accordance with the TRIPS agreement, which provides sufficient compensation for the injury due to the infringment on the patent right holder, by an infringer who knew that they committed the infringement act.


Other more sever action that China ensures to take incase of piracy infringement is to close down facilities that have committed such infringement acts. And begin the promotion of anti-piracy through publication, education and ensure that the legal entities assigned to this issue can follow through the enforcement action in accordance to the laws of China and the international conventions such as TRIPS.  And the most important commitment china has made is to ensure that the public is aware that even sanctions against administrative authorities will be used if infringement occurs in the issue of enforcement of IPR.



The subject of this paper was a discussion on Intellectual Property Rights (IPR) specific to Patents in the United States and its impact on the new member in the World Trade Organization China. We have introduced the Patent requirements and a brief history for the United States, the international conventions and patent protection, the People’s Republic of China commitments as a new state member in the World Trade Organization (WTO) the administrative process and the patent law.  A case study was brought forward to demonstrate the process and evaluate some of the implications and complexities in the process and how they interrelate in both countries.


There were three questions that this paper was set to answer and the questions were as follows:


1.      What are the United States/China requirements relative to Patents?


2.      How do conventions play a role in meeting these requirements? And


3.      When going abroad to China are the patents protected today since China’s commitments as part of the accession into the WTO?


Each of the above questions will be answered based on the information presented in this paper.


1.  What are the United States/China requirements relative to Patents?


We have learned that both nations have established laws that govern the issue of IPR specific to Patents.  The United States law is the law of the Constitution and is governed by the People of the United State of America. There are codes that define the United States Patent Law and they are Title 35 and Title 37. Title 35 describes the process to be adhered to by all parties involved that include the patent issuance office and their responsibility, the patent filer, down to the U.S. court entity involved in protection rights when legal action arises, and Title 37 is the actual code that defines the rules of practice in patent cases and a detail description relevant to the patent filing.  The U.S. Patent and Trademark Office is the federal agency that is in charge of administering U.S. patent laws and it is regulated under the U.S. code Title 35 & Title 37.


The Peoples Republic of China patent law has and continues to change due to a political force that evolved at the formation of the Chinese Communist party back in the early 1920’s.  China for many years has kept its borders closed to the open market and IPR piracy has been common practice in the region.  China did however, decide to change the environment in its country and open the door to a market based economy.  The means to do so was to once again become a member of General Agreement on Tariffs and Trade (GATT) as it was once in 1947, prior to the establishment of the communist government.  Following a fifteen years accession process China once again became a member of the World Trade Organization (WTO), the organization that was created following the Uruguay Round negotiations that led to the GATT 1994 agreement.  China had to meet the rules and obligations of the WTO’s market-economy principles, and its policies of pro-competition and non-discrimination.  This included as well the issue of IPR protection and the ongoing piracies of intellectual properties.


As we have seen that once China decided to enter the WTO it also had to make an effort to develop and implement IPR protection aimed at meeting an accepted world standard.  China had a Patent Law in place but is was not stringent and enforcement were limited as has been evident from the piracy issues that have been well know to occur on Chinese soil.  As part of the effort to change, China revised its Patent Law in 1992 and again in 2000.  Significant changes were adopted in the Patent Law of China most of which were now aligned with the international conventions such as the Paris conventions and the TRIPS agreement. Just like in the United States, China established a separate entity named the State Intellectual Property Office (SIPO).  This was a significant milestone in the reform effort to establish an entity that would bear the responsibility for processing claims and enforcement 


China is undergoing reform efforts as is evident through the change that have already taken place.  For a country as large as China not pointing to the land mass but the population reform, however, is slow.  If one evaluates the Patent Law of China it is still evident that changes have only now began and testing of the system is on its way.  As we reviewed the Patent Law it was evident that the wording matched the international legal conventions, however, where the difference resided when comparing to the legal documents written in the United States is the reporting structure of processes.  China is still a State run country and the State is the designated decision maker for all activities in the country.  As we have seen in the specific wording of the Patent Law, it is evident that the State (defined as the government entity leading the country) is a strong influential body that monitors the actions of patent assignment.  The courts systems in China are also being developed.  Reviewing the current Patent Law it is stated that there are limitations to the types of claims that can enter the courtroom.  At the present time enforcement of IPR is still under the responsibility of the State under the PRC; which is differently structured if compared to the United States.  In the United States you have the freedom to take any claims to a court system.  It is within the court system that the dispute is resolved. 


At this point only time will define how the changes are shaped and their occurrence.


2.  How do conventions play a role in meeting these requirements?


We have seen that there are several conventions and agreements that play a key role in influencing patent laws internationally and domestically.  Both the United States and today China are parties to these conventions.  That means that both and of’ course all other member nations are to abide by the set forth conventions and agreements.  Member nations must take these conventions and agreements one-step further and adopt them as part of their domestic law.   The United States has been a member nation since the establishment of the majority of the conventions and agreement.  All of these conventions and agreements have been incorporated into the laws of the United States.  China on the other had has only now become a member nation and during the accession process, it has been working on the reform process to meet the requirements as set forth by the conventions and agreements.  It is very important for China to align its reform process in accordance to the requirements in order to pursue the goal of open market economy.  The other issue of abiding by the rules of the conventions and agreements is that now enforcement of these rules can be disputed in an international forum.  Other member nations can be comforted by the fact that China is to some extend under the “glass eye” of the world (i.e. other member nations and as we discover today at 144 nations.)


Another area that was introduced in this paper is the sample case study, where a real world situation is exhibited.  The case study described a patent application that has been submitted to WIPO for Internationalized DNS with Iterative Conversion.  The details have already been described in section IV 3, but what is important to note from this example is that an individual can file a patent in the United States and then apply for an international patent with WIPO.  The issue at hand has been the requirements set out by China and the involvement of an organization the IETF with a mission to standardize IP protocols on the Internet.  China has a specific requirement just like any other country that wished to be able to type a domain name in its native language.


The patent application was submitted, if granted will this patent be protected from piracy in China today now that China is a member of the WTO and has committed to oblige by the conventions that set the rules of trade among member nations.  And, will the organizations, set to enforce patent rights, provide protection to the patent holder?  (See section 3 below)

3.  When going abroad to China are the patents protected today since China’s commitments as part of the accession into the WTO?


As was mentioned through out this paper this is a difficult question to answer at this time.  We have seen that great amount of effort has been made by China to bring about a change to an environment that has not implemented policies in the past to stop infringement of patent right owners. The laws in China have been changed and continue to change to ensure that they follow the conventions of international trade as part of the move towards an open economy.  The case study demonstrated that China is actively involved in helping shape standardization process that will be applicable in an international environment.  The commitments made as part of the accession process clearly define a comfort level that a system has been created that meets international conventions and that processes will be followed in accordance to these international conventions.


The next level of effort to test the system out is to continue to monitor China’s action as reform occurs.  Other research should be made to evaluate some of the cases that reach the People’s court system in China when infringements occur and compare some of the processes associated with Patent infringements and enforcement in China and the United States. 


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