What can we expect of China's patent law during the tenure of President Xi Jinping? This article proffers a partial answer to this broad question through the close reading of patent allegations against Chinese refurbishers and recyclers. Although the doctrinal issues presented are specific, these disputes occupy a policy space where competing goals of development tear a slit in the glossy exterior of the “Chinese Dream” meme that comes to represent Xi's administration, a slit through which we may gain some insight into the direction of IP development in China.
In the process of domesticating a legal regime originated from the West, the Chinese patent system may have lost in translation important limitations and exceptions that traditionally mitigated the tension between patent policy and sustainability. Chinese courts have imposed infringement liability against companies that make a living out of refurbishing patented products even though similar activities would not have been infringing in mature patent regimes elsewhere. It is all the more surprising because Chinese judges reached this alternate result even though Chinese patent law has codified the “doctrine of exhaustion” that appears to permit refurbishment on its face and are common among patent regimes. This article examines, as a case study, the Chinese jurisprudence of patent exhaustion as it is applied to the refurbishing industry and argues that, in some areas of the Chinese patent law, local legal actors now apply patent law in a way that is more pro-patentee than the patent regimes elsewhere in a way that conflicts with the goals of sustainable development.
To the author's knowledge, this paper provides the first and only English article examining Chinese exhaustion doctrine cases, with a conclusion that differs significantly from expectations following a reading of the patent statute and previous literature reports.
This article uses the following structure: Part I describes the potential conflicts between Chinese patentees and refurbishers in China at the legal intersection of emerging policies aimed at addressing environmental degradation and IP misappropriation. Part II details Chinese administrative and judicial enforcement cases against local refurbishers as a study of the patent issues that the refurbishing industry is likely to face. Specifically, it traces the rise of a pro-patentee exhaustion doctrine that equates refurbishment with the making of a new patentee product. Part III reflects on the broader implications for the development of China's patent system. The refurbishment cases show that Chinese judges are growing impatient with business that resemble freeriding copyists; that courts are developing into a stronger interpretive community in the patent area, and that the Chinese court system now emerges as a source of new patent jurisprudence.
Benjamin Piwei Liu, Remade in China: What Does Recycling Tell Us About the Chinese Patent System?, 82 UMKC L. Rev. 887 (2014)