63. The representative for the European Union said that his delegation acknowledged China's efforts and improvements in the protection of intellectual property rights such as Special Campaign on the Enforcement of IPRs or the removal of certain circulars on indigenous innovation. Since 2004, the European Union and China had established a solid cooperation on intellectual property issues through, in particular, an intellectual property dialogue and an intellectual property working group. IP was a topic that was always raised in the global economic dialogues or during the annual EU-China summits.
64. He said that the European Union's cooperation with China had addressed a wide range of IPR issues and progress had been noted in a number of those areas. In particular, China had made concrete efforts to improve IPR protection and enforcement. Despite these efforts, European businesses continued to face serious intellectual property problems in China. Further improvement was still needed, especially regarding the specificities of the digital world. The lack of effective protection and enforcement of IP in China continued to undermine the European Union's legitimate interests in areas such as high tech, quality and brand name products. IP rights violations remained a considerable problem for European businesses, with 85 per cent of all counterfeit goods seized at the European borders in 2010 coming from China, and seven in ten European businesses operating in China reporting that they had been victims of intellectual property violations.
65. He said that access to the Chinese enforcement system, in particular, remained complicated and costly for foreign companies, notably small and medium-sized industries. In addition, apart from the concerns mentioned by the United States, the legalisation and notarisation requirements for litigation, the high thresholds for criminal enforcement and the failure of sanctions to pose a deterrent remained areas of grave concern for his delegation.
66. With respect to the Trademark Law, he said that the current revision process should be used to make further improvements. The European Union was submitting comments on the latest Chinese draft law, which included comments on the relationship between trademarks and geographical indications, and remained concerned with the practice of bad faith registrations in China by Chinese owners of European trademarks.
67. Further improvements should also be brought to the Copyright Law during the announced revision process. The European Union continued to consider that the introduction of broadcasting and public performance rights for sound recording producers and performers in the Chinese Copyright Law was a necessary and welcome step.
68. He said that the Chinese patent system, covering invention patents, utility models and industrial designs, was growing fast and had reached the accumulated number of five million patent applications in March 2009, with domestic applications growing 20 per cent faster than foreign applications. But the merit of patent registration policy should not be measured only by the number of patents registered per inhabitant, but should rather focus on the quality of the rights granted. The European Union was working together with China in this area, putting together a task force on patent quality, and his delegation hoped to see benefits from this joint exercise soon.
69. His delegation was also concerned by non-voluntary technology transfers through excessive standardization requirements, the requirement to disclose trade or business secrets, or other similar policies. The so-called indigenous innovation issue had also been a major concern vis-à-vis China over the last years, but the European Union believed that a breakthrough had been reached in December 2010, when China had indicated that it would not discriminate between products manufactured in China by foreign invested enterprises and those manufactured by Chinese domestic enterprises. He said it would be important now to monitor the implementation of this commitment both at the national as well as at the provincial level, and that this issue would remain very much at the top of European bilateral and multilateral discussions with China. His delegation would continue to work together with China with the aim of putting in place an effective system of intellectual property protection and enforcement.