On April 30, 2021, the Office of the United States Trade Representative (USTR) released its annual Special 301 Report on the adequacy and effectiveness of U.S. trading partners’ protection and enforcement of intellectual property rights.  The USTR maintained China on the priority watch list of countries, along with eight other countries, which “indicates that particular problems exist in that country with respect to intellectual property protection, enforcement, or market access for U.S. persons relying on intellectual property. ” In general, the USTR lauded the legislative and judicial reforms China has made but stated “it remains to be seen whether these measures sufficiently address existing challenges to right holders.”

The USTR stated in an accompanying press release, “in 2020, China published several draft IP-related legal and regulatory measures and finalized over a dozen measures.  Notably, China amended the Patent Law, Copyright Law, and Criminal Law in the past year.  However, these steps toward reform require effective implementation and fall short of the full range of fundamental changes needed to improve the IP landscape in China.”

In addition, in the report itself, the USTR stated

“China needs to deepen reforms strengthening intellectual property (IP) protection and enforcement, fully implement recent revisions to its IP measures, refrain from requiring or pressuring technology transfer to Chinese companies, open China’s market to foreign investment, and allow the market a decisive role in allocating resources. For U.S. persons who rely on IP protection in what is already a very difficult business environment, severe challenges persist because of excessive regulatory requirements and informal pressure and coercion to transfer technology to Chinese companies, continued gaps in the scope of IP protection, incomplete legal reforms, weak enforcement channels, and lack of administrative and judicial transparency and independence.”

Other issues raised by the USTR include “longstanding problems such as bad faith trademarks and counterfeiting persist, and worrying developments such as broad anti-suit injunctions issued by Chinese courts have emerged. “

The full report is available here: 2021 Special 301 Report.