Study on the Countermeasures China enterprises deal with the America tariff law "section 337" (three)

 

 

(three) China enterprises to deal with the "337 terms" strategy

In general, the "section 337" has become a means of trade protection is currently the most powerful and deterrence. At this stage, can be said to China has become one of the global manufacturing center, marked "Chinese made" commodity a superb collection of beautiful things in America market, China enterprise threat to America competition increases, therefore, there is every reason to predict, more USA enterprises will use the "337 clause" as a more subtle means of non-tariff barriers against our competitors, China's enterprises involved in the "section 337" will be more and more, more and more frequently. "Shopping malls such as the battlefield," since "337 clause" has greatly affected the China interests of export enterprises, the primary task in front of the China export enterprises will be how to respond to the "section 337"?

1The establishment of early warning mechanism on "section 337"

The establishment of "early warning mechanism of Section 337" for China our export enterprises especially the export American enterprises is particularly important. First of all, Chinese enterprises should strengthen the theoretical research of "section 337", to strengthen the "337 investigation" understanding and the understanding, do "and combining prevention with elimination, prevention first"; secondly, should carry out product related patent search work in exports, determine whether may involve the product America patent or to method for manufacturing the products of American method patent. If there is suspicion of tort, can enter into a licensing agreement with the owner of the patent right, but also through non patent technology replacement to avoid infringement, or American importers, dealers and distributors to reach an agreement, the liability for tort to transfer risk; finally, should according to the characteristics of the enterprises, the industry make positive response, "337 investigation" strategy, combined with the power industry, to "save". In general, because of the characteristics of different industries is not the same, so we cannot one one list, the most critical is the early warning mechanism of the export enterprises shall formulate and improve response "section 337" according to their own circumstances.

2To actively respond to and not await one's doom

Actively respond to the first to strengthen the consciousness of intellectual property of their own, not only to improve the development, intellectual property management and protection system of the enterprise, also want to respect the intellectual property rights of others; not only to defend their intellectual property infringement, but also eliminate and prevent their products infringe the intellectual property of others, causing unnecessary litigation tired. The enterprise should not only be related to the application, in China domestic registered, but also in the national America registered, registration.

In addition, the enterprises of our country face the "337 investigation" should actively respond to, can not await one's doom, should take the initiative to protect their rights. The cost of responding to every piece of "337 investigation" case, although higher, but not just because of this and did not participate in the respondent, otherwise the product will be expelled from the USA market; on the contrary, if the enterprises to actively responding to, or compromise, or the patent right invalid each other, are likely to turn the crisis into an America, then win market. According to statistics[17]For enterprises to bring America, China "337 investigation", the settlement rate can reach 26.7%, withdrawing cases accounted for 16.7%, accounted for the successful case ratio as high as 43%, the proportion of losing case 13.3%. Therefore, from the previous case, by investigating the possibility of more successful, it is provided the basis for the enterprise to the bold "337 investigation".

3To American patent application is an important way to deal with "337 investigation"

All coping strategies is a matter of expediency, Chinese enterprises to long-term development, the key lies in must have their own core technology, the lack of core technology enterprises can only be others "processing factory", "generation of workers". Therefore, in the development of its own core technologies at the same time, must be the original to imitate the main development ideas to adjust for the independent innovation oriented concept, from a certain perspective is positive to the America patent. Can not say that every China export enterprises will encounter USA "337 investigation", to apply for a patent in the United States mostly but in American suffered "337 investigation" China enterprises without. If there is Chinese enterprise was "337 investigation" in the United States, Chinese government almost unable to help, because American is based on its domestic law, which is different from the trade disputes can be resolved through bilateral negotiations. Therefore, enterprises must pay attention Chinese their own intellectual property rights. The only way is to China enterprises actively to USA patent.

By the end of 2006[18], the State Intellectual Property Office received cumulative domestic invention patent applications in 1089515 , accounting for three of total patent applications 32.7%. The domestic invention patent 565147, accounting for 51.5% of the application for a patent for invention, the foreign 524368 , accounting for 48.5%; the invention patent 823781, accounting for 75.6% of 265734 , non service invention patents, accounting for 24.4%. However, from our country in foreign patents for inventions, in 2001 only 74, our country in foreign countries especially the lack of invention patent in USA, is our country suffered "one of the important reasons for the 337 investigation".

To American patent application, many, especially in the prevention of the violation of the "337 investigation" role more obvious. The most important thing is to strike first to gain the initiative, ahead of competitors registration, can prevent competitors in the sense that the threat to seek "337 clause" to stop Chinese products into the market America.

4Copy the South Korea deal with "337 investigation" experience

As early as in twentieth Century eighty years, Japan, South Korea enterprises was also key American "337 investigation", such as TDK, SONY, Toshiba, Hitachi Multi-National Corporation, was often "337 investigation" of the object, they also experienced from the initial amount of "absent litigation", in order not to after the thorough give up America market and frequently faced, then later actively began in the area of the patent application to prevent or avoid the "337 investigation", nip in the bud. So far, it is the Japanese began to counterattack against counterfeit products, large-scale American enterprises! More make me on the spot is, now in the USA situation became Japan enterprises occupy the offensive, and USA enterprises are relegated to defensive. At present, the patent application in most of large enterprises, Japanese and Korean enterprises has been ranked second and third.[19]

It Chinese situation, is still in the China enterprise from "not to participate in the litigation" to "middle stage actively respond", can say China mainland enterprises in American intellectual property deployment efforts is far behind Japan, South Korea and other developed countries and China's Taiwan region. If the effective learning of Japan and South Korea should "337 investigation" experience, actively apply for patent to the United States, then use the "section 337" reach out to other countries occupy the market competitors, American purpose.

5The rational use of the rules, to exclude the jurisdiction of the arbitration clause of ITC

Using the rule of reasonable and effective, an important means of arbitration agreement is dealing with "337 investigation". As a precaution, China export enterprises in the intellectual property license agreement or export agreement prescribed in the arbitration clause, will determine the possible future disputes by arbitration, if the other party is China human agreement, the respondent enterprises on the basis of "1994 Uruguay round agreement law" to the arbitration clause rule governed ITC on the case[20]To avoid being "337 investigation". Compared with the "legal procedure of Section 337", in the arbitration process in both basic in equal status, is more likely to obtain a fair verdict.

Of course, the jurisdiction of the arbitration agreement to exclude ITC has the certain difficulty, which often were also less likely to. For example USA importers signed a sale and purchase agreement with China exporters, importers and found the imported goods are suspected of infringement, if the two sides signed an agreement containing an arbitration clause, behoove to exclude the jurisdiction of ITC. However, American enterprises especially the complainant is often not the sale of goods contract party, the majority of the third party, then the clause does not come into effect, therefore, important to understanding the arbitration clause shall be reasonable and effective, can not blindly rely on the existence of an arbitration clause.

6Strengthen China lawyers and lawyers America cooperation

The majority of the "337 investigation" cases are concentrated in the infringement of intellectual property rights, and thus often relates to the business secret. However, "337 investigation" evidence reveals the procedure and require the parties to provide all the cases and related materials, which may include the enterprise's financial statements and the production process, so the parties will disclosure of trade secrets in a large number of "337 investigation". Obviously, if there is no corresponding commercial secret protection measures, no business is willing to disclose such information. Therefore, the ITC administrative law judges are often in the "337 investigation" began, will announce the "commercial secret protection orders", both sides lawyer, expert witnesses and translation are strict protection of commercial secrets. The lawyers are often asked to sign a written agreement, to ensure compliance with the commercial secret protection order, and in violation of the law of business secret protection order may have been his law license and other measures[21]. However, due to Chinese lawyer China citizenship and mostly abode in China facts, ITC generally does not allow commercial secrets to China lawyer contact "337 investigation", and will Chinese lawyer out of the can sign the document, the list of business secret protection order constraints beyond.

Therefore, in the "337 investigation", China lawyers are often difficult to contact the case in real programs, plus the language communication, legal differences and other aspects of the disorder, China solicitors and foreign lawyers very difficult to fit in the "337 investigation" process. It is gratifying to note that: in July 7, 2006, has USA lawyer license in Beijing Gaopeng Tianda lawyer Jean snow received administrative judges into biochemical "337 investigation" in the case of large[22]In rejecting the complainant to exclude files within the range of motion of the decision signed. The ITC for the first time in the history of foreign lawyer contact the other party business secret decision, confirmed the America lawyer license of foreign lawyer can understand all the business secret cases involved in the "337 investigation", including the commercial secrets of the other party. The foreseeable future, Chinese lawyers also have American lawyer license can be quoted in the "337 investigation". So far, Chinese solicitors and foreign lawyers working in a certain level has also been strengthened.

7Chinese "337 clause" should be made as soon as possible

It is foreseeable, along with the rise of Chinese exports to improve the technological content and Chinese manufacturing technology level, believe in a certain period of time, Chinese export American products encounter "section 337" investigation will be more and more.

Therefore, the Chinese government may be timely to consider "the legitimacy of Section 337" resort to WTO dispute settlement mechanism, would "negotiate unreasonable clause 337" and America government, resolute struggle with America trade protectionism as. Although American tariff law "337 clause" and the relevant provisions of WTO have a contradiction, but in the present stage, still can not stop the America implementation "337 investigation". To make America modify its "337 clause", must make great efforts by international organizations, at the same time, the time spent too long.[23]Since the "337 clause" as an effective tool USA prevent foreign products to enter the market, is our government cannot create China version of the "337 investigation" system? Is theoretically feasible, our country can use WTO relevant legal retaliation and cross retaliation rules[24]For the dispute settlement mechanism, the authorization of retaliation, in simple terms, namely to the person Tao body, makes the national "337 investigation" system is suppressed even is an important prevention measures USA "337 investigation" frequently get, can control the United States filed "337 incidence of China investigation" from a certain level of enterprise.

In fact, China's April 6, 2004 revised "the people's Republic of China Foreign Trade Law" increase "and the protection of foreign trade related intellectual property system" chapter, and provides a legal basis for the establishment of China version of the "337 investigation" system. The act of twenty-ninth stipulates: "the state in accordance with law, administrative regulations on intellectual property rights, the protection of intellectual property rights related to foreign trade. The imported goods infringe intellectual property rights, and endangers the foreign trade order, the authority responsible for foreign trade under the State Council may adopt the import of the relevant goods prohibited the infringer production, sales in a certain period of time and other measures." Although, the law only stipulates the principle, not given in the specific operation clearly, but also to some extent on foreign importers import products of our intellectual property infringement possibility, organize the relevant departments to strengthen investigation and study, the judicial interpretation, legislation and early development of this clause, and in actual operation to USA enterprises to "color", will help alleviate the passive situation Chinese enterprises were "337 investigation" led by the nose of the.

In addition to the above listed the coping strategies, strengthen information communication and coordination, the government play organization coordinated ability, corporate culture industry association to deal with "337 investigation" and various talents are to achieve a certain effect. For example: in 2003, encounter "in battery enterprises Chinese mainland 337 investigation", Chinese battery industry association is combined with all the industries and enterprises to actively responding to, and ultimately won[25]. Since the "337 investigation" punishment measures will make the whole industry long-term can not enter the America market, but also involves the company, contractor and related downstream products; in addition, generally involves "section 337" prosecution is a large amount of money, responding to the required fees over one hundred million dollars, no individual enterprise can face and to cope with, at present domestic has the single enterprise spending "hitchhike" domestic industry as a whole benefits phenomenon. Therefore, to deal with "337 investigation" requires a large number of enterprises to form a community of interests to come together, sharing the risk and cost, sharing of benefits, and the coordination of work, organizations cannot do without work and guide the industry association. Therefore, the industry association shall deal with "337 investigation" as one of the important tasks of their own, the active use of its advantages, play the ability of organization and coordination with the industry to jointly cope with.

Conclusion

In today's world, the competition of intellectual property rights has become the focus of international competition, the standard measure of national intellectual property rights has become the de facto and comprehensive national strength, science and technology competition, economic and trade directly linked, become an important means of Multi-National Corporation to occupy the market. While the "section 337" much attention is the world's competitive results, in fact it has become a legal mechanism America in circulation strength protection of intellectual property rights, the objective of imported products constitute a barrier to trade. Although the "337 clause" does not require the actual damage as the premise, but the investigation characteristics, high cost, short time to remedy harsh, make it become a kind of competitive exclusion of business strategy.

In Chinese, those who have suffered the pain of "section 337" enterprises, should learn the lessons, positive countermeasures of "section 337", to prevent further losses. For those to USA high-tech products export enterprises, if the infringement of intellectual property America danger, should be more careful analysis of Countermeasures of "section 337", in the absence of respondent to start the "337 investigation", formulated the "337 terms" early warning mechanism, in-depth study and analysis of export product patent status, in order to eliminate "article 337" effect on the occupation of America market, "save" is better than "battlefield knife" much better. Even if the respondent to start the "337 investigation" of the enterprise, also should stand in the long-term perspective, actively responding and not "away", "ignore", in the end is still my hurt. Therefore, the correct analysis and study the "337 clause" effect on the Chinese enterprise and strategy, have a certain role in the development of China enterprises into market and USA.

 

 

 

 

 

 

 

 

 

 

Reference

 

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