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The Software Patent Issues in China

This paper presents issues regarding software patents in China. A key origin of software entertainment copyright concerns in China is that there exists a vast disparity amid the residents’ demand for entertainment and controlled legal supply. Therefore, the black market has surfaced to meet this want that would, alternatively, be unoccupied. Besides, software piracy is a vast trade with lots of cash at stake. Trading pirated products at enormous volumes is extremely lucrative. Bearing in mind that the rates of employment in China are high, piracy generates numerous jobs, which the regime may be hesitant to intimidate with meticulous anti-piracy actions. Hence, there is a strong need for software patent protection. Software patents serve a vital function in promoting innovation, particularly by small corporations. This paper first gives a background of the main patent issues facing China before explaining the scope of software patent protection in China as well as the effects of software piracy, which is the largest problem facing most computer companies in China. The paper also gives some recommendations and ends with a conclusion that summarizes the key points discussed.

Background

Information technology is a chief force in the development and globalization of the globe economy. The entire global package software market is projected to be over $135 billion (Gopal and Gabriel 18). Piracy leads to vast global losses. The global incomes from business-based PC appliances were over $17.2 billion, as quoted by the Software Publishers Association (Alexandroff and Sylvia 37). In China, the rate of piracy was positioned among the premier, with 96 percent. Software covers the unique traits of digital products, since it is costly to create the first copy and cheap to replicate and deal out for following copies. These traits are analogous to a communal good, since distributing it does not decrease the consumption utility of the creation.

Software Patent Protection in China

The IPR structure of China is influenced by the EPC and the German Patent Law, because the German Patent and Trademark agency backed China in setting up its patent structure. Since China lacks case law, the patent law forms the basis for assessment at the State Intellectual Property Office. In reference to Article 25(2) of patent law in China, policies and techniques for mental actions are not patentable the thematic issue (Hutter 4). The second rule of the execution states that an invention, for reasons of the Patent Law, implies any novel technological solution regarding a creation, a procedure or an enhancement thereto. Rule 2 and Article 25 make up the lawful foundation for determining if computer software-executed creations are capable of being patented in China (Hutter 6).

By the time, the application of patent commenced in China, during 1980s, computer software had been a vital constituent of technological progress. Hence, the earliest edition of the Examination Guidelines, developed in 1993, did not rule out computer software-implemented creations from patent fortification (McGee 37). In reference to the 1993 guidelines, it is provided that the subject matter of a creation can present a technical resolution and generate a technical outcome, the creation is supposed to be patentable. Certainly, so as to be patentable, the computer software implemented should also meet other necessities, for instance, originality and creativity standards. This norm is still applicable today and is similar to the condition in Europe.

In China, there is a lack of a description of what makes up a “technical solution” or a “technical effect” (Hutter 8). Therefore, although there have been no considerable modifications to the technical necessity for computer software, in diverse versions of the Examination Guidelines, the technical condition norm has been reluctant, and assessors have some flexibility in compliance. Nevertheless, creations relating to pure business techniques are currently deemed unpatentable, since they do not represent a technical resolution and a technical outcome. Here, a pure business technique implies that all aspects, which are different from the earlier art, lack technicality.

While computer-software implemented creations are patentable with no necessity for an enhancement as to hardware, computer software, by itself, is deemed to comprise regulations and techniques of mental actions, hence cannot be fortified. Besides, any creation of a computer program, for instance, storage means distinguished by a recorded program on the medium, cannot be under patent (Hutter 7). In China, therefore, computer-implemented creations can be fortified just in the appearance of a claim to a technique executed by a system or an appliance operating in the software.

In China, acquiring a method claim is straightforward. Nevertheless, there is a substantial debate regarding claims on devices (Clark 156). A definition of the procedures in a flowchart is typically employed in order to exemplify the purpose of the software, or computer-implemented creations. While the software is employed in firmware, in nearly all patent appliances, the firmware block illustration of the electric circuit is never portrayed. Similarly, the device claim is described by the well-designed elements of the flowchart. Before 2006, such device claims were discarded for not having support in the account, since no block illustration of hardware equivalent to the functional elements in the device claim existed.

The Examination Guidelines of 2006 stipulate that device claims are acceptable (Marcus 4). Nevertheless, each constituent of the device claim should match to every step in the flowchart or the technique claim mirroring the representation. Every element in the device claim is deemed as the functional component for conducting both steps of the method and flowchart. The 2006 Examination Guidelines express that, “the device claim defined by such functional modules should be interpreted as realizing the technical solution mainly by the computer software recited in the specification, rather than hardware device realized mainly by hardware” (Hutter 4). This stipulation leaves an extremely vital question unanswered; is such a device claim able to cover a device with firmware containing the entire functional elements of the claim? This query cannot be answered with conviction pending the occurrence of such a situation, since it has not received any attention from the State Intellectual Property Office.

Effects of Soft ware Piracy

Costs to Individual Companies

Companies globally lose many dollars each year to soft ware piracy. These industries also suffer many ways. First, companies that tend to compete with counterfeiters experience a loss in sales. In fact, pirated products fill the markets, making barriers of entry for manufacturers of the authentic goods.

Besides, customers who are misled into trusting that they acquired authentic items, when the goods were pirated, blame the producer of the authentic invention when it stops working, forming a loss of goodwill. Also, low-priced copies that are acquired in true faith symbolize a grave threat to the corporation that wants its brands linked with uniqueness and value.

Thirdly, alongside losses of goodwill and tax, one must not overlook the costs involved in implementing and protecting the patent rights. The true owner becomes occupied in expensive lawsuits and investigations when fighting pirates and may too have to expend further sums on invention fortification.

Costs to Countries where Software Piracy Occurs

These nations experience both physical and elusive losses. First, alien manufacturers of reputable goods become unwilling to create their products in nations where piracy is widespread, since they cannot depend on the execution of their patent rights (Gopal and Gabriel 59). Therefore, such states’ global economy is usually affected, since they lose on foreign direct investment. Second, if several goods from such nations, including those that are authentic, acquire a reputation of having low quality, this will lead to loss in exports, which entails both loss of foreign trade and jobs. One might argue piracy generates jobs, however, these jobs are badly paid, entail poor, working environments and occasionally, make use of child labor. Third, the pervasiveness of software piracy in a market depresses innovation in that nation, as it deters honest creators from investing funds in new goods and market expansion (Pecht 152). An additional direct loss for the regimes of nations that become refuges for pirates, are loss of taxes, because the pirated goods are usually sold through secret channels. Hence they are not apt to be taxed.

Recommendations

The government, parents, and schools should train people that it is morally wrong to do business with pirated products. There requires a height of deterrent measures that consist of states’ negotiations, educational crusades and legal actions linked to mounting domestic copyright rules and attempting to implement these laws. The initial step to improve the public’s consciousness on computer software patent rights should be to teach computer science (CS) learners, who eventually will develop into software consumers, developers and other computer specialists.

The motivation for governments to impose and execute copyright laws is linked to the volume of the home software production. In the instance of PRC, it is minute, although mounting swiftly. China has lately begun invasions against CD industries that create bootlegged duplicates of software and seized the press CDs. The doubt, nevertheless, is that such presses are returned, into service in public-owned industries, to create CDs having pirated software. In any case, the government is supposed to take measures now, since China is a swiftly rising market in towering technology, and as technology grows in the country, need to use software will augment. In the United States, stern searches on visitors from Asia, who might contain pirated commodities have been lately imposed. China should also follow analogous suit in attempts to dispirit purchasing illegitimate software.

Preventive measures also require to be assumed. This comprises hardware and software schemes to stop the actual dealing with the software. Firms such as Microsoft have already applied, in their software, an input that must be conveyed to their database prior to the activation of the software. A different resolution that has been attempted with DVDs is making hardware and coding material work with precise areas. Nevertheless, this falls short when nations such as China produce hardware that is an area free.

Local price modifications can be a way to aid support purchasing lawful copies of the software. This can be achieved by ensuring that the price of the creation matches the incomes of the consumers. Nations across the globe would then be enthusiastic members in the implementation of intellectual property rights. The moment the lawful price of the software is in the affordability array of its society, the states’ motivation for enforcement and ratification of the patent rights augment significantly. The governments would be eager to safeguard the intellectual property rights, so as to speed up the expansion of the home software industry, and the tax revenues from lawful software dealers. This would assist to make persons around the globe develop the tendency of purchasing lawful software as it turns out to be reasonably priced, and the atmosphere of valuing patent rights gains a grip.

In conclusion, China lacks case law, the Patent Law and its Implementing Regulations and the Examination Guidelines form the basis for assessment at the State Intellectual Property Office. While computer-software implemented creations are patentable with no necessity for an enhancement as to hardware, computer software, by itself, is deemed to comprise regulations and techniques of mental actions, hence cannot be fortified. Besides, any creation of a computer program, for instance, storage means distinguished by a recorded program on the medium, cannot be under patent. In China, therefore, computer-implemented creations can be fortified just in the appearance of a claim to a technique executed by a system or an appliance operating in the software. In China, acquiring a method claim is straightforward. Nevertheless, there is substantial debate regarding claims on devices. A definition of the procedures in a flowchart is typically employed in order to exemplify the purpose of the software, or computer-implemented creations. While the software is employed in firmware, in nearly all patent appliances, the firmware block illustration of the electric circuit is never portrayed. Similarly, the device claim is described by the well-designed elements of the flowchart. The Examination Guidelines of 2006 stipulate that device claims are acceptable. Nevertheless, each constituent of the device claim should match to every step in the flowchart or the technique claim mirroring the representation. Every element in the device claim is deemed as the functional component for conducting both steps of the method and flowchart.

Companies globally lose many dollars each year to soft ware piracy. These industries also suffer many ways. First, companies that tend to compete with counterfeiters experience a loss in sales. In fact, pirated products fill the markets, making barriers of entry for manufacturers of the authentic goods. Besides, customers who are misled into trusting that they acquired authentic items, when the goods were pirated, blame the producer of the authentic invention when it stops working, forming a loss of goodwill. Also, low-priced copies that are acquired in true faith symbolize a grave threat to the corporation that wants its brands linked with uniqueness and value. Nations where software piracy occurs experience both physical and elusive losses. Alien manufacturers of reputable goods become unwilling to create their products in nations where piracy is widespread, since they cannot depend on the execution of their patent rights. Therefore, such states’ global economy is usually affected, since they lose on foreign direct investment.

The government, parents, and schools should train people that it is morally wrong to do business with pirated products. There requires a height of deterrent measures that consist of states’ negotiations, educational crusades and legal actions linked to mounting domestic copyright rules and attempting to implement these laws. The motivation for governments to impose and execute copyright laws is linked to the volume of the home software production. In the instance of PRC, it is minute, although mounting swiftly. Preventive measures also require to be assumed. Local price modifications can be a way to aid support purchasing lawful copies of the software.

Hence, although software patent is an area of concern in China, the regime contains laws in opposition to it. The problem is that these laws are never imposed sternly, as it happens in other countries. Several people argue that decreased levels of individual income validate software piracy. However, this is false because if persons and institutions can find the money to purchase computer hardware, there is should be no reason for bootlegging software. Every government, together with software companies, is required to take measures distinctively, as a mutual effort to stop patent contravention. At present, Chinese companies with intellectual property concerns are experiencing losses. Such domestic concerns are uniting, with global pressures, to promote respect for patents in the nation, and a large demand from corporations for fortification of their rights via the lawful scheme. Hence, although the corporations feel the twinge at the moment, Chinese IP bootleggers will soon be experiencing legal confrontations in the near prospect. Considering the implementation of new patent laws, quick patent litigation, raise in patent claims, global support and edification of ethical issues associated to IPR, China is on the right path to resolving its software patent concerns.

Works Cited

Alexandroff, Alan and Sylvia Ostry. China and the Long March to Global Trade: The Accession of China to the World Trade Organization. London New York: Routledge, 2003.

Clark, Andrew. Enforcement of Intellectual Property Rights. London: University of Warwick, 2008

Gopal, Lawrence and Gabriel Sanders. Global Software Piracy: You Can’t Get Blood Out of Turnip. London: Sage, 2009

Hutter, Hans. The Hows and Whys of Software Patent Protection. Web. 2011

Marcus, Andrew. “Fast Forward: User-interface Design and China: A Great Leap Forward.” Interactions 10.2(2006):1-5

McGee, Robert. Commentaries on Law & Public Policy. South Orange, NJ: Dumont Institute for Public Policy Research, 2004.

Pecht, Michael. China’s Electronics Industry the Definitive Guide for Companies and Policy Makers with Interests in China. Norwich, NY: William Andrew Pub, 2007.

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