SHANGHAI UNIVERSITIES NURTURE NEXT GENERATION OF IPR

UNCLAS SECTION 01 OF 05 SHANGHAI 000054

SENSITIVE
SIPDIS

USTR FOR CHINA OFFICE - AWINTER, TWINELAND, DKATZ; IPR OFFICE -
RBAE; AND OCG - TPOSNER
DOC FOR NATIONAL COORDINATOR FOR IPR ENFORCEMENT - WPAUGH
DOC FOR ITA/MAC: SZYMANSKI
LOC/ COPYRIGHT OFFICE - STEPP
USPTO FOR INT'L AFFAIRS - BOLAND, WU
DOJ FOR CCIPS - TNEWBY
FBI FOR LBRYANT
DHS/ICE FOR IPR CENTER - DFAULCONER
DHS/CBP FOR IPR RIGHTS BRANCH - GMCCRAY
TREASURY FOR OASIA
NSC FOR JIM LOI

E.O. 12958: N/A
TAGS: KIPR ETRD EINV EFIN SCUL TBIO CH
SUBJECT: SHANGHAI UNIVERSITIES NURTURE NEXT GENERATION OF IPR
LEADERS

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(U) This cable is sensitive but unclassified and for official
use only. Not for distribution outside of USG channels or via
the internet.


1. (SBU) Summary. A key element of the Shanghai Municipal
Government's efforts to be a leader in intellectual property
rights (IPR) protection has been the establishment and support
of IPR colleges and research centers at several major
universities throughout the city. Although these schools train
an impressive number of students, the programs and quality of
education have a wide degree of variation. During a series of
meetings in recent months, leaders from several of the schools
discussed their schools' curricula and initiatives, students'
changing perception of IP issues, the National IP Strategy, and
judicial IP protection. Regarding the National IP Strategy
(released in June 2008) and the subsequently released Shanghai
IP implementation strategy, the academics said they were too
general and would likely not have a measurable effect on
industry. Academics, recognizing that judicial IP protection
varied greatly throughout China, rated Shanghai and Beijing
courts as by far the best based on a number of criteria.
Despite the IP academic community's welcoming of further
cooperation with the Consulate, the Shanghai Foreign Affairs
Office (FAO) continues to stymie formal cooperation on IP issues
with the schools. End Summary.

Background on Shanghai IP Academic Community
--------------


2. (U) Shanghai is home to three IPR colleges, which focus
primarily on teaching and six IPR centers (based at local
universities),which focus primarily on research. The Shanghai
Intellectual Property Administration supported the establishment
of the IPR colleges and centers, and it continues to play a
leading role in determining curricula and research topics. The
earliest IPR college was established at Shanghai University in
1994, and it continues to be one of the most active IPR learning
centers. Both Tongji University and East China University of
Politics and Law followed suit with the establishment of IPR
colleges in 2004, each with their own areas of specialization
and varying degrees of success. The six IPR research centers
are at Fudan University (founded in 1994); East China University
of Science and Technology (2004); East China University of
Politics and Law (2003); Shanghai Jiaotong University (2004);
Shanghai Chinese Tradition Medicine University (2003),and
Shanghai University of Politics and Law (2004).

Shanghai University - First IP Program in the City
-------------- --------------


3. (U) The Shanghai University IPR Institute was established in
1994 and was the first IPR college in the city. Affiliated with
Shanghai University's law school, it has a larger staff (10
professors) and number of students than any other IP college in
Shanghai. According to the IP College Director Tao Xinliang,
there are around 30 graduate students and 3 PhD candidates who
major in IPR every year. The college only offers graduate IPR
programs, but there are also about 200 undergraduate law
students every year who choose an IPR focus. In addition, the
school offers part-time and graduate-level classes on
intellectual property management, as well as elective courses on
intellectual property open to students from all majors. Tao
emphasized that all the classes are taught with "IP management"
in mind. He added the number of applicants for the IPR College
is growing every year because of the increasing importance of IP
in the development of the economy and the increasing demand for
IP experts. Graduates from the IPR Institute are employed
across the spectrum of IPR-related professions, including
courts, government agencies, and law firms. An increasing
number of students are choosing to enter the corporate world as
IP counsels.


4. (U) The main research areas in the college are IP law and
policy at both the national and municipal level. Graduate

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students also research topics related to corporate IP management
and the protection of intellectual property in international
trade. In addition, the college was involved in the revision of
the Patent Law and the Implementing Regulation of the Patent
Law.


5. (U) According to Tao, one feature that sets the school apart
is its established link with a U.S. university. In November
2005, Shanghai University signed an agreement to establish a
joint program with the American International Education
Foundation (AIEF),a nonpartisan, nonprofit organization
dedicated to promoting U.S. education internationally, and the
Illinois Institute of Technology (IIT). Through this program,
Shanghai University students have the option of pursuing an MBA,
MPA or LLM degree at IIT, all with an IPR concentration.

Tongji University and its German Connection
--------------


6. (U) In a separate meeting, Tongji University Intellectual
Property Institute Director Shan Xiaoguang described how the
institute was established in 2003 and is closely linked with
Germany's Max Planck Institute (MPI) for Intellectual Property
Competition and Tax Law. The Institute is heavily oriented
towards Europe, and many of its professors hold degrees from
German and British universities. Shan himself graduated from
MPI and speaks fluent German. Tongji University has
traditionally had close and longstanding ties with Germany and
was first founded by a German doctor as the "Tongji German
Medical School". The Intellectual Property Institute developed
quickly from its initial three full-time professors to its now
eight full-time professors, and it is likely to increase to
fifteen in the near future. The school also boasts a number of
regular high-level guest lecturers, including Tian Lipu, general
director of State Intellectual Property Office, and Chen
Zhixing, Director of the Shanghai IP Bureau. IPI hosted its
first IP forum in 2004, focusing on research in technology
transfer, patent law, software protection, trade secrets, and
European intellectual property law. It also offers consulting
services to the Shanghai government and private industry.


7. (U) On the education front, IPI, in conjunction with the
School of Economics and Management, offers a doctorate in
management science and engineering with a specialization in
intellectual property and knowledge management. Shan reported
that the IP major is quite popular among students. There were
about 40 doctoral level applicants for the IP management major
every year - only four are accepted. Many applicants have a
background in chemical and mechanical engineering, as well as
natural sciences. IPI also works with the School of Liberal
Arts and Law to offer a master's degree in law with a
specialization in intellectual property. Undergraduates
majoring in science and engineering at Tongji University can
also enroll at IPI and gain a dual major in IP. IPI enrolls
about 15 graduate students and PhD candidates every year. The
students find jobs in academia, law firms, government agencies
and private firms after graduating.


8. (U) According to Shan, Tongji works actively to promote IP
awareness on campus and throughout Shanghai. The school often
holds seminars, meetings and other publicity activities. It
even conducts outreach and capacity building with variety of
local government agencies. Another main area of focus is to
provide information and consultation on legislation to the
central and local governments. It also analyzes international
IP protection trends and provides consultation for international
companies on IP strategies. IPI gets support from the Shanghai
Intellectual Property Administration (SIPA) and the State
Intellectual Property Office (SIPO) via research project
funding. The school is also involved in researching national
patent law revisions. Shan welcomed the opportunity to further
cooperate with the US Consulate, particularly noting the need
for funding of projects and additional educational material.


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East China University IP School - Struggling Newcomer
-------------- --------------


9. (U) East China University of Politics and Law's (ECUPL) IP
School and Research Center opened its doors in 2003 and became
the first to enroll undergraduates in its IP program. Gao
Fuping, the IP school dean, credits its founding to the Central
Government's rush to meet some of China's many post-WTO
accession challenges. The center enrolled 52 students during
its first year and has enrolled about 100 students a year since
then. There are 11 professors and 3 working groups in the IP
College. Its unique bachelor's degree program combines courses
in management, natural science and IP law. ECUPL's IP School
has an ongoing partnership with Johnson & Johnson, which funds
research, publishing and scholarships. Rather than championing
their model to other universities, however, ECUPL's IP School
dean candidly explained that his program was not very successful
because students are spread too thin. He feels that IP programs
work better at the master's level.


10. (U) According to Gao, ECUPL's IP School is currently the
only IP college in Shanghai that has three levels of IP majors:
bachelor's, master's and doctorate. The majors in other IP
schools are "IP law" or "IP management," which have a very
different curriculum from the IP major of ECUPL. There are
about 100 students every year who choose IPR as a major. IPR is
also a basic course for all law students. Gao also noted that
ECUPL's IP School and Research Center lacks funding from the
Shanghai IP Bureau and, as a result, lacks some basic faculty,
such as a full-time patent law professor with a natural sciences
background. The school has nonetheless demonstrated strengths
in e-commerce law, IP protection on the internet, and trademark
protection. The school also emphasized IP research and holds
several IP-related seminars every year. The focus of current
research includes copyright issues in digital industries,
licensing of copyrighted works, and patents usage as a
commercial tool. Professors are also actively engaged in
compiling a series of IP textbooks.

Fudan University - Well-Connected Internationally
-------------- --------------


11. (U) Fudan University's IPR Research Center opened its doors
in 1995 and is the most active of the IP research centers in
Shanghai. Independent from Fudan's law school, the center has
guest professors and part-time advisers and researchers,
including several from Shanghai government offices. According
to the IPR Center Director Zhang Naigen, the center has
developed partnerships with various overseas institutions,
including the WIPO Academy, the Raoul Wallenberg Institute of
Human Rights and Humanitarian Law (Sweden),and the Comparative
Law Institute of Paris First University. In addition, the
center offers Fudan law students a basic IP course in English
with support from guest experts from Philips Corporation.
Beginning in 2006, the center offered an advanced patent law
course for law students enrolled in master's degrees. Research
at the center focuses on technology transfer, Sino-U.S. IP
disputes, e-commerce and Chinese enforcement of WTO standards
and intellectual property. Each year, Fudan's IPR Research
Center hosts a conference on leading topics in IP research.

Shanghai Chinese Tradition Medicine University
-------------- -


12. (SBU) Shanghai prides itself as a center for traditional
Chinese medicine. To develop its lead in the field, Shanghai
established an IP research Center at the Shanghai Chinese
Tradition Medicine University (SCTMU) in 2003. Although the
center does not offer an IP degree, it assists SCTMU faculty and
students research and register patents on traditional Chinese
medicine. The center's director, Song Xiaoting said there are
roughly 100 Chinese IPR experts focused on the field of
medicine, including traditional Chinese medicine, and about 20

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of them are in Shanghai. At SCTMU, there are an estimated 1,500
foreign students who study Chinese traditional medicine, most of
whom are from Japan and South Korea. There are also about 40
students from the United States. Regarding the Patent Law
revision, Song noted the changes in the law will benefit
research in traditional Chinese medicine. He also believes that
the trend in China is for genetic resource and traditional
knowledge IP to be used fairly and reasonably. The best way for
traditional Chinese medicine research to move forward is
"cooperative development" on IP issues.

Views on NIPS and Its Implementation in Shanghai
-------------- ---


13. (SBU) The IP academics were of the opinion that the
National IP Strategy (NIPS) is very general and will likely not
have a measurable effect any one industry, including the
software industry. Regarding the NIPS provision for the
establishment of a national IPR appeal court, Fudan's Zhang
Naigen said such a court is still a long way off - the Civil
Procedure Law would need to be revised to establish a national
IPR appeal court given that such a court would require
jurisdictional changes. However, recent changes to the Civil
Procedure Law did not incorporate this provision. Zhang also
mentioned it would take at least three to five years to start
another round of Civil Procedure Law revisions. Hence, it is
nigh impossible to establish an IPR appeal court in the near
future.


14. (SBU) Regarding Shanghai's plan to implement NIPS, the
academics also said it is very general in nature and unlikely to
produce concrete results. However, they believed more specific
implementing measures would likely come out later and be more
useful. Part of Shanghai's plan includes a provision to set up
an IPR arbitration unit, which the city accomplished in October

2008. Zhang said the establishment of a specialized center was
"nonsense" because Shanghai's arbitration system already
sufficiently handled IPR cases. The special IPR arbitration
unit did not change anything, just consolidated IP cases under
one umbrella and was more for "political show". Zhang added
there is also no such precedent for creating such an IP
arbitration center in international arbitration practice.

Students' Changing Perception of IPR
--------------


15. (SBU) According to the IP academics, IP colleges have
positive impact on the IP awareness of many students on campus.
Students, particularly those who enroll in IP classes, gain a
stronger sense of the role IP plays in boosting innovation and
generally go on to make contributions in the field of IPR.
Since students enrolled in the programs hail from different
provinces in China, they are able to build better IP protection
in their respective homes and contribute to better
inter-jurisdictional cooperation after graduation. The research
published by the schools also shapes people's views on IP and
boosts awareness. Shanghai University's Tao said a good measure
of this change is IP students' attitude toward buying pirated
DVDs. After enrolling in IP programs, students generally change
their perception of buying pirated DVDs from "indifference" to
"disgrace". However, Tao also stated that foreigners are the
main consumers of pirated DVDs in the first place. (Comment:
This is a common comment we hear from interlocutors in Shanghai,
but shops selling pirated DVDs are also filled with plenty of
locals. End comment.) Professors were also unanimous that
students' perception towards foreign IP protection is also
evolving. In prior years, students largely believed that IP
protection in China was a result of pressure from abroad and it
was largely western companies that benefited from the IP system.
However, interlocutors all emphasized that China's academic
community is now focusing on IP protection as a means for
China's own development and innovation and foreigners' IPR
should be protected equally.


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Academics' Views on Judicial Protection
--------------


16. (SBU) On China's judicial IP protection, academics
acknowledged that there is a wide range of abilities and IP
awareness among China's courts. All spoke highly of courts in
Beijing and Shanghai, saying they do a much better job than
courts at other places. Fudan's Zhang said that there are a
number of criteria that point to this conclusion about Beijing
and Shanghai courts: number of cases, case closure rate,
judgment results, protection of rights holders, and general fair
treatment. Zhang also noted that courts throughout China
generally seek guidance from the Supreme Court on complicated IP
cases.

Comment
--------------


17. (SBU) Cooperation between the USG and Shanghai's academic
IP community has the potential to make a real difference in IP
protection, not just in Shanghai but throughout China. All of
the academics with whom we spoke welcome future cooperation
opportunities with the Consulate. The Consulate actively
engages IP institutions on a regular basis; however, our
attempts to cooperate on formal programs have been met with
resistance by the Shanghai Foreign Affairs Office (FAO). Other
than a voluntary speaker program at the ECUPL IP School in May
2006, the Shanghai Foreign Affairs Office has refused to allow
formal IP programs with area universities. Generally all the IP
schools require the Consulate to go through the FAO to request
formal cooperative events. However, space may be opening.
Fudan's Zhang Naigen, for example, recently said there is no
need for the Consulate to go through FAO for formal programs.
Other universities also appear to interpret the FAO requirement
differently. SCTMU's Song said they need to get approval from
Shanghai FAO only for some formal meetings. East China
University's Gao said the approval from FAO is needed only if
U.S. official wants to give a speech at a seminar. However,
there is no need for approval if the speaker is from the private
sector, even though his or her speaking event may be coordinated
by the USG. Given the range of opportunities, the Consulate
plans to continue pushing the envelope with the Shanghai
academic IP community.
CAMP