China's Indigenous Innovation Policy and its Effect on Foreign Intellectual Property Rights Holders

From the end of last year, King & Wood has received regular requests from a number of foreign enterprises for advice on China's 'Indigenous Innovation' Policy. These firms are concerned that the new policy will either force the transfer of their IP rights to China or will influence their business operations in the Chinese market by limiting their ability to compete with local domestic firms.

'Indigenous Innovation' is a national strategy put forward by the Chinese government for the purpose of promoting the development of technological innovation in domestic firms, eventually leading to the ownership of their own core IP rights. Due to large volume export processing, China has long been labeled with the moniker 'The World's Factory', yet Chinese enterprises are primarily engaged in low added-value, high-waste manufacturing, and the core skills of production remain out of reach for many domestic firms. It is from this background that the new "Indigenous Innovation"