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Is "forced" technology transfer against WTO TRIPS agreement? The TRIPS agreement state that it's an agreement that seeks to help both users and producers benefit from the agreement through technology transfer and protection and enforcement of property rights.

The general goals of the TRIPS Agreement are contained in the Preamble of the Agreement, which reproduces the basic Uruguay Round negotiating objectives established in the TRIPS area by the 1986 Punta del Este Declaration and the 1988/89 Mid-Term Review. These objectives include the reduction of distortions and impediments to international trade, promotion of effective and adequate protection of intellectual property rights, and ensuring that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade. These objectives should be read in conjunction with Article 7, entitled “Objectives”, according to which the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations. Article 8, entitled “Principles”, recognizes the rights of Members to adopt measures for public health and other public interest reasons and to prevent the abuse of intellectual property rights, provided that such measures are consistent with the provisions of the TRIPS Agreement.

However, it doesn't say how the technology should be transferred anywhere. So is China's "forced" technology transfer legal under the TRIPS agreement?

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    What is China's actual rule here? This is likely to devolve into a question of what "forced" means when companies voluntarily contract with Chinese subcontractors... – pjc50 Aug 30 at 10:05
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This is a complex topic, but the Trump administration is on the wrong side on this one. After all, the U.S. circumvented the WTO during the trade dispute instead of relying on its mechanisms to settle its dispute as any other WTO member would have done. As for the legality of technology transfer, there's no clear-cut rule on how countries should do this, but countries are allowed to require companies to transfer their technology as shown in the bolded part in the quote below.

As a member of WTO, China’s intellectual property law and policy must be in conformity with the requirements in the TRIPS Agreement and the provisions of the international treaties that it incorporates. China is also bound vis-à-vis the parties of other intellectual property treaties it has signed. In accordance with the terms of its accession Protocol to the WTO, China has the same obligations under the TRIPS Agreement as other developing countries. The Accession Protocol requires China to bring its intellectual property laws and provisions into conformity with the TRIPS Agreement but, with one exception, does not require China to go beyond the obligations imposed by those provisions. Thus, the merit of US claims on the basis of which China has been placed in Priority Watch List must be tested on the anvil of China’s WTO obligations regarding the TRIPS Agreement. A preliminary review of the USTR arguments in the light of such obligations suggests the following:

First, there is no obligation on any WTO member under the TRIPS Agreement to enact a specific law for the protection of trade secrets. Article 39.2 of the TRIPS Agreement recognizes the right of natural or legal persons to protect information lawfully under their control from being disclosed to third parties without their consent, but does not prescribe how WTO members should implement such protection. Many WTO members do not have a specific trade secret law, but they generally protect it in the framework of unfair competition rules. China has the flexibility under the TRIPS Agreement to determine how to protect trade secrets and is not required to enact a specific trade secret law.

Second, the TRIPS Agreement requires WTO members to provide right holders with effective procedures and mechanisms for enforcing their rights, including measures to prevent infringements and remedies which constitute a deterrent to further infringements. However, the specific nature of these procedures and remedies are not specified. Indeed, WTO members have no obligation to create special regimes for the enforcement of IP that is separate from the general enforcement regime they have. Nonetheless, China has gone further and established specialized intellectual property tribunals in various provinces. Moreover, the primary obligation for enforcing IP rights is on the right holder and not the State. Thus, the US allegation regarding lack of decisive action to curb counterfeit goods or bad faith registration of trademarks is untenable because the onus of taking decisive action against such acts falls on the right holders. The fundamental question is whether the procedures available to right holders to initiate such enforcement action are effective. A 2009 WTO panel ruling on a dispute be-tween the US and China (China –Measures Affecting the Protection and Enforcement of Intellectual Property Rights)did not find the IP enforcement regime in China relating to customs measures and criminal liability thresh-olds to be in contravention of the obligations under the TRIPS Agreement.

Third, there is no specific TRIPS obligation on WTO members with regard to addressing counterfeiting and piracy online. The WIPO Copyright Treaty (WCT), to which China is a Contracting Party, requires the application of measures necessary for the enforcement of copyright in the digital domain, but also clarifies that such measures need not be distinct from the general legal system of the Contracting Party. The additional standards of protection introduced by the WCT are not mandatory under the TRIPS Agreement. Moreover, the US has not alleged that China’s IP enforcement regime relating to copyright in the digital domain is not consistent with the WCT.

Fourth, contrary to US assertion, it is legitimate under the TRIPS Agreement for any country to use com-petition law and policy to advance industrial policy goals. There are no binding international rules limiting the policy space to design national disciplines on com-petition law. Hence, countries are free to design their competition laws in accordance with their domestic interests and needs, taking their level of development into account, subject only to the limitations arising from the territorial applicability of such laws.

Fifth, the requirement in Chinese law for any person participating in a standardization process to disclose all essential patents related to technical standards is not unique. Even in standard setting organizations in developed countries such as the American National Standards Institute (ANSI), European Telecommunications Standards Institute (ETSI) and Organization for the Advancement of Structured Information Standards (OASIS), the disclosure requirement is a common means to enable their technical committees to arrive at a fully informed decision about the particular technical specification and the estimated licensing costs. Such a requirement is not banned by the TRIPS Agreement, and is key to avoid anti-competitive practices resulting from opportunistic conduct of patent owners. In fact, in the US and other countries competition authorities and courts have taken measures to protect the public interests against the abuse of standard essential patents, including by refusal of injunctive relief.

Sixth, Chinese patent examination guidelines have been amended to permit pharmaceutical patent applicants to file supplementary experimental data after filing their patent applications, but the applicant must satisfy the examiner that the technical effect of the supplementary data is capable of being derived from the original disclosure. The US contends that Chinese patent examiners have not applied the new guidelines to all examination questions to which supplementary data is germane. However, the Chinese guidelines only specifically apply to the admission of supplementary data in relation to sufficiency of disclosure objections raised by examiners. It is a matter of policy for China to determine whether supplementary data should also be admitted for other examination questions such as inventive step and novelty. This policy is fully within the space left by the TRIPS Agreement to WTO members to articulate patent examinations procedures.

Seventh, the US objects to the strict definition of a “new drug” that would be eligible for regulatory data protection under Chinese law. China accepted in the WTO ac-cession process a TRIPS-plus obligation regarding test data for pharmaceutical products, through a commitment to introduce a form of “data exclusivity” that is not required under article 39.3 of the TRIPS Agreement. How-ever, this commitment did not include any limitation regarding the way in which certain concepts, such as when a drug is to be deemed “new”, could be applied. Hence, it is a policy choice that China can legitimately make under the WTO rules. Data exclusivity has been imposed by the United States and the European Union to partners in several free trade agreements, but the latter also generally enjoy some flexibility to mitigate the negative impact of such a TRIPS-plus protection in relation to access to medicines.It is also worth noting that new draft rules aimed at enhancing test data protection were released in China for public comment in April 2018.

Eighth, the USTR report merely alleges without any substantiation that major amendments in China’s copy-right law have not been carried out. No analysis is given in the USTR report regarding specific provisions in China’s copyright law that are regarded by the US as inconsistent with TRIPS obligations.

Ninth, pursuant to an instruction from the US President, USTR conducted an investigation which found that Chinese acts, policies or practices, such as foreign owner-ship restrictions and administrative review and licensing processes to require US companies to transfer technology, restrictions in technology regulations on terms of licensing technologies, facilitation of investment in and acquisition of US companies and their IP over cutting-edge technologies by Chinese companies, and intrusions into computer networks of US companies to access sensitive commercial information and trade secrets, to be unreasonable, burdensome and discriminatory towards US commerce. Thus, the USTR has raised tariffs on certain products of Chinese origin and has initiated dispute settlement proceedings at the WTO against China’s alleged discriminatory licensing requirements. While these issues, to the extent covered by the WTO rules, will have to be settled through the WTO dispute settlement procedures, the unilateral imposition of increased tariffs on products of Chinese origin by the US without a resolution through the established WTO dispute settlement procedures, is in clear contravention to the WTO rules.Importantly, neither TRIPS nor the TRIMS Agreement forbid or otherwise regulate technology transfer performance requirements, particularly commitments of technology transfer that companies may be required and accept to make as one of the conditions for approval of a foreign direct investment.

Tenth, requirements in Chinese law to disclose ICT-related intellectual property on grounds of cybersecurity are not subject to the TRIPS disciplines; in any case, they would fall within the security exception that is available under that Agreement.

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