Trade Secrets and market Access Enforcement 23. Barriers to market access: Revisions to the High and New 27. Civil and procedural remedies; and 28 Preestablished Technology Enterprise regime issued in 2016 raise the damages and/or mechanisms for determining the criteria for IP ownership for companies seeking to qualify amount of damages generated by infringement: The for a reduction in corporate income tax on the basis of R&D draft patent amendments issued by SIPO and under review conducted in China. Under the revised rules, in order to in 2016 would increase statutory damages significantly from benefit from a reduced corporate tax rate(15% instead of RMB10000-RMB1 million to rmb100. 000-RMB5 million 25%), companies must locally own, rather than license, IP (about USD750, 000). In relation to damages, the Judicial nd the IP must be related to the company's core products Interpretation on patent infringement shifts the burden of and services. The heighted requirements for the transfer of proof to infringers and allows the release of evidence from present higher transaction costs and barriers to accessing infringers in order to promote a more accurate calculation the market, particularly for multinational companie of damages, resulting in score of o 25 for indicator 28. Local statistics generated from court cases since 2014 24. Regulatory and administrative barriers to the indicate that currently, on average, damages awarded commercialization of IP assets: Technology companies are about RMb80, 000, which is considered too low to face a growing number of regulatory and procedural ompensate patent holders adequately. At the same time, to licensing in China that impede technology flows and the draft patent amendments would expand administrative R&D cooperation. In general, licensing agreements must enforcement of patents, including extending the authority receive government approval. In addition, technology afforded to local IP offices(such as the ability to investigate export regulations involve discriminatory conditions and impose patent infringement penalties). Legal experts for foreign licensors, including indemnification of Chinese raise concerns that this may heighten existing uncertainty es against third-party infringement and transfer of about the respective roles of administrative departments ownership of future improvements on a licensed technology and courts and undermine effective enforcement to the licensee (whereas a Chinese iP owner is able to negotiate different terms). In the context of standards- etting, there is also a trend toward greater administrative involvement in determining patent licensing terms and the ability to secure relief from infringement. The Anti-Monopoly Commission is preparing Anti-Monopoly Guidelines on the Abuse of Intellectual Property Rights, based on input from the three antimonopoly enforcement agencies. Draft Guidelines released by the individual enforcement agencies in 2016 raised serious concerns among industry regar provisions that would impose antimonopoly sanctions on refusals to license and excessive pricing. In addition, draft patent amendments would allow for automatic licensing of Standard Essential Patents(SEPs)where a patent was not disclosed as part of participation in a national standard etting process(although royalties would be negotiated eparately). In the meantime, the new Judicial Interpretation on patent infringement allows a court to not issue injunctions in cases of infringement where it determines the atent holder has not followed fair reasonable discriminatory(FRAND) license terms, and inadequate detail provided concerning how this would be determined, leaving greater room for reverse patent hold up THE ROOTS OF INNOVATION U.S. Chamber International IP Index Fifth Edition I[ THE ROOTS OF INNOVATION U.S. Chamber International IP Index | Fifth Edition ] Trade Secrets and Market Access 23. Barriers to market access: Revisions to the High and New Technology Enterprise regime issued in 2016 raise the criteria for IP ownership for companies seeking to qualify for a reduction in corporate income tax on the basis of R&D conducted in China. Under the revised rules, in order to benefit from a reduced corporate tax rate (15% instead of 25%), companies must locally own, rather than license, IP and the IP must be related to the company’s core products and services. The heighted requirements for the transfer of IP present higher transaction costs and barriers to accessing the market, particularly for multinational companies. 24. Regulatory and administrative barriers to the commercialization of IP assets: Technology companies face a growing number of regulatory and procedural barriers to licensing in China that impede technology flows and R&D cooperation. In general, licensing agreements must receive government approval. In addition, technology import/export regulations involve discriminatory conditions for foreign licensors, including indemnification of Chinese licensees against third-party infringement and transfer of ownership of future improvements on a licensed technology to the licensee (whereas a Chinese IP owner is able to negotiate different terms). In the context of standards￾setting, there is also a trend toward greater administrative involvement in determining patent licensing terms and the ability to secure relief from infringement. The Anti-Monopoly Commission is preparing Anti-Monopoly Guidelines on the Abuse of Intellectual Property Rights, based on input from the three antimonopoly enforcement agencies. Draft Guidelines released by the individual enforcement agencies in 2016 raised serious concerns among industry regarding provisions that would impose antimonopoly sanctions on refusals to license and excessive pricing. In addition, draft patent amendments would allow for automatic licensing of Standard Essential Patents (SEPs) where a patent was not disclosed as part of participation in a national standard￾setting process (although royalties would be negotiated separately). In the meantime, the new Judicial Interpretation on patent infringement allows a court to not issue injunctions in cases of infringement where it determines the patent holder has not followed fair, reasonable, and non￾discriminatory (FRAND) license terms, and inadequate detail is provided concerning how this would be determined, leaving greater room for reverse patent hold up. Enforcement 27. Civil and procedural remedies; and 28. Preestablished damages and/or mechanisms for determining the amount of damages generated by infringement: The draft patent amendments issued by SIPO and under review in 2016 would increase statutory damages significantly from RMB10,000–RMB1 million to RMB100,000–RMB5 million (about USD750,000). In relation to damages, the Judicial Interpretation on patent infringement shifts the burden of proof to infringers and allows the release of evidence from infringers in order to promote a more accurate calculation of damages, resulting in a rise in score of 0.25 for indicator 28. Local statistics generated from court cases since 2014 indicate that currently, on average, damages awarded are about RMB80,000, which is considered too low to compensate patent holders adequately. At the same time, the draft patent amendments would expand administrative enforcement of patents, including extending the authority afforded to local IP offices (such as the ability to investigate and impose patent infringement penalties). Legal experts raise concerns that this may heighten existing uncertainty about the respective roles of administrative departments and courts and undermine effective enforcement