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Originally printed in the July 2021 issue of Produce Business.

It is not all that often that a produce company winds up with a case before the Supreme Court. So when Cedar Point Nursery v. Hassid rose up a case involving Cedar Point, a strawberry nursery, and Fowler Packing, a shipper of grapes and mandarins we reached out to Jeremy Rabkin, a professor at the Antonin Scalia Law School and asked if he would explain the nature of the issues that brought the produce industry to the Supreme Court.

He was kind enough to do so. The Supreme Court wound up deciding in favor of Cedar Point Nursery and Fowler Packing on June 23. We thought sharing Professor Rabkins analysis of what the case involved would be very valuable:

The first case in this century to deal with labor law involving agricultural workers Cedar Point Nursery v. Hassid was heard by the Supreme Court this year.

The dispute [involved] a regulation requiring agricultural employers to grant access to union organizers to private land, so the organizers can make direct appeals to farm workers to support the union. This regulation requires growers to grant access for up to three hours a day and 120 days a year (in four 30-day periods). Cedar Point and Fowler Packing Co. refused (or tried to refuse) access to union organizers and so ran afoul of the regulatory body, the California Agricultural Labor Relations Board (CALRB).

As most of the California-based judges viewed the issue, CALRB is imposing reasonable regulation of commercial operations. The regulation is constitutional (in their view), since it does not impose costs that preclude commercially viable use of the affected land.

On the other side, advocates for Cedar Point argue that CALRB is not simply regulating how Cedar Point operates but it is taking control of its property. The right to exclude outsiders, they argue, is a fundamental aspect of ownership, and the regulation deprives Cedar Point of that right (even if the deprivation is limited and time-bound).

In the background, then, are different constitutional perspectives on property rights. These constitutional arguments about property have generated considerable interest in Cedar Point. Seventeen amicus briefs were filed with the Supreme Court, all arguing on behalf of property rights of the growers, most from organizations with no particular connection to agriculture policy.

But the Supreme Court likely sees the background constitutional issues only after noticing the foreground dispute about labor relations in agriculture. Perceptions of that foreground setting may well have changed since California began to regulate in this area, nearly a half century ago.

Defenders of the California regulation seem to have a solid precedent on their side. In NLRB v. Babcock & Wilcox(1956), the U.S. Supreme Court held that union organizers might have a legal claim to enter isolated work sites where they could not get access to workers otherwise. In 1975, it was at least plausible to think efforts to organize farm workers in California would fall under this dispensation.

In Babcock, the Supreme Court saw the need for balance between the organizing rights of employees (under the 1935 National Labor Relations Act) and the property rights of employers. But the Court saw that rule as inapplicable to the factory in Babcock (and related cases appealed at the same time): The plants are close to small well-settled communities where a large percentage of the employees live. The usual methods of imparting information are available. The Court concluded that the National Labor Relation Act does not require that the employer permit the use of its facilities for organization when other means are readily available.

Such reasoning in the 1970s might have seemed to justify access requirements for organizers trying to reach farm workers. Back then, a large proportion of farm work was done by migrant workers who lived in temporary shelters on the farms where they worked.

In its amicus brief, the California Farm Bureau Federation (representing growers) points out that some three-quarters of crop workers now work at a single location within 75 miles of their home (and almost all within a metropolitan area); all but a relative handful of workers live outside the properties where they work. The UFW even operates radio stations where it can easily give notice to workers about places to seek information (or impending meetings with organizers at other locations). It is not uncommon for farm workers to have cell phones. Off-site organizers can call them (or the workers can call the organizers) to get information about the time and place of outside meetings where the benefits of unionizing will be discussed.

On the other side, defenders of the CALRB regulation say it is not a great imposition on land owners because it stipulates that organizers should only be allowed an hour before and an hour after work and an hour during the lunch break. The growers complain, however, that the actual practice of organizers was to show up with bull-horns, blaring at workers during their lunch. The regulation, they say, goes beyond provision for distribution of leaflets or scheduling subsequent voluntary meetings. It facilitates bullying tactics, with organizers showing up day after day, haranguing the workers.

The reason to fear bullying tactics is that participation in the United Farm Workers Union has fallen off considerably. It is not because CALRB has failed to support organizing efforts. Even a quite liberal state supreme court chided the board in another case Gerawan Farming vs. ALRB for holding back ballots in a dispute over a union election which turned out to be overwhelmingly against joining the union.

If you accept the premise that workers can decide the question of unionizing for themselves, you might conclude they should be left to decide whether they want to attend organizing meetings at outside locations, rather than insist the organizers must come unto the land where workers happen to be engaged during the day. Or is that making too much fuss about land ownership?

The Fifth Amendment to the federal Constitution prohibits taking private property except for public use and with just compensation. The guarantee does not emphasize land or real estate in particular. But the Supreme Court has long been more sympathetic to complaints about taking of physical property, even when partial and minor.

In this case, the Ninth Circuit judges previously concluded that the access rule imposed by CALRB was not a taking in this sense, because the access rights were of limited duration. An owner may sell a right of access or transit to a particular neighbor or affected business. The sale would not be less valid if the owner stipulated that it was only, say, for weekdays during daylight hours or alternately, only for holidays and other special days.

An amicus brief in Cedar Point, submitted by ten state attorneys general, poses the arresting question: If the government simply claimed such access rights and then handed them off to particular private parties, would that not be regarded as a taking of property?

One can object that it is overly formalistic to focus on whether there is some outside physical presence hence per se taking without analyzing how costly or intrusive it really might be in practice. But there is considerable attraction to drawing a bright line that isolates any ongoing outside presence as objectionable.

The point of private property is that the private owner gets to decide what is the best way to manage it, hence what intrusions to allow and what to reject. True, government regulations may require owners to adopt various safety devices (such as fences around pools or water) and environmental safeguards (say, by protecting endangered species), but the owners get to determine when and how to implement such obligations. Its something else arguably to allow outsiders to come in when they choose and operate directly on the owners land.

The danger of letting courts weigh costs and convenience is that public agencies with license from accommodating judges come to make more and more substantial claims, ending up as co-managers or nearly co-owners of the property, as they weigh how much of its use can be diverted to purposes the actual owner does not approve. It makes private property less private or makes property less meaningful as a claim to control by the owner.

An amicus brief in Cedar Point by the libertarian Cato Institute makes this point by analogy with the Fourth Amendment. That includes the guarantee that police (or other government agents) will not conduct searches except on probable cause [to suspect crime] and normally only after securing search warrants.

The analogy is instructive. Would we say it is acceptable for police to enter homes without warrants, so long as they only show up during the day, dont stay more than 45 minutes and merely take photographs of what can be seen from the center of each room? Would this really be so disruptive? Perhaps not, by some reckonings. But it might well undermine the point of the Fourth Amendment, to protect the home as a refuge from prying eyes.

Of course, we do empower governments to check up on things, even things on private property. Is there a danger that a sweeping decision in Cedar Point will endanger necessary government regulatory measures? It seems unlikely.

Some advocates may see union organizers as helping to implement a public purpose of bringing more workers under the protection of unions. The premise of labor legislation is not that everyone should be in a union but that workers should have a right to decide.

If workers need to be protected against pressure from employers, they may also deserve protection from bullying organizers. Perhaps growers here who add so much to the healthfulness and variety of our meals have some claim to be protected from disruptions, too.

The Supreme Courts willingness to take up Cedar Point suggests it wants to say more about labor law. Perhaps it also wants to say more about property rights. The immediate upshot may be little more than requiring California to pay compensation for letting union organizers march onto private property. But how the Court explains this result may cast a shadow over future legal developments (for good or ill).

The follow up to this decision has been relatively quiet, mostly because the case is complicated. There is no question, though, that it is an important win for growers and, we would say, for all who believe in the concept of private property.

In a conversation with Professor Rabkin after the decision, he pointed out that the 6-3 decision with all the Republican appointees in favor and all the Democratic appointees opposed that this might indicate a common line in defending property rights, even when that requires them to expand the reach of settled precedent.

The legal question revolved heavily on what was a taking and what was a regulation. The majority of justices joined Chief Justice John Roberts opinion relying on the constitutional provision calling for just compensation in the event of a government taking and finding a law that allowed Union Organizers onto private property such a taking:

Government-authorized invasions of property whether by plane, boat, cable, or beachcomber are physical takings requiring just compensation.

In contrast, Justice Stephen Breyer wrote for the dissenting justices:

The regulation does not appropriate anything. It gives union organizers the right temporarily to invade a portion of the property owners land. It thereby limits the landowners right to exclude certain others. The regulation regulates (but does not appropriate) the owners right to exclude.

The California law at issue was enacted in 1975, and the United States Supreme Court had, in 1976, refused to take up the case. So this is a big change of settled law.

Though it didnt seem to be a big issue in the opinion, we would argue that communications technology has made a huge change in the way these types of cases will fall in the future. The invention of cell phones, the Internet, social media, etc., changes these issues. Back in 1975, maybe workers were isolated but, nowadays, they all have cell phones and go on the Internet.

It also was disturbing that Justice Breyers dissent did not give more credence to the rights of property owners. It is one thing to let in police, fire fighters, property inspectors or other government employees who have legal obligations in how to behave and what to do on your property. It is something else entirely to have private actors, not constrained in the same way, traipsing across ones property.

We thank Professor Rabkin for helping the industry think through this important case.

Read more here:
A Produce Industry Victory In The US Supreme Court - Produce Business

Modern technology has many benefits, but one potential downside concerns its effect on individual privacy. A bill scheduled for a hearing this morning in the Massachusetts legislature seeks to protect one aspect of privacy the right to be free from being videotaped in our own backyards. Daniel Medwed, Northeastern University law professor and GBH News legal analyst, joined Aaron Schachter on GBH's Morning Edition to talk about the proposed backyard privacy bill.

Schachter: Lets start with the basics. Who proposed the bill and what is it about?

Medwed: Representative Joseph McKenna is the chief sponsor of the bill, and it is scheduled for a hearing later this morning in the judiciary committee. Heres what it would do, if enacted in its current form: Any owner or tenant of residential real property would have the right to sue anyone who sets up a camera on adjoining property for the purpose of taping or taking photos of activities in the backyard without their consent and with the intent to harass, annoy, alarm or threaten. And that lawsuit could result in the award of monetary damages. Those are the key features.

Schachter: Lots of questions here. What about security cameras? Many people have cameras for surveillance purposes and some of those devices presumably capture images in a neighbors backyard. Would that behavior fall under the bill?

Medwed: No, and heres why. The law is defined quite narrowly. First, the camera must be set up for the purpose of capturing images of backyard activities; A homeowner could claim that a security camera did not have that purpose, that its purpose was to safeguard the home. Second, the person must have the intent to harass, annoy, alarm or threaten those subject to the backyard images and that is a high bar to meet. So I think security cameras, for the most part, wouldnt fall under this potential law. Also, its important to keep in mind that this law would just set up whats called a private civil right of action a right to sue someone in court. It wouldnt create a new criminal offense.

WATCH: Daniel Medwed on "backyard privacy" bill and security cameras

Schachter: Daniel, what about law enforcement? I imagine the police sometimes use video technology to capture images of backyard activities. Would that be covered by this law?

Medwed: No, it wouldnt. The language of the law specifies that it shall not apply to any law enforcement personnel engaged in the conduct of their authorized duties. The key phrase there, I think, is authorized duties. Just because youre a law enforcement officer [it] wouldnt give you license to film your neighbors in violation of this law only if you are authorized to do so, that is, youve gone through the appropriate processes to make sure youre in compliance with the Fourth Amendment and internal policies.

Schachter: What about front yards? I find it curious that the law only addresses backyard activities. Any thoughts on that?

Medwed: Thats an interesting question. I often tell my students that legislation is like a piece of sausage we see it in its nice, tidy casing but dont really know whats inside and how it was exactly produced. My hunch is that the drafters here realized that including front yards would be a tough sell to the legislature and eventually perhaps the courts. To be sure, we have a privacy interest in our front yards and the comings and goings of our front doors but, unlike backyards, our front yards typically face a public street and we all have diminished expectations of privacy in public spaces.

Its possible, though, that front yards could be included in a future iteration or amendment of this bill. Last year our Supreme Judicial Court expressed concerns about the police using long-term pole cameras to track visitors to and from a private residence, so there is precedent for the idea that we have some expectation of privacy even in the front of our homes.

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GBH Do You Have A Right To Privacy In Your Own Backyard? - wgbh.org

U.S. intelligence officials face bipartisan congressional pressure to explain their use of surveillance powers, following a rebuke from a federal judge and Fox News host Tucker Carlson's high-profile dispute with the National Security Agency.

"Our institutions are only as good as the American public's confidence in them," Florida Sen. Marco Rubio wrote a top intelligence official, requesting an investigation of Carlson's allegation the NSA violated his privacy. "The NSA publicly responded to Mr. Carlson's allegations with a statement on Twitter that frankly only created more questions."

Rubio, the top Republican on the Senate Intelligence Committee, did not dispute the NSA's denial of wrongdoing in Carlson's case. Yet, Rubio's request for "a formal inquiry" into Carlson's complaint coincided with a sharper rebuke of the FBI, which has drawn bipartisan ire due to a federal judge's revelation of "pervasive" misuse of data collected by the NSA.

"We each share an obligation to protect Americans' civil liberties," Indiana Republican Rep. Victoria Spartz and California Democratic Rep. Zoe Lofgren wrote in a Tuesday letter to FBI Director Christopher Wray. "However, the FBI has repeatedly violated the civil liberties of Americans through widespread misuse of Section 702 data."

TUCKER CARLSON'S NAME IN NSA INTERCEPTS REVEALED THROUGH 'UNMASKING': REPORT

Section 702 is a provision of federal law that allows the NSA to collect the communications of foreign targets overseas without a warrant. That surveillance authority looms over both controversies, as a Foreign Intelligence Surveillance Court judge revealed FBI officials have failed to follow the rules designed to prevent the Section 702 program from being used in violation of the Fourth Amendment rights of Americans.

"The FBI's failure to properly apply its querying standard when searching Section 702-acquired information was more pervasive than was previously believed," the judge wrote in a November 18, 2020, opinion that the Office of the Director of Intelligence published in April.

Carlson, for his part, has accused President Joe Biden's administration of "spying" on him and planning to leak his plans to interview Russian President Vladimir Putin.

"I wasn't embarrassed about trying to interview Putin. He's obviously newsworthy," Carlson said last month. "But still, in this case, I decided to keep it quiet. I figured that any kind of publicity would rattle the Russians and make the interview less likely to happen. But the Biden administration found out anyway, by reading my emails."

NSA officials denied that Carlson was a "target" of surveillance, while his account spurred outside analysts to surmise the U.S. spy agencies tasked with monitoring the communications of Putin's associates detected Carlson's interview request a phenomenon known as "incidental" collection.

"By law, I should have been identified internally merely as a U.S. journalist or American journalist," Carlson said. "But that's not how I was identified. It was identified by name. I was unmasked."

Rubio, following Carlson's demand for an explanation from National Intelligence director Avril Haines and NSA Director Paul Nakasone, urged Haines to coordinate with the NSA to launch a "formal inquiry" into both aspects of the controversy: the initial information gathering and the alleged unmasking.

However, the senator did not dispute the NSA's denial and suggested a transparent investigation might clear the air.

"Our institutions are only as good as the American public's confidence in them," Rubio wrote to Haines. "As such, it is essential that the IC under your leadership hold itself to account if misconduct has occurred, and convincingly reassure an American public increasingly attuned to the perception of widespread misconduct where it has not occurred."

Spartz, Lofgren, and 15 other House lawmakers took up the FISA court judge's findings rather than Carlson's complaint. They signaled to Wray they are confident the FBI is guilty of "misuse of raw Section 702 data," although they did not refer to Carlson. They set a deadline for the FBI chief to schedule a classified briefing on the controversy.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

"The FBI has systematically failed to comply with Section 702 restrictions and its own regulations to protect Americans' civil liberties," Spartz, the Indiana Republican, said Tuesday in a statement accompanying the release of the Aug. 2 letter. "The core function of the government is to protect our constitutional rights, and members of Congress should be briefed by FBI officials regarding the bureau's efforts to remediate this issue."

Original Location: Congress pressures US spy agencies as Tucker Carlson feuds with NSA

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Congress pressures US spy agencies as Tucker Carlson feuds with NSA - Denver Gazette

WhatsApp surveillance orders are being signed off on without the government needing to explain why it wants them.

In July of last year, the Drug Enforcement Administration in Ohio wanted to carry out surveillance on seven WhatsApp users. To do that, agents asked a judge to approve the use of surveillance tools known as pen register and trap and trace devices. While they wouldnt get the actual content of WhatsApp messages, they would get up-to-date information on what numbers those WhatsApp users were either messaging or calling, when, for how long and from what IP address. The latter part could also provide a rough geolocation of the user, hence the use of pen registers to both build up cases against suspects by showing, for instance, with whom drug dealers are communicating, and to assist in tracking down fugitives.

But in the investigators application to have the surveillance device installed on WhatsApp systems, there was almost zero detail on just why the DEA wanted to spy on all those numbers, regardless of where they were based (four of the seven users had Mexican telephone numbers) and for a period of 60 days. Thats because the government doesnt actually need to give a full explanation to a judge to get their approval for a pen register, thanks to a U.S. law that privacy experts say needs a drastic update so that federal agencies have to provide more detail on why they need to carry out surveillance using the surveillance tool. At a time when theres heightened concern about surveillance of encrypted apps like WhatsApp, in part thanks to the Pegasus Project revelations of global unchecked spyware use via Israeli provider NSO, pen registers represent a little-understood, potentially privacy-endangering surveillance method that the U.S. government uses frequently on Facebook and its hugely popular messaging tool.

In the Ohio pen register application, the government wrote explicitly that it only needs to provide three facts to get approval to use a pen register, none of which provide any background on the relevant investigation. They include: the identity of the attorney or the law enforcement officer making the application; the identity of the agency making the application; and a certification from the applicant that the information likely to be obtained is relevant to an ongoing criminal investigation being conducted by that agency. This explanation, cited word-for-word in other pen register applications across various states reviewed by Forbes, is based on the Pen Register Act within the Electronic Communications Privacy Act of 1986. Under that law, courts have held that the Fourth Amendment, protecting Americans from unreasonable searches, does not apply to such surveillance, so theres no need for investigators to show probable cause.

Critics say that the law is inadequate. If that is all the government needs to inform the court, then what is the point of having a statutory standard in the first place? It is doing no work at all, says Jennifer Granick, surveillance and cybersecurity counsel at the American Civil Liberties Union (ACLU). We knew that the certification standard was abysmally low, but I thought that at the very least the government was respectful enough to tell the court what is going on so that it could ask questions and exercise moral suasion. Its a short step between saying that you dont have to do anything beyond reciting boilerplate text, and actually refusing to do anything other than recite boilerplate text.

The legalese above is the government's explanation of why it doesn't need to give any facts about its investigation when applying for a pen register to carry out surveillance on seven WhatsApp numbers.

The government does sometimes provide more information on why it is going to use a pen register, but that typically happens when they are applying for more information from a telecom or internet company under different laws. In an investigation in Missouri, where police were looking for a fugitive charged with drug dealing, the government had the surveillance device used on a Facebook account of interest, but also asked the social media giant to provide subscriber information, like the users name and address. For the latter, the government had to provide specific and articulable facts that proved the data being requested was relevant to the investigation, under another part of the Electronic Communications Privacy Act. Such hybrid orders that combine both the Pen Register Act and Stored Communications Act sections of the ECPA were last year deemed inherently questionable by the Electronic Frontier Foundation (EFF) because they are not explicitly authorized by federal law.

However it applies to use them, the government can put pen traps on almost any technology that transmits some kind of message, from cellphone services to other social media apps like Snapchat and LinkedIn. That includes car Wi-Fi systems. A recent report in Forbes detailed the surveillance of a Dodge vehicle with a device that imitates a cellphone tower in order to identify and locate a target of interest. But before that, they put a pen register on the cars internal modem that provides the Wi-Fi. After they deployed all the snooping tech, the suspect was arrested.

Though the ACLU and other privacy-focused nonprofits have, for much of the last two decades, called for laws that force the government to provide full explanations and probable cause for pen registers mandatory, theres little sign of any desire for urgent change on Capitol Hill. But, given the government is increasingly using pen registers to track all kinds of modern technologies, ones that didnt exist when the 1986 law that determines their use was created, greater oversight of this much-used surveillance method could be incoming.

This story is part of The Wire IRL feature in my newsletter, The Wiretap, where Ill provide links to the full search warrants described above. Out every Monday, its a mix of strange true crime and real-world surveillance, with all the relevant search warrants and court documents for you to pore over. Theres also all the cybersecurity and privacy news you need to read. Sign up here.

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How American Law Lets Feds Spy On WhatsApp Without Needing To Say Why - Forbes

In March of 2021, Chinas most important annual political meetings took place as thousands of delegates to the National Peoples Congress (NPC), the national legislature, and the Chinese Peoples Political Consultative Conference (CPPCC), the top political advisory body, convened for a week at the Great Hall of the People in Beijing. Commonly known as thelianghui or Two Sessions this years elite gatherings in Beijing were particularly significant. The Chinese leadership not only set the national socio-economic and political priorities for 2021, but also approved Chinas 14th Five-Year Plan (FYP) (2021-2025), the grand strategic blueprint for the next half decade, as well as longer-term goals for 2035. Whats more, 2021 marks the centenary of the founding of the Chinese Communist Party (CCP), with the 100th anniversary officially commemorated in July.

For the business world, the lianghui provided a critical bellwether for taking stock of how Beijing intends to steer the Chinese economy in the year ahead, through 2025, and beyond. Major themes included:

This article will focus on how the lianghui will impact intellectual property (IP).

As China aims to become a leading innovative country by 2035, the work report laid out an ambitious national technological blueprint for the next five years, emphasizing that innovation remains at the heart of Chinas modernization drive. The government vowed to focus on achieving major breakthroughs in core technologies, including next-generation artificial intelligence, semiconductors, cloud computing, and other key areas, as well as establish more national laboratories and innovation centers. Beijing will also aim to get 56% of the country on 5G networks. By 2025, the government aims to have the digital economy account for about 10% of Chinas newly added economic output.

Eight projects were identified as impacting the digital economy, namely cloud computing, big data, Internet of things, industrial networks, block chain, artificial intelligence, virtual reality, and augmented reality according to the China National Intellectual Property Administration (CNIPA).

From 2021-2025, research and development (R&D) spending will be ramped up by more than 7% every year, with expenditures expected to account for a higher percentage of GDP than that during the 13th FYP period. This year, China will increase its spending on basic research by 10.6%. The work report also said that the government will continue the policy of granting an extra tax deduction of 75% on enterprises R&D costs and raise this to 100% for manufacturing enterprises.

As can be seen, this continues a strong trend in increasing R&D funding that started in 1995 and indicates a commitment to R&D as well as providing tax incentives for R&D projects being in China.

In particular, the 14th FYP featured a renewed focus on accelerating the Fourth Industrial Revolution and transforming China into an advanced manufacturing superpower, outlining plans to strengthen Chinas global competitiveness in areas such as robotics, new energy vehicles, aircraft development, and agricultural machinery, among others. Speaking on the sidelines of the Two Sessions, Xiao Yaqing, Minister of Industry and Information Technology, said, The manufacturing industry is the lifeblood of the countrys economy, and the real economy should be further strengthened and improved.

Miao Wei, a government advisor and member of the CPPCC, predicted that it will take at least three decades to achieve Chinas goal of becoming a manufacturing powerhouse, saying that China is still a third-tier manufacturing power and citing Germany and the U.S. as examples of first-tier manufacturing nations. Chinas manufacturing output as a share of its economy has declined in recent years, slipping to just over a quarter of GDP in 2020, and Miao warned that this has been occurring too early and too quickly.

The significant commitments for elevated R&D spending and plans for a reinvigorated manufacturing drive underscored Beijings determination to continue expanding the role of innovation as a major growth engine for the Chinese economy. Coming amid growing rivalries with the United States and other major economies around technology, the goals also reflected a rising urgency to reduce Chinas technological dependency on external markets and mitigate the vulnerabilities of its supply chains to geopolitical tensions. Going forward, this will be a top official priority under DCS. This reliance on external markets has caused issues with R&D in China.

For the first time in a work report, the government also pledged to expand efforts against business monopolies as part of efforts to ensure fair market competition. Coming after the recent launch of an anti-trust crackdown targeting domestic tech giants, the announcement signaled that the tougher approach to governing Chinas booming technology sectors can be expected to intensify further. Companies should be prepared for the likelihood that authorities will take a more active and interventionist role in the Chinese private sector. Similar trends are developing in the United States. See our recent article on "Promoting Competition in the American Economy Executive Order: Antitrust Is Back?"

Intellectual property (IP) owners are advised to have a working knowledge of the recent draft published in April of this year to see what is planned for the coming years. Knowledge of the FYP will help to set the check points for ones own IP strategy and plans.

Intellectual property has taken a key role in the development of technological progress in Chinas big economy. Chinas IP system is gradually changing, with each plan having various focus points. In the FYP, two major focus points are evident:

These two focus areas are further detailed below.

The enforcement system of the patent law has been strengthened with the recent fourth amendment. This includes valuable rights for the pharmaceutical sector. The implementation of the FYP will further emphasize the use of the newly-created, punitive compensation system for infringement of patents and will increase the damage compensation. Exposure to multiples of up to five times the otherwise calculated damages are likely to become a more common. In addition, the criminal enforcement of IP rights has been proposed.

Improvements to the judicial and administrative branches of the law enforcement system of intellectual property rights were announced, together with work on the effectiveness of the arbitration and mediation system. Notarization requirements were also mentioned as being within the scope of the reform.

It can be expected that the next five years will bring a more detailed and standardized IP protection regime of the administrative departments and the judiciary. Besides the abovementioned tools to act against infringers, it will be crucial to check in detail what else will be designed to improve IP enforcement. The details may determine the balance between plaintiff and accused infringers in the infringement proceedings and hopefully will provide a less complex and more predictable proceedings according to accepted guidelines.

Handling of overseas IP disputes will be guided with support from the Chinese government, through new platforms such as the National Guidance Center for Handling Overseas Intellectual Property Disputes with ten local sub-centers. There is also an intention to provide intensive training.

This demonstrates that knowledge on the IP system will be crucial for IP creation and enforcement strategies for IP owners entering the Chinese system as well as for Chinese looking abroad.

The FYP has a clear focus on high-technology fields, of which the following are specifically mentioned: quantum information, photonics and micro-nanoelectronics, network communications, artificial intelligence, biomedicine and modern energy systems. While there is a focus on becoming a leader, or at least becoming fully self-reliant in these technology sectors, the IP related to these technologies will likely see the most benefits in the future investment via national laboratories. In addition, it can be assumed that patentability exclusions and patentability hurdles (e.g. for business methods or software per se) will be further softened or lowered to allow the drafting of claims that cover these fields.

All applicants in the high-tech sector will benefit from these improvements. Therefore, patent applications that face examination challenges may become acceptable in the next five years. It could be worthwhile to pursue inventions in those areas. It will be important to watch for practice changes to see which claim formats are supported by the CNIPA patent office. According to a media interview with Shen Changyu, CNIPA Director, there is currently ongoing research on how to deal with the question of whether works and inventions completed by AI can generate new IP rights. Interesting questions may be posed and answered.

While these high-tech fields will be supported, there is another important initiative that focuses on the quality of IP. This initiative is implemented through the promotion of ownership of high-value invention patents per 10,000 population in the FYP, which replaces the old targets of ownership of invention patents per 10,000 population in previous plans. It is worth noting that the number of high-value invention patents owned by per 10,000 people reach 12 this year and was a record. As part of the quality initiative, we have seen the drafting of a completely new legislation to prevent irregular patent applications, including revisions of the Measures on Regulating Patent Application Behaviors.

The recent discussion has raised concerns on whether the new measures could also be overreaching and may negatively affect IP strategies which have been commonly used to pursue legitimate goals of the innovator (e.g., filing multiple divisional applications to obtain the optimal protection for all the best inventive features). This should be carefully watched to not stumble into the scope of these regulations that should according to its original purpose prevent misuse of the IP system.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.

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Chinas 14th Five-Year Plan (2021-2025) and Its Impact on Your Intellectual Property Portfolio - JD Supra