Opinion | How Hong Kong’s role as a foreign investment gateway to China will be solidified

Although China has been strengthening its intellectual property laws, weak enforcement remains a concern, especially for foreign firms

A recent bill on reciprocal recognition and enforcement of judgments in civil and commercial matters between Hong Kong and the mainland puts the city in a unique position

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Light rays emerge from the International Finance Centre in Hong Kong’s Central business district in October 2021. Photo: Nora Tam

Published: 1:45pm, 5 May 2022

No image is a more iconic signifier of the end of a court case than the judge banging his or her gavel. When the gavel comes down and a verdict is delivered, the case comes to an end. For most litigants, the objective of seeking a win in court is to obtain justice and remedy. The latter can only occur if judgments are enforced.

Among the challenges facing foreign companies operating in China, two that are often cited are the country’s opaque administrative rules and regulations, and the protection of intellectual property rights.

Since joining the World Trade Organization in 2001, China has strengthened its legal framework and amended its laws and regulations on intellectual property rights, most recently last October with the 14th Five-Year Plan Notice on Intellectual Property.

However, existing mechanisms for enforcement of civil and commercial judgments between Hong Kong and the mainland do not meet the needs of stakeholders, including the business community. This is especially true given the extensive and growing socioeconomic ties between the two places.

Weak enforcement continues to impede China’s intellectual property rights system. Foreign firms have long complained that enforcing their intellectual property rights in China is difficult due to local judicial protectionism, challenges in obtaining evidence, small awards of damages, and a perceived bias against foreign firms.

The awkwardly named and recently introduced “Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Bill” aims to assist with this and other legal issues through a reciprocal arrangement on recognition and enforcement of judgments.