Companies encouraged to seek indigenous product qualification

The controversial accreditation notice was thrust into the limelight again recently when the US International Trade Commission held two days of hearings in mid-June on intellectual property rights infringement in China and on China's indigenous innovation policies.

But the opposition and complaints are not deterring China from proceeding with its IIP certification process. Recognising that China is not unique in implementing domestic economy-encouraging policies, some commentators feel that foreign investors should invest their energies and efforts into receiving product qualification instead of resisting the catalogue.

“Foreign companies should be proactive and get their products qualified,” said Chen. “The Shanghai catalogue of indigenous innovation products has a fairly small number of products from foreign companies' Shanghai subsidiaries. This tells me that foreign companies are not being proactive enough.”

Chen strongly recommends applying for accreditation: “You want to give it a try – there is no punishment even if your application is rejected. If the rejection is unreasonable, you will then have factual support for your complaint.”

Other suggestions he has for foreign companies is they could participate in industry association activities or get involved in lobbying.

“By participating in the IIP certification process, international companies will help make the process more transparent, and a transparent process will in turn benefit all participants,” said Chen.

The vociferous protests by foreign companies are spawned by the fear that their products will lose out on government procurement contracts if they are not accredited and listed in the catalogue. Although described as a “legitimate fear” by one counsel, he pointed out that a company can still be invited to bid regardless of its product's status in the catalogue. Whether or not the government will favour a product with national-level indigenous innovation qualification is not clear and has yet to be tested.

Applying for accreditation

An applicant, a manufacturing unit with Chinese legal status, must first determine if its product falls within the scope of the six categories outlined in the notice: computing and application hardware, telecommunications hardware, modern office equipment software, new energy and equipment, and highly efficient energy-saving products.

Once this has been verified, there is a list of six conditions the product must fulfill.

Then, as stated in the draft policy, applicants are told to “print out their declaration form and submit it, along with other relevant supporting documents” to their regional science and technology department.

As outlined in article 5 of the 2006 NDRC, Most and Mof-issued Measures for the Administration of the Recognition of National Indigenous Innovation Products (Trial Implementation) (国家自主创新产品认定管理办法(试行)), the list of supporting documents could include:

- a duplicate or copy of the applicant's business licence
- intellectual property status documents
- product testing reports
- a special manufacturing licence (if the product requires special manufacturing)
- a certificate proving the product meets a certain industry standard (for example, if the product has received a certificate of environmental protection)
- any technical documents to substantiate claims (for example, if an applicant claims the product saves energy, it should provide the relevant documents to prove this)

For the intellectual property status documents, the applicant would need to provide copies showing ownership of the product's Chinese patents or trademarks, or licensing rights.