The Intellectual Property Protection System of the Foreign Investment Law: Basic Structure, Motivation and Game Logic

TL;DR

This paper analyzes China's Foreign Investment Law's intellectual property protection system, highlighting its development influenced by international and domestic factors, and models the strategic interactions between China, foreign investors, and other countries using game theory.

Contribution

It constructs two formal game models to analyze the strategic interests and behaviors of China, foreign investors, and other countries regarding IPR protection under the law.

Findings

China's IPR system attracts foreign investment effectively.

Optimal strategies involve cautious foreign investment and strict enforcement by China.

Game models reveal strategic interests and potential cooperation outcomes.

Abstract

The intellectual property protection system constructed by China's Foreign Investment Law has opened a new phase of rule of law protection of intellectual property rights for foreign-invested enterprises, which is an important institutional support indispensable for optimizing the business environment under the rule of law.The development of the regime was influenced by the major concerns of investors' home countries, the "innovation-driven development" strategy, and the trend towards a high level of stringent protection of international intellectual property and investment rules.In addition, there is a latent game of interests between multiple subjects, which can be analyzed by constructing two standard formal game models according to legal game theory.The first game model aims to compare and analyze the gains and losses of China and India's IPR protection system for foreign-invested enterprises to attract foreign investment.The second game model is designed to analyze the benefits of China and foreign investors under their respective possible behaviors before and after the inclusion of IPR protection provisions in the Foreign Investment Law, with the optimal solution being a "moderately cautious" strategy for foreign investors and a "strict enforcement" strategy for China.