Taorui Guan on Personalizing Patent Law with Social Credit Data (JIPEL)

"Personalizing Patent Law with Social Credit Data"
Taorui Guan
NYU Journal of Intellectual Property and Entertainment Law (Vol 13, no. 2, spring 2024)
Published online: July 2024

Abstract: In the era of digitization, data has become a pivotal force driving advancements across various sectors and transforming legal systems worldwide. China, in particular, is exploring new data-driven governance models. A prime example of this is its integration of the patent system with the Social Credit System (SCS). This paper aims to fill the void in theoretical research on this subject, moving beyond the prevalent narrative of the SCS as either a tool of state surveillance or a reputation-based regulatory mechanism. Instead, it introduces the concept of personalized law in the context of China’s patent system.

The paper suggests that the integration of social credit data within China’s patent law system aligns the system’s operations more closely with its objectives. This offers a personalized approach that provides individual market entities with tailored incentives based on their unique characteristics. To analyze this approach, the paper proposes a novel four-part analytical framework: profiling, personalization, communication, and adjustment. The paper then applies this framework to the two core mechanisms that result from the integration of the patent system with the SCS: the Reward and Punishment Mechanism and the Tiered Regulation Mechanism. This analysis reveals that these mechanisms are still in the stage of crude personalization and grapples with challenges such as narrow data scope, lack of transparency, and over-penalization.

The paper discusses two implications of personalized law reform: the redistribution of power toward administrative bodies—which necessitates a rebalancing of powers to avoid abuse and protect individual rights—and the possible expansion of the law’s functions—which might not align with existing normative theories and might have unintended consequences. The process of personalization requires scholars and policymakers to adapt and refine these theories as well as to identify and eliminate unintended consequences.

"The Paradox of Information Control in China" (Clement Chen Profiled in HKU's The Bulletin)

"The Paradox of Information Control in China"

The Bulletin

Published in May 2020

Chinese law allows access to information on the one hand but restricts it on the other, which has a troubling impact on everything from virus outbreak controls to the country’s new social credit system.

The COVID-19 coronavirus outbreak that started in Wuhan this past winter triggered deep questions about the flow of information in Mainland China, as officials played down the threat until it became too big to ignore. To those who experienced SARS in 2003, the situation was depressingly familiar. 

     Dr Clement Chen Yongxi of the Faculty of Law was an MPhil student during SARS. In 2002, he had witnessed the drafting of a new freedom of information regulation for Guangzhou – the first of its kind in China – and he was dismayed that it failed to make the municipal government more transparent about the SARS outbreak. 

     The situation prompted his research interest in the gap between law on paper and law in action, and to observe: “What happened with SARS is closely related to what is happening now.” 

     As in Guangzhou, the central government had ostensibly improved freedom of information with the 2007 introduction of the Regulation on Open Government Information (ROGI) which, ironically, was partly motivated by SARS and other cover-ups. But this failed to ensure prompt reporting about COVID-19. Whistleblowing doctors in Wuhan felt compelled to go to social media about the threat rather than official channels such as news agencies, and they were summoned and disciplined by the police for their efforts. 

     So why haven’t the lessons been learned? Dr Chen’s research over the past 12 years sheds light on the flaws – and progress – of information control on the Mainland.

No right to monitor government 

Dr Chen said the ROGI was initially considered a positive step because for the first time in Chinese history, citizens had the right to demand information from their government. But two critical defects have limited its impact. One is that it conflicts with other laws which restrict disclosure of information and prevail over ROGI. The other is that it contains a wide scope of exemptions, including disallowing the disclosure of information that ‘endangers social stability’, which is not defined. This gives government agencies wide discretion to interpret things as they see fit. 

     The judicial response to the government’s denial of access to information has been cautious. Courts examine closely the motive of the applicant, but subject agency claims to various degrees of scrutiny. As a result, they support information requests relating to the applicant’s personal interests, such as their property rights, but refrain from enforcing ‘watchdog requests’ concerning government accountability or the common good. 

     “Some judges have even claimed that the right to information under ROGI does not amount to the right of monitoring the government. This is a bit ironic because the nature of freedom of information laws almost around the world is as an instrument to support democracy and allow citizens to monitor government operations,” he said. “This partly explains why, after 17 years, ROGI doesn’t prevent a public emergency similar to SARS from being covered up.”  Click here to read the full text. 

Marcelo Thompson & Zhang Xin on Justice & Social Credit (working paper)

"Justice & Social Credit"
Marcelo Thompson & Zhang Xin

Abstract: China’s Social Credit System (SCS) has been characterized as embodying a new, reputation or trust-based paradigm of State authority, said to defy the ideal of the rule-of-law. This paper contests such a view, explaining the SCS, instead, as a response to justice concerns typical of liberal societies in conditions of high modernity. Such concerns spring from the exponentially increasing articulation of identity attributes under circumstances of dominance and lack of trust. To address these, the SCS institutionally reconfigures an important conceptual relationship — that between trust, identity, and the law — which, far from new, is found at the roots of modern societies.  Click here to download the full paper.

Clement Chen on China's Social Credit System and fajia (Legalism) (Verfassungsblog)

"A Déjà Vu? The Social Credit System and fajia (Legalism)"

Clement Yongxi Chen

Verfassungsblog

28 June 2019

With its resort to data technologies, powerful enforcement machinery, and proclaimed goal of morality enhancement, the Social Credit System (SCS) emerges as a novelty. It captures the imagination of algorithms and a refreshed fear, or hope, of social engineering. The SCS differs from China’s existing mode of governance that operates primarily through a formal legal system. Early investigations of the impact of the differences share a preoccupation with technology.1)The philosophical dimensions of those differences await exploration,2) which this series of online debate timely addresses. While it is certainly beneficial to contrast the SCS to emerging governance mechanisms in the West or principles of civil liberties, it is equally important to connect it to traditional Chinese thought which may have influenced the policy-makers. In view of the tendency of associating the SCS with Confucianism, this blog post concentrates on fajia (legalism), a traditional school of political and legal thought that had shaped the mode of governance in imperial China. Given the intricacy of Legalism, discussions here would be unsatisfactorily sketchy, leaving questions to elaborate in a full-length paper. It is nevertheless worth taking this inward and retrospective approach to highlight problems in the SCS that may be overlooked under a futuristic and de-contextualised perspective.

     Data technologies do not necessarily revolutionise the regulation of behaviours. They can also facilitate the realisation of aspirations for social control that are encapsulated by Legalism. As a major rival to Confucianism, Legalism advocates radical state control of the society and the primacy of criminal law as a means for upholding autocratic order. In addition to being the ideology in Qin (initially the strongest state in the Warring States period [cir. 500 – 221 BC] which became the first unitary dynasty [221 – 207 BC])), Legalism had guided and sustained the operation of legal systems throughout the two-thousand-year-old dynastic era,3) but also has remained a source of inspiration for revolutionists who wished to wield state powers to forge a social order in line with their respective ideals. Meanwhile, Legalism has been widely criticised in ancient and modern time because of the repressive and manipulative consequences of its measures. If ‘dystopian’ implies a categorical disregard of individuals’ core interests in pursuit of the ideals of a collectivity, Legalists can be regarded as embracing a dystopia, though their thoughts are indigenous. Insofar as there is a close affinity between core features of the SCS and Legalist tenets, as will be analysed below, the system is more like a déjà vu than a futuristic sue genesis... Click here to read the full post.

Clement Chen & Anne Cheung on The Transparent Self under Big Data Profiling: Privacy and Chinese Legislation on the Social Credit System (Journal of Comparative Law)

"The Transparent Self under Big Data Profiling: Privacy and Chinese Legislation on the Social Credit System"

Yongxi Chen & Anne Cheung
The Journal of Comparative Law
published in Feb 2018
Volume 12, Issue 2, pp. 356-378

Introduction: Big data is one of the buzz phrases of the 21st century, concerning not only the digitalisation of data on billions of individuals, but also what those in power are able to do with that data.  The defining characteristic of big data is the capacity to search, aggregate and cross-reference large datasets for analysis to identify previously undetectable patterns, as well as the power to profile individuals, calculate risks, and monitor and even predict behaviour.  When big data is harvested by governments, the worry is that the totality of individuals' lives will be captured, that citizens will be monitored and that the Orwellian state will become a reality.
     In China, such a worry seems far from unfounded given the Chinese Communist Party's (CCP) roll-out of its powerful Social Credit System (SCS).  Launched at the national level in 2014, the system's aim is to assess the trustworthiness of Chinese citizens in keeping their promises and complying with legal rules, moral norms, and professional and ethical standards.  It is essentially an all-encompassing, penetrative system of personal data processing, manifested by the comprehensive collection and expansive use of personal data with the explicit intention on the Chinese government's part of harnessing the ambition and power of big data technology.  The SCS rates both business entities and individuals.  According to its blueprint, the records that are collected can be extensively used by the authorities and business entities alike for a variety of purposes broadly related to 'encouraging trustworthiness and punishing untrustworthiness'.
     Whilst the use of big data analytics in the context of credit scoring and the rating of individuals is not unique to China, in other jurisdictions it is usually confined to the financial arena and regulated by law.  What differentiates China is the scale of the data collected, the scope of its use and, particularly important for the purposes of this article, the apparent lack of a comprehensive legal system to protect personal data.  Despite the introduction of the Cyber Security Law in 2016 in relation to online data, the extension of civil law protection to consumer data in 2013, and the criminalisation of the unlawful gathering, receipt and sale of personal data in 2009, personal data as a general subject has yet to be clearly defined and effectively protected under Chinese law.   The rights that data subjects are entitled to under a personal data protection regime are rarely mentioned in China and are, at best, provided for under scattered sector-specific laws.
     Given the inadequate protection afforded to personal data in China, the country is an ideal social laboratory for big data experimentation, data intelligence and mass surveillance.  Individuals risk being reduced to transparent selves before the state in this uneven battle.  They are uncertain about what contributes to their social credit scores, how those scores are combined with the state system and how their data is interpreted and used.  In short, the big data-driven SCS is confronting Chinese citizens with major challenges to their privacy and personal data.
     Although the State Council's Planning Outline for the Construction of the Social Credit System ('SCS Outline' hereafter) sketches out an ambitious blueprint, it is the pilot legislation implemented at the local level since 2014 that has institutionalised the collection and use of social credit-related data.  To analyse China's emerging SCS under existing international legal principles concerning personal data protection, this article identifies and compares typical examples of relevant legislation at the local level and discusses their implications for personal data protection.  It argues that existing legislation and proposed regulations require substantial revisions to mitigate the impact of the SCS on data privacy and other interests critical to individual citizens.
     The article begins by mapping out the background to the construction of China's big data social laboratory and the SCS.  The next section examines the system's social management aim and comprehensive sanction system, as well as its nature as a collaborate project between the authorities and the business sector.  The section which follows then summarises the legislative history and evolving concept of social credit and analyses the nature of individuals' rights to personal data protection under China's uncoordinated legal framework.  The article then reviews local social credit legislation with reference to the three cardinal principles of personal data protection most closely related to data subjects' control over the processing of their data: firstly, the data collection principle,;secondly, the data usage principle, and thirdly, data subjects' right to access and correct their own data.  The final section concludes that although local legislation provides nominal rights of access to, and a few restrictions on, the collection and use of data, it has largely failed to secure meaningful control over personal data for individuals.  These legislative defects relate to the very purpose of the SCS and to extra-legal restrictions inherited from the pre-reform party-state regime.