الملكية الفكرية والصناعيةسنة 2026مجلة المفكرOpen Access · وصول حر

The legal frameworks of intellectual investment: Reality and challenges, a study of the Chinese and European experiences

H
Hadjab, Ali
جامعة محمد خيضر - بسكرة. كلية الحقوق والعلوم السياسيةصفحة 91-12013 أقسام مفهرسة

ملخص البحث الأكاديمي (Abstract)

Abstract This article aims to elucidate the various legal frameworks for intellectual investment through the organization, protection, and investment in rights arising from intellectual property focused on intellectual creations and innovations and their economic utilisation. It examines the reality of this modern and rapidly evolving phenomenon from a legal perspective, highlighting the various challenges it faces, especially in the era of artificial intelligence, and the legal issues it raises, which requires throughout study and research. Moreover, the fundamental differences in legal frameworks between China and the European Union prompt us to examine both cases, where China reflects a model based on centralized strategic planning, while Europe adopts an approach based on coordination between national laws and the unified legislation of the European Union. Résumé Cet article vise à élucider les divers cadres juridiques pour l'investissement intellectuel à travers la régulation, la protection et celui dans les droits découlant de la propriété intellectuelle, en se concentrant sur les créations et les innovations, ainsi que leur utilisation économique. Il examine la réalité de ce phénomène moderne et en évolution rapide d'un point de vue juridique, en soulignant les divers défis auxquels il est confronté, notamment à l'ère de l'intelligence artificielle, et les questions juridiques qu'il soulève qui nécessitent des études et des recherches. De plus, les différences fondamentales dans les cadres juridiques entre la Chine et l'Union européenne nous incitent à examiner les deux cas, où la Chine reflète un modèle de la planification stratégique centrale, tandis que l'Europe adopte une approche de la coordination entre les lois nationales et la législation unifiée de l'Union européenne.

توليد التوثيق الأكاديمي للبحث (Citation):

Hadjab, Ali، "The legal frameworks of intellectual investment: Reality and challenges, a study of the Chinese and European experiences"، مجلة المفكر، مجلد 21، عدد 1، ص ص 91-120.

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The legal frameworks of intellectual investment: Reality and challenges, a study of the Chinese and European experiences. HADJAB Ali1, LAOUAR Badra2 1Mohamed Khaider University of Biskra, Algeria, Laboratory: Rights and Freedoms in Comparative Systems, Faculty of Law and Political Science, [email protected] 2Mohamed Khaider University of Biskra, Algeria, Laboratory: Rights and Freedoms in Comparative Systems, Faculty of Law and Political Science, [email protected] Received: 28/04/2026 Accepted:08/04/2026 Published:10/06/2026 Abstract: This article aims to elucidate the various legal frameworks for intellectual investment through the organization, protection, and investment in rights arising from intellectual property focused on intellectual creations and innovations and their economic utilisation. It examines the reality of this modern and rapidly evolving phenomenon from a legal perspective, highlighting the various challenges it faces, especially in the era of artificial intelligence and the legal issues it raises which requires throughout study and research. Moreover, the fundamental differences in legal frameworks between China and the European Union prompt us to examine both cases, where China reflects a model based on centralized strategic planning, while Europe adopts an approach based on coordination between national laws and the unified legislation of the European Union. Keywords: intellectual investment, intellectual property, artificial intelligence, Chinese experience, European experience. Corresponding author PhD Student: HADJAB Ali, e-mail: [email protected]. 91

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The global economy is undergoing a fundamental transformation from reliance on tangibal resources to a knowledge-based economy, where ideas, innovations, and intellectual creations have become the primary drivers of economic growth and wealth creation. This transition has led to the emergence of the term "intellectual investment", which goes beyond traditional investment in tangible assets to encompass intangible capital such as intellectual property rights, data, and innovation. The recognition of the economic significance of these assets has posed a challenge to existing legal systems, which were originally designed to protect physical property, necessitating a comprehensive review of the rules and legal frameworks governing investment. As pioneering models in this field, both China and the European Union have witnessed remarkable developments in building legal frameworks to protect intellectual investment. However, practical reality reveals multiple challenges related to implementation, international harmonisation, and adaptation to modern technological innovations. The study of legal frameworks governing intellectual investment is gaining increasing importance in light of the shift towards a knowledge-based economy, where intellectual property has become one of the most important assets for companies and nations, serving as a key driver of innovation and economic growth. Moreover, providing effective legal protection for intellectual investment enhances innovation, attracts investments, and supports sustainable development. This study aims to achieve a set of fundamental objectives that reflect the significance of this field in fostering innovation and economic development, ensuring a balance between protecting investors' rights and the public interest, as well as examining the success of the two leading experiences in this area, those of China and the European Union. In this research, we relied on the descriptive method by describing various legal phenomena related to the subject of the study, the analytical method through analysing certain provisions of international treaties and conventions, particularly, the newly introduced ones, next to some doctrinal 92

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opinions concerning the phenomenon of intellectual investment, along with the comparative method which was occasionally employed , to compare the Chinese and European experiences. Achieving this desired balance prompts us to raise the research issue centred around the challenges imposed by the reality of intellectual investment law confronting existing legislative systems, in light of unprecedented technological development. And how effective are the Chinese and European experiences as major technological powers? To address this issue, we adopted a research plan composed of two main axes; the first was dedicated to the general framework of legal rules governing intellectual investment, while the second focused on studying the Chinese and European experiences in developing intellectual investment. Axis One: The General Framework of Legal Rules Governing Intellectual Investment First: The concept of intellectual investment

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creativity, innovation, and knowledge." 2 Definition of intellectual property Intellectual property is the product of human mind, encompassing creations such as patents, utility models, industrial designs, industrial or commercial trademarks, service marks, trade names, source data, or designations of origin, as well as the suppression of unfair competition. (Paris Convention for the Protection of Industrial Property, as amended and supplemented, 1983) .Intellectual property rights, like other property rights, grant the owner the ability to benefit from their work in various means derived from an idea that has developed into a product. The owner is also entitled to prevent others from using their right without prior authorization and to take legal action in case of infringement, claiming compensation for the damages incurred.

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representes a critical instrument for national economic resilience and securing a sustainable competitive advantage on the global arena. Countries that fail to prioritise the protection and investment in intellectual output risk marginalization behind in the global knowledge race. (Yamina, 2011 / 2012) . 4 The importance of intellectual investment from an economic perspective The economic importance of intellectual investment is manifested in the fact that knowledge capital, encompassing science, technology, and innovation, has become more significant in the new economy compared to physical capital. Intellectual property is the backbown of the knowledge and technology based economy and serves as a driving force for progress and advancement across cultural, social, and economic fields. It encourages innovation, fuels the funding of other innovations, and contributes to economic, social, and cultural development. Intangible assets including intellectual property rights, that are considered hidden gems that support knowledge-based global economies and enhance innovation, productivity, and economic growth. (Yamina, 2011 / 2012) . This shift in understanding "investment" requires modern legal frameworks to explicitly and robustly integrate intangible assets and intellectual property as essential components, rather than merely supplementary rights, to ensure the stimulation and protection of investments in intellectual capital, which are often more challenging to measure and manage than traditional physical assets. (World Intellectual Property Organisation (WIPO)). Secondly: The geopolitical dimensions of intellectual investment 95

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multiple regulations, including national laws and regional regulations such as those in the European Union, as well as international treaties. 1 The international dimension of intellectual investment 1-1 International agreements and treaties The international legal nature of intellectual investment forms a complex network of agreements and treaties designed to harmonize unifying protection standards and facilitating cross-border trade and investment. Among the most prominent of these agreements: 1-1-1 Basic international agreements and treaties (TRIPS Agreement, WIPO treaties) o Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS): The TRIPS Agreement was established in 1995 as part of the World Trade Organisation (WTO) and represents an important step towards the globalisation of intellectual property rights. The agreement sets the minimum standards for intellectual property protection in areas such as copyright, patents, trademarks, and trade secrets, and the TRIPS Agreement incorporates the Paris Convention for the Protection of Industrial Property and the Berne Convention for the Protection of Literary and Artistic Works by reference. The agreement ensures equal opportunities in the field of intellectual property protection, thereby facilitating global trade and investment It also contains provisions concerning the enforcement of intellectual property rights and the settlement of disputes. The TRIPS Agreement is widely regarded as the principal global foundation for intellectual property protection, making it a decisive factor for international intellectual investment. 96

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Its inclusion of enforcement and dispute resolution mechanisms directly affects investor confidence by providing a framework for compensation. The minimum standards set by TRIPS compel World Trade Organisation member states to implement a certain level of intellectual property protection, which in turn reduces risks for international intellectual investors and encourages cross-border investment in intellectual property- intensive industries. (International Academy for Mediation and Arbitration IAMA, 2025) .  WIPO Treaties: The World Intellectual Property Organisation (WIPO) administers several key treaties that constitute the international intellectual property system. These treaties include: - Paris Convention for the Protection of Industrial Property (1883): It protects industrial property rights (patents, trademarks, industrial designs and models). - The Berne Convention for the Protection of Literary and Artistic Works (1886): It protects copyright. - Agreement and Protocol of Madrid (1891/1989): They provide a simplified system for the international registration and management of trademarks. - Patent Cooperation Treaty (PCT) (1970): It provides a global system that facilitates the procedures for filing patent applications. - The Hague System: For the international registration of industrial designs. - The WIPO Copyright Treaty (WCT) (1996) and the WIPO Performances and Phonograms Treaty (WPPT) (1996): They address copyright and neighbouring rights in the digital environment. (Saudi Authority for Intellectual Property, 2024). 97

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treaties ensure the most complex and multi-layered framework for international governance of intellectual property, with TRIPS setting general standards for World Trade Organisation members. WIPO treaties offer more detailed mechanisms for specific intellectual property rights, such as the Patent Cooperation Treaty (PCT) and the Madrid System for trademarks. This enables intellectual investors to navigate abroad landscape of international rules, where compliance with TRIPS is fundamental, but engaging with WIPO systems offers practical advantages in terms of cross-border protection and management. (International Academy for Mediation and Arbitration IAMA, 2025) . The ongoing evolution of WIPO treaties, such as the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, which address the digital age, reflects the ongoing effort to adapt international intellectual property law to technological developments, directly impacting the legal security of intellectual investments in modern technologies. International agreements such as TRIPS establish disciplined and graduated procedures for dispute resolution, starting with consultations and ending with arbitration within a clearly defined timeframe. (Zalam & Badanjaki, 2023) . 1-1-2 The role of international organisations in developing and protecting intellectual investment International organisations play a crucial role in shaping and enhancing the legal framework for intellectual investment on an international level. The World Intellectual Property Organisation (WIPO) plays a leading role in this regard, serving as a global forum for intellectual property policy, services, information, and cooperation. Its main mission is to support innovators and creators worldwide, ensuring the safe transition of their ideas to the market and contribute to improving people's lives. It also aims to develop a balanced and effective global ecosystem for intellectual property that fosters innovation and creativity for a better and more sustainable future. (World Intellectual Property Organisation (WIPO)). 98

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What WIPO offers: WIPO provides wide range services, the most important of which are: • Providing training and legal and technical assistance to developing countries. • Facilitating international registration systems for patents "Patent Cooperation Treaty," trademarks "Madrid System," and industrial designs "Hague System" (Saudi Authority for Intellectual Property, 2024) . • Promoting awareness and respect for intellectual property. • Supporting national intellectual property strategies and policies. • Participating in discussions on intellectual property and emerging topics such as intangible assets, artificial intelligence, and sustainable development. • Collaborating with national judicial bodies to enhance the settlement of intellectual property disputes. • Providing information and databases on patents, trademarks, industrial designs, geographical indications, and plant varieties. (World Intellectual Property Organisation (WIPO)) . WIPO also plays a dual role as a standard-setter and capacity-builder; it not only administers international treaties and registration systems but also provides training and legal and technical assistance, especially to developing countries. This dual role is vital for enhancing global intellectual investment. Without these enhancements, many countries would struggle to implement and enforce international standards, resulting in an uneven investment landscape. WIPO's efforts in promoting national intellectual property strategies and supporting judicial bodies are essential for translating international standards into effective local protection, which is a prerequisite for attracting and securing intellectual investment. (Taha & Fawziya, 2022). 99

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engagement with "frontier technologies" (Samer, 2021) ) and its discussions on intellectual property and artificial intelligence, which are of great significance. Rapid technological developments such as artificial intelligence and blockchain continuously challenge existing intellectual property legal frameworks, necessitating proactive addressing of these issues. The increasing recognition of the role of intellectual property beyond mere legal protection, and its connection to broader societal and economic development goals, indicates that intellectual investment is increasingly viewed from the perspective of social and environmental impact, not just financial return. (Dahmani, 2023) .

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The prominent local regulations include the registration of intellectual property rights, enforcement through legal actions against infringement, and the use of alternative dispute resolution mechanisms. There is also a focus on raising awareness of intellectual property and building human capacity within the intellectual property system. (Zalam & Badanjaki, 2023) The ongoing shift towards centralised intellectual property governance at the national level and the simplification of intellectual property aims to enhance efficiency in policy-making, registration, enforcement, and international representation in a way that reduces bureaucratic obstacles and provides a more cohesive framework for intellectual investors. (Shaaban, Mahtab, Abdel Jawad Mohamed, Abdullah Abouzeid, & Ali Daif, 2023) . The effectiveness of legal protection for intellectual property assets goes beyond merely enacting laws; it requires strong judicial systems, political stability, and good governance with specialised intellectual property courts or alternative dispute resolution mechanisms for fair and swift resolution of intellectual property disputes, which directly impacts investor confidence. Without the elements of legislative, judicial, and political stability, in addition to good governance, there is no stable and attractive investment environment for intellectual property assets. (World Intellectual Property Organisation (WIPO)) . Third: The current challenges in facing intellectual investment Intellectual investment faces many current legal challenges, especially in light of intellectual globalisation (Amina, 2025) and rapid technological developments.

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smart contracts, where legislation must develop strategies to mitigate risks and establish clear systems to handle these new legal environments. (Marah & Taalib, 2022) . 2 Challenges of artificial intelligence Artificial intelligence poses a challenge to traditional concepts of intellectual property related to "authorship" and "invention", as AI systems can independently produce creative works or inventions. This raises several issues regarding whether AI can be considered an author or inventor, or if there is a need for new legal adaptations for works generated by AI. (Hayes & Downey, 2024) .

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balance between protecting rights and encouraging innovation. (Saudi Data and Artificial Intelligence Authority (SDAIA), n.d.) . The second axis: The Chinese and European experience in developing intellectual investment We have decided, through this research, to shed light on two of the most important experiences in the field of intellectual investment in two different environments: studying the distinguished Chinese experience as it belongs to the developing countries and the European Union experience as it is a leading bloc in this field and a model to be followed in the advanced side of the world, through the following. First: The Chinese experience The Chinese experience in organising intellectual investment is manifested in the shift from a production-orientated policy to focusing on innovation and protecting intellectual property, with the aim of attracting foreign investments and enhancing its global competitiveness.

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Patent Law, which requires an element of innovation, a high technical level, and suitability for industrial and commercial use. China has witnessed four major amendments to the Patent Law, the latest of which was in 2020 and came into effect in 2021, with regulatory updates in 2024. The recent amendments included strengthening protection (such as punitive damages for serious violations), extending the duration of design patents, partial protection for designs, and facilitating open licensing procedures, in addition to new mechanisms for linking drug patents and stimulating innovation in vital sectors. (PMC Search Update, 2022) . 1-3 Patent Law Regarding specific intellectual property laws, China issued the Patent Law, which requires an element of innovation, a high technical level, and suitability for industrial and commercial use. China has witnessed four major amendments to the Patent Law, the latest of which was in 2020 and came into effect in 2021, with regulatory updates in 2024. The recent amendments included strengthening protection (such as punitive damages for serious violations), extending the duration of design patents, partial protection for designs, and facilitating open licensing procedures, in addition to new mechanisms for linking drug patents and stimulating innovation in vital sectors .(YU & YIP, 2024) 1-4 Trademark law The Chinese Trademark Law has seen significant developments over the past few decades, with frequent amendments, most notably the 2014 and

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The recent amendments introduced clearer standards to combat "bad- faith trademark registrations", but they are still less stringent compared to European regulations. Meanwhile, there is a Chinese intention and direction towards "internationalising" the law to align with international agreements such as the TRIPS Agreement. (Chen & Liu, 2020) . 1-5 Copyright Law This law has undergone significant development since the late 20th century, especially following China's economic liberalization in the 1980s. The first modern copyright law was enacted in 1990 and has been amended several times to keep pace with technological and social developments, the latest being the third amendment that came into effect in June 2021. This latest amendment expanded the scope of protection to include digital works, clarified the concept of originality, broadened authors' rights, and introduced improvements in collective rights management and means of protection against digital infringements. (Zhou, 1991-1997). This law distinguished between moral rights (such as the right of attribution for the author) and economic rights (such as the right of commercial exploitation), however, challenges remain in reconciling this two dimensions , especially with the development of the internet. The Chinese system also differs from Western systems, as it reflects China's cultural and social background and aims to achieve a balance between protecting authors' rights and encouraging creativity in the public interest. Recent amendments have also addressed contemporary issues such as works produced by artificial intelligence, but there is still ambiguity regarding how to legally protect these works. (YUE, 2023) . In general, the development of copyright law in China reflects the desire to join the international system while considering national privacy.

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Administration (CNIPA) for patents, trademarks, and industrial designs, and through the Chinese Copyright Office for copyright. (WIPO, 2022). Specialised intellectual property courts are also considered the cornerstone of China's enforcement strategy, with the establishment of intellectual property courts in Beijing, Guangzhou, and Shanghai since 2014. (Xinhua News Agency, 2025) .The establishment of an intellectual property court within the Supreme People's Court in 2019 has been credited with providing a national-level appeal mechanism for intellectual property cases. This specialised judicial system aims to enhance efficiency and reduce costs for intellectual property protection. (China Network, 2025) . China adopts proactive measures to protect intellectual property and resolve disputes, having achieved notable improvements in the efficiency of the patent examination process, making it one of the most efficient in the world. The review time was reduced to just 16 months last year, with a goal to reduce it to 15 months by 2025. The National Intellectual Property Development Plan until 2035 also emphasises the establishment of centres that provide effective services to institutions, such as patent review, verification, and protection, to address challenges in obtaining evidence and reducing time and cost. (Xinhua News Agency, 2025) . The establishment of the National Guidance Centre to handle intellectual property disputes abroad highlights China's proactive stance in assisting its companies facing intellectual property challenges overseas, reflecting an increasing maturity in its intellectual property strategy. (Yang, 2022) .

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3-1 Historical Backgrounds in the Face of Intellectual Property Protection Despite aligning with international standards, China's intellectual property system faces historical backgrounds regarding weak enforcement of intellectual property rights, which have led to international disputes and concerns. However, significant improvements in intellectual property protection, as evidenced by the increase in foreign patent and trademark applications and positive evaluations from entities such as the European Union Chamber of Commerce in China, indicate a gap between the previous reputation and the current reality. In 2021, the number of patent applications filed by foreigners in China reached 110,000, a 23% annual increase, while 194,000 trademarks were registered, a 55.2% increase. (Yang, 2022) This suggests that while challenges remain, China is making substantial progress in this area. 3-2 Balancing national security and openness to foreign investment China faces the challenge of balancing the promotion of foreign investment with national security concerns, which is particularly evident in the "negative list" approach to investment. The Foreign Investment Law allows for the review of any foreign investment that poses a threat to national security, affects the defence sector, public health, ethics and societal values, any strategic sector of the state, or foreign policy. (Zhang S. , 2022) This balance is crucial for China to manage potential risks while maintaining an attractive investment environment, but it can create uncertainty for foreign investors. 3-3 Data protection and transfer The Personal Information Protection Law (PIPL) in China imposes strict rules on the processing of personal data and cross-border data transfers. In addition to protecting individuals' privacy, it aims to impose significant compliance challenges on foreign companies operating or investing in China. (Zhang J.-C. , 2021) which may affect data-intensive intellectual property assets. Fines for non-compliance can reach 50 million 107

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Technology Company) Secondly: The European experience The experience of the European Union in developing the legal framework for intellectual investment is considered an advanced model characterised by a focus on coordination and unification among member states, with special attention given to data protection and digital innovations.

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making it easier for organizations to understand and comply with the law and reducing legal complexities when operating in multiple EU member states. (EUROPIAN COMMISSION, n.d.) . National legislation in member states aligns with the European Union's directives, as provisions of EU laws are often incorporated into local laws. For example, we find many references to the French Intellectual Property Code and its unified version effective from February 17, 2024, which reflects legislative developments over many years. (World Intellectual Property Organisation (WIPO))

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further reinforced by landmark rulings from various courts in European countries such as Germany, France, and Poland. (Unified Patent Court, 2025) . 4 European artificial intelligence law The European AI Act, which was adopted in June 2024, marks a milestone in global legislation, as it is the first comprehensive legal framework dedicated to regulating artificial intelligence systems worldwide. (Nadhif, 2025) This law, numbered (EU) 2024/1689, aims to achieve a precise and pivotal balance between protecting individuals' fundamental rights and ensuring their health and security, on one hand, and promoting technological innovation and the European Union's economic leadership in the safe AI sector, on the other hand. (Gasser, 2023) . The inactment of this law came in response to the accelerating challenges posed by artificial intelligence applications, from risks of bias and lack of transparency to issues of privacy and cybersecurity, while simultaneously acknowledging the immense capabilities of this technology in driving progress in vital sectors such as medicine, transportation, and industry. (Olimid, Georgescu, & Olimid, 2024). Far from being a mere set of regulatory and procedural rules, this Act aspires to consolidate the European Union’s position as a global leader and model in AI governance. To achieve this challenge, the law provides a systematic and rigorous risk based framework, ensuring that regulatory oversight is directly proportional to the potential level of risk posed by any AI system. (REN & DU, 2024) . Third: The European-Chinese relationship in the field of intellectual investment Relations between Europe and China in the field of investment in general and investment in intellectual property and knowledge in particular 110

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have witnessed significant development in recent years, marked with increasing Chinese investments in Europe and mutual interest in enhancing cooperation and innovation. However, these relations remain influenced by a set of institutional, political, and economic factors, especially those concerning intellectual property protection and geopolitical considerations. (Hanemann & Huotari, 2018)

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The development of intellectual investment is determined, not only by legal texts, but also by the ability to harmonize its governing systems and to build judicial systems based on trust and cooperation in a world increasingly competing for intangible assets. While China strives to consolidate its position as a leading innovative power, and the European Union struggles to translate its legal strength into tangible economic growth, building a comprehensive ground conducive to intellectual investment remains a shared challenge that requires genuine and tangible political will and international coordination.  Results  Developing and updating effective and balanced legal rules for intellectual property law is essential to enhance innovation and attract investment, while addressing challenges related to enforcement, legislative variation, and achieving a balance between protecting investors and the public interest.  Technological globalisation imposes a comprehensive nature on intellectual investment law, necessitating that various national and international legislations adhere to a unified global legal approach while considering and balancing it with the uniqueness of different societies.  The geopolitical nature of intellectual investment, as it transcends mere legal rules to become a pivotal geopolitical and economic issue, is where the Chinese and European actors seek to develop innovation by protecting rights and providing an effective and non- fragmented marketing environment, supported by strong political will.  Despite China's emergence as a global innovative power in building an advanced legal system for intellectual property, driven by massive government investment in research, development, and education, it still faces the challenge of establishing trust among foreign investors due to historical backgrounds and enforcement challenges.  The European paradox lies in the fact that the European Union possesses a well-established and reliable legal system that is 112

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considered a global model to be emulated, yet it suffers from structural challenges, most notably bureaucracy and the fragmentation of the capital market, which hinders its ability to translate its legal strength into tangible intellectual economic growth.  Recommendations  National and international legislation must update and develop the legal framework to keep pace with the rapid evolution of intellectual property law, regulating, protecting, and encouraging investment in this context.  China and the European Union must enhance international cooperation to combat piracy and counterfeiting and benefit from various mechanisms such as bilateral trade agreements that have proven effective.  International institutions active in the field of intellectual investment, such as WIPO, should continue their coordinating role and provide platforms for the exchange of expertise and data.  Regionally, capital market reforms should be accelerated and regulatory rules effectively unified to ensure that Europe's abundant revenues are directed towards investing in intellectual assets instead of remaining trapped in national banks. It is also advisable to reduce bureaucracy and simplify investment procedures to enhance the attractiveness of the European market for startups.  It is advised that China continue its efforts to enhance transparency in the judicial system and implement effective and consistent compensation mechanisms, especially in cases of trade secrets, to build trust among foreign investors.  Investors in this field should plan proactively when entering the Chinese market, such as early registration of trademarks and patents and working with specialised local lawyers. 113

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