China Briefing The Practical Application of China Business
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Dezan Shira & Associates is a specialist foreign direct Investment practice, providing business advisory, tax, accounting, payroll and due diligence services to multinationals investing in China, Hong Kong, India and Vietnam. Established in 1992, the firm is a leading regional practice in Asia with seventeen offices in four jurisdictions, employing over 170 business advisory and tax professionals. We also provide useful business information through our media and publishing house, Asia Briefing.
Chris Devonshire-Ellis Andy Scott Sam Woollard Editors
Intellectual Property Rights in China Second Edition
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Editors Chris Devonshire-Ellis Andy Scott Sam Woollard Dezan Shira & Associates Asia Briefing Ltd. Unit 1618, 16/F., Miramar Tower, 132 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong, People’s Republic of China e-mail:
[email protected]
ISSN 2191-0634
e-ISSN 2191-0642
ISBN 978-3-642-15407-2
e-ISBN 978-3-642-15408-9
DOI 10.1007/978-3-642-15408-9 Springer Heidelberg Dordrecht London New York Published by Springer-Verlag Berlin Heidelberg 2011 Ó Asia Briefing Ltd. 2008, 2011 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer. Violations are liable to prosecution under the German Copyright Law. The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Cover design: eStudio Calamar, Berlin/Figueres Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com)
About China Briefing’s China Business Guides
Thank you for buying this book. China Briefing’s publications are designed to fill a niche in the provision of information about business law and tax in China. Produced by the foreign direct investment practice Dezan Shira & Associates, when we decided, several years ago to commence this series, we did so in the knowledge that much of such intelligence regarding China was expensive, or contradictory. Much also did not adequately address the real on the ground issues faced by multinational businessmen—the practical knowledge that must be part of the armory of any business dealings in emerging markets. China Briefing is designed to deal with this gap and is aimed at providing both the regulatory background as well as detailed information concerning China business with a firm eye on the practicalities of turning a profit and remaining in compliance on the mainland. Accordingly, we have made this guide informative, easy to read and inexpensive. To do so, we have engaged not just a team of journalists, but in many cases, Dezan Shira & Associates’ own team of legal and tax experts in their related fields. For this book however, the text has been graciously provided by Austria Wirtschaftsservice (aws), an agency of the Austrian government that specializes in evaluating and providing for technological inventions. In China, they support their clients with patent work, IP support and protection services. We thank them for their assistance with this work. This first edition of this book was compiled and written by Verena Nowotny and edited by Andy Scott. The second edition of this guide was updated by Monika Vuong, Alex Blauensteiner and Georg Buchtela, and edited by Eunice Ku, Teja Yenamandra and Shelly Zhao; the cover design was by Chris Wei; and the layout was by Chris Wei and Becky Jian. At China Briefing, our motto is ‘‘The practical application of China business,’’ we hope that you feel we have accomplished this within these pages. Asia Briefing Publications Hong Kong
Contents
An Introduction to IPR in China . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
IPR Laws in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
IPR Registration in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
Trade Fairs and Exhibitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
Protecting Your IPR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
Enforcement of IPR in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43
Glossary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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An Introduction to IPR in China
One of the first experiences a visitor to China may have is a friendly and eager invitation by a Chinese vendor to follow them to their stand in order to buy watches, bags, DVDs or other items for a fraction of the amount one would pay in Europe or the United States. Although in recent years the Chinese government has undertaken massive efforts to launch campaigns against counterfeiters and tried to create awareness that the theft of intellectual property rights actually is a crime, fake products are still ubiquitous in China. Statistics give an impression of the dimension of the business of counterfeiting in China: seven in ten European companies doing business in China say they have been victims of IPR theft. In 2006, European manufacturers estimated that IPR infringements cost them one dollar in every five they made in China. More than half of all the goods seized by EU customs come from China. Counterfeiting is not restricted to luxury goods or famous brands; it takes place in all industry areas and includes day-to-day products. Experts estimate that 10% of world trade is based on fakes. A 2010 report predicts job losses due to piracy to reach as high as 1.2 million and €240 billion in lost retail revenue by 2015 for the European Union.1 China is the second largest economy in the world, offering attractive business opportunities and a huge potential market. However, as in all developing economies, and China being a developing country, there are risks involved—the theft or infringement of intellectual property rights being one of them. Being aware of one’s intellectual assets, pursuing a clear strategy on how to use them, and protecting and enforcing them is part of the necessary homework a foreign company doing business in China still has to do. Surveys conducted by national chambers of commerce reveal that companies throughout the United States and Europe do not use existing legal measures to
1
Building a Digital Economy: The Importance of Saving Jobs in the EU Creative Industries, March 2010, Tera Consultants.
C. Devonshire-Ellis et al. (eds.), Intellectual Property Rights in China, China Briefing, DOI: 10.1007/978-3-642-15408-9_1, Ó Asia Briefing Ltd. 2011
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An Introduction to IPR in China
protect and defend their IPR in China. Although the risk of IPR infringement is widely known, a vast majority of companies doing business in the country have not filed their IP rights here, citing high costs as one of the main reasons. Filing for IP rights in China may also be appropriate for companies who are not doing business in China. With the development of China’s export-oriented economy, companies that refrain from operating in China can suffer from infringements as well when encountering their faked products in third markets—exported there by Chinese counterfeiters. On the other hand, foreign companies also need to pay attention to the rising awareness of IPR among Chinese companies that increasingly defend their intellectual property against infringements as well. Since China’s accession to the World Trade Organization and the third revision of the 2008 Chinese Patent Law, the quality of Chinese IP laws has risen to meet international standards. Even though enforcement remains a real problem, it is not impossible to successfully protect IP in China. It may not be an easy task, but successful cases of foreign companies have proven that it is possible to protect and enforce one’s IPR in China.
1 Historical Development of IPR Laws in China Although the current legislation is no older than 25 years, some of the very earliest regulations concerning intellectual property in China date from the end of the nineteenth century. The ‘‘Regulation for the Award and Promotion of Technology Development,’’ one of the first pieces of legislation regarding inventions, was enacted by the Emperor Guangxu in 1889. This regulation offered protection of exclusive rights for specific inventions in the shipping industry. Interesting enough, the legislation also included a grant for the protection of copies of Western technology. This praising and incitement for making good copies is a typical trait of Chinese culture, which might affect the current perception on the infringement of intellectual property. The IPR systems were modernized between 1928 and 1944 by the Kuomintang Republican government. The rise of the Communist Party and the foundation of the People’s Republic of China in 1949 coincided with a dramatic halt in the development of a modern IP set of norms and in particular of a modern patent law. The State automatically acquired economic exploitation rights. In 1963, the concept of collective property of invention’s rights was introduced, giving State units the right to exploit inventions unconditionally. With the political and economic reforms of Deng Xiaoping in the late 1970s, China’s opening of relations with the outside world brought radical reforms to the country’s patent laws. In 1984, a new patent law was enacted. In 1985, China acceded to the Paris Convention for the Protection of Intellectual Property, followed by the accession to the Madrid Trademark Agreement in October 1989. In 1992, China became a party to the Berne Convention for the Protection of Literary and Artistic Work. In 1993, a first revision of the patent law took place, increasing
1 Historical Development of IPR Laws in China
3
the duration of the protection of exclusive rights from 15–20 years for patents and from 5 to 10 years for design patents. In 1994, China acceded to the Patent Cooperation Treaty (PCT). In 2001, there was a further revision of the patent law to adapt to the standards of the Agreement of Trade Related Aspects of Intellectual Property Rights (TRIPS) that was applicable to China at the moment of accession to the WTO. Since that time TRIPS has been binding for China. All these conventions ensure a minimum standard of protection of IP rights. Finally, the third revision of the 2008 Chinese Patent Law came into force in 2009. All reforms of the Chinese IP laws so far have been inspired by Western IP laws. In the patent field especially, Chinese legislators have massively made use of European patent law experiences. China’s accession to the WTO has put IPR high on the agenda of Chinese politicians. In 2009, Chinese courts handled 30,626 IP law cases, 4,422 of which dealt with patent law suits.2 However, the Chinese system still faces problems with the implementation of the written norms. The sometimes inconsistent and unclear court or administrative enforcement practices have led to political reactions by various Western countries, which are threatening to initiate WTO infringement procedures against China for noncompliance with the TRIPS norms. However, it also should be mentioned that China’s own activities in patent applications have risen and will continue to increase in the future. Foreign companies being sued by a Chinese company in China is also not that uncommon anymore.
2 Trends in China’s IPR Environment Reforms of the patent laws took place in 1992 and 2000. In 2005, Chinese experts at the State Intellectual Property Office (SIPO) started working on the third revision of the Patent Law that finally came into force in 2009. The aim of the third revision was improvement in the quality of the patents, protection of national and other public interests as well as the balancing between patent protection and public interests. The major changes affect the patent granting procedure. This includes the absolute novelty standard, the protection of genetic resources meaning that inventions based on genetic resources will not be patentable, and the introduction of compulsory licensing under certain circumstances. Also, the requirement that inventions completed in China have to be filed in China first has been nullified. However, China now requires the patentee to apply for the confidentiality examination before filing abroad. Foreign observers are concerned, however, as the revisions are also designed ‘‘to better balance the interests of patent holders and the public, and to safeguard national interests and economic security.’’ This is usually synonymous for protecting Chinese economic interests.
2
Source: China IP News/SIPO
4
An Introduction to IPR in China Applications of Chinese origin
Applications of foreign origin 100,000
400,000 350,000
80,000
300,000 250,000
60,000
200,000 40,000
150,000 100,000
20,000
50,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 Innovation
Utility Model
Design patent
0 1997 1998 1999 2000 2001 2002 2003 2004 2005 Innovation
Utility Model
Design patent
Fig. 1.1 Domestic vs. foreign Chinese patent filings (applications) Source: The Present and Future State of Innovation in China, Thomson Rueters, 2010
The Chinese government openly pursues the strategic aim of building up selfinnovation capabilities and wants to become an innovative country by 2020. ‘‘In 2001, China ranked 28th in 49 major countries in terms of comprehensive scientific and technological innovation capability,’’ said the Minister of Science and Technology, Xu Guanhua, in March 2006. ‘‘We have to move 10 places ahead and enter the ranks of the first 20 before we can say that we have succeeded in achieving our target.’’ The ‘‘Outline of the National Intellectual Property Strategy’’ issued by the State Council in June 2008, clearly states the importance of IPR from the Chinese perspective. ‘‘In the world today, with the development of the knowledge-based economy and economic globalization, intellectual property is increasingly becoming a strategic resource in national development and a core element in international competitiveness, an important force in building an innovative country and the key to hold the initiative in development.’’ (Please see the Appendix for the full text.) Since then, China has been in the fast lane according to the report ‘‘An Assessment of China’s Position and Impact in the Scientific World’’ published by the Institute of Scientific and Technical Information of China (ISTIC) in the first quarter of 2010. China ranks 4th out of 19 countries in national scientific strength and 13th in worldwide scientific influence.3 Both Chinese and foreign entity applications in China have grown substantially during the last years. However, domestic applications grew at a more rapid pace and outnumbered foreign applications by 2003 as shown in Fig. 1 below. Furthermore, margins between domestic and foreign applications have become even wider over the last 4 years.4 However, there was a clear difference in the quality of the patents, as the Chinese applicants often resort to the less strictly examined utility model or design patents for their products. Approximately half of all Chinese patents filed in 2009 were utility models, which are less rigorous, more affordable forms of patents that 3 4
http://opinion.globaltimes.cn/commentary/2010-03/510838.html, accessed March 7th, 2011 The Present and Future State of Innovation in China, Thomson Reuters, 2010
2 Trends in China’s IPR Environment
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provide 10 year of protection (versus 20 years for invention patents). The use of utility model patents in China has grown at a rate of 18 percent per annum since 2001. Utility models are also a potentially valuable strategy for foreign filings in China.5 The goal of the recent revision of China’s Patent Law was to improve the quality of patents. However, the Chinese government will continue to encourage as many patent applications as possible among Chinese enterprises. Furthermore, the Chinese government is well aware that future competitiveness is not only a question of innovation but also of international standards. According to the new IP strategy, the State Council seeks to ‘‘formulate and improve policies related to standards,’’ and ‘‘regulate the process of turning a patent into a standard. Enterprises and industry organizations should be supported in actively participating in the formulation of international standards.’’ The patent offices of the US, Japan, Europe (EPO), South Korea and China account for 75% of all patents filed and 74% of patents granted worldwide. Especially in the areas of telecommunications, semiconductors, pharmaceuticals and computers, Western countries hold between 70 and 90% of all patents. An analysis of patent volumes over the last five years from these five major offices shows that inventions from China have been growing at a faster rate than any other region.6 Comparatively, more than 90% of all Chinese companies have no patent rights at all; about 60% do not even have a trademark. In realizing that the high costs of licenses are impeding competitiveness, the Chinese government is pursuing a policy of technology import. This policy often leads to a certain pressure on foreign companies to allow technology transfers, and thus transfers of valuable knowledge. The most common ways of these involuntary technology transfers take place are through obligatory co-operations in the form of joint ventures or with design institutes, patent registration procedures for pharmaceutical products, the definition of local content, or procedures and obligations in public tenders. Considering the ambitious goals of the Chinese government concerning the improvement of innovation capacity, the new measures regarding technology transfer in conjunction with the third revision of the Patent Law are particularly meaningful. In this competitive environment it is more important than ever for foreign companies to actively manage their intellectual assets and have their intellectual property rights adequately, protected before they enter the Chinese market.
5 6
http://www.whatsonxiamen.com/invest299.html The Present and Future State of Innovation in China, Thomson Rueters, 2010
IPR Laws in China
Since China’s accession to the World Trade Organization in 2001, the country’s laws concerning intellectual property rights have had to come in line with international standards. Recent developments such as the third revision of China’s patent law underline this. Similar to Western countries, the various types of IP rights are defined in the Chinese Patent Law, the Trademark Law, the Copyright Law, and the Law on Unfair Competition. Further regulations and interpretations issued by the Supreme Court aim at clarifying certain questions such as IP rights infringements on the internet.
1 Patents (Inventions, Utility Models, Design) A patent gives the owner the exclusive right, for a limited period, to prevent others from making, using or selling an invention without permission, in return for the inventor telling the public how to carry out the invention. Like other forms of property, a patent right can be bought, sold, rented or hired. Patents are territorial rights: a Chinese patent will only give the patentee rights in China; by the same token a patent for European countries or the United States does not protect one’s patent in China. The Chinese Patent Law of 2008 protects ‘‘inventions’’ (or ‘‘patents’’ in the strict sense or according to the international terminology), utility models and design. The term used by the law when referring to all the three categories together is ‘‘invention–creation.’’ The Chinese Patent Law is inspired by the German Patent Law in particular with respect to the part regarding utility models. Design patents have been included in the law for the practical reason of avoiding the drafting of scattered legislation in the field of IP. ‘‘Inventions’’ are new technical solutions relating to a product, a process or an improvement thereof. This means that any innovation in the field of technology is C. Devonshire-Ellis et al. (eds.), Intellectual Property Rights in China, China Briefing, DOI: 10.1007/978-3-642-15408-9_2, Asia Briefing Ltd. 2011
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IPR Laws in China
patentable. However, it is important that the result of the innovation is something materially perceivable. That is the meaning of the word ‘‘technical.’’ In order to be patented an invention must be novel. Patent rights are granted for a period of 20 years from the date of filing. ‘‘Utility models’’ are new technical solutions related to a product’s shape, structure or a combination thereof, which is fit for practical use. The description clearly indicates that utility models are related to products that can be physically perceived. The law excludes the patentability of utility model for processes and all other material that cannot be classified as products like gases and fluids, biological materials, etc. Utility model rights are granted for a period of 10 years from the date of filing. Utility models are considered the ‘‘little brother’’ of invention patents; it is definitely easier to get approval for a utility model as an in-depth examination is not carried out. A ‘‘design’’ is any new design for a product’s shape, pattern or combination thereof, as well as the color and the shape or pattern of a product, which creates an aesthetic feeling and is fit for industrial application. Like in the case of utility models, a design can be granted only for products. Design rights are granted for a period of 10 years from the date of filing.
2 Trademarks A trademark is any word, phrase, symbol, design, combination of colors, product configuration, group of letters or numbers, or combination of these, used by a company to identify its products or services and distinguish them from the products and services of others. The primary purpose of trade marks is to prevent consumers from becoming confused about the source or origin of a product or service. In practice, fours kinds of trademarks are recognized by the Trademark Law in China: • general trademarks, in which ‘‘trademarks for goods’’ and ‘‘trademarks for services’’ are included • collective marks, signs which are registered in the name of bodies, associations or other organizations to be used by the members thereof in their commercial activities to indicate their membership of the organizations • certification marks, signs which are controlled by organizations capable of supervising some goods or services and used by entities or individual persons outside the organization for their goods or services to certify the origin, material, mode of manufacture quality or other characteristics of the goods or services • well-known trademarks, marks which have a strong reputation among the relevant public in China—where a dispute arises in the procedures of trademark registration and the party concerned believes that its trademark constitutes a well-known trademark, it may request the Trademark Office or the Trademark
2 Trademarks
9
Review and Adjudication Board to determine whether its trademark fulfills the criteria for a well-known trademark. Three-dimensional trademarks were newly added to Trademark Law in 2001 and reflected in Article 8 of the law. In 2009 this Article has been proposed to be changed to the following, ‘‘Any visual sign capable of distinguishing the goods and service … including words, devices, letters, numerals, three-dimensional symbols, colors, or any combination of the above elements may be applied for registration of a trademark. Where appropriate, an application for registration of a trademark of sound, smell or motion may be accepted by the TMO. The concrete regulations for registration of such marks shall be released separately… ’’. Advertising slogans can be registered as trademarks if they possess exceptional originality and distinctiveness. In addition, a new Article 34 has been introduced to protect trademarks. It states ‘‘A trademark which is identical with or similar to another party’s mark in prior use in China on identical or similar goods or services shall not be registered, where the applicant knows clearly the existence of the latter, due to his contract, business transaction, regional or other relation with the owner of the mark in prior use. A trademark which is plagiarized from another party’s registered mark in respect to non-identical or dissimilar goods or services shall not be registered, where the registered one is of salient distinctive character and certain influence, and the plagiarized one is likely misleading for the public.’’ The general principle governing trademark applications is that of ‘‘first to apply, first to be served.’’ The valid period of registration is 10 years from the day of approval and registration can be renewed for an unlimited number of times. Each renewal prolongs the trademark validity of another 10 years from the date of expiration of the previous period of validity. It is highly recommended when registering a trademark in China to also register it in Chinese characters. Not only do Chinese customers recognize a trademark more easily in their own language, but a trademark owner also protects the Chinese character trademark from being used by competitors. One should be aware that, unlike in many other countries, the trademark legislation does not include any regulation about ‘‘company names.’’ In addition, the administration responsible for registration of company names is different from the trademark authorities. This has led to registration by competitors of company names containing other entities’ trademarks and vice versa. With the rapid expansion of the internet, more and more people have realized the importance of domain names. Usually, a company will register their trademark or their enterprise name as their domain name—an additional domain name ending ‘‘.cn’’ is often useful for marketing purposes in China. Domain name registration follows the principle of ‘‘first come, first served.’’ It is very important to register the trademark or enterprise name before it is hijacked by others. A simple research of your company name or trademark on the internet will show the importance of a domain name. The annual fees for registering such a domain name are very low.
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IPR Laws in China
3 Copyright Copyright is considered a ‘‘natural’’ right because it arises automatically on creation of an original work or authorship. Original works of authorships can be books, plays, musical compositions, audio and video recordings, choreographic works, motion pictures, filmstrips, TV programs, photographs, paintings, drawings, maps, architecture, scale models, sculpture, craft works, jewelry designs, fabric designs, computer programs, databases and even oral speeches and lectures. There is, therefore, no need to register one’s copyright in China in order for it to exist. Since, China is a member of the Berne Convention for the Protection of Literary and Artistic Works, the work of a foreign national will be automatically protected in China if he or she is a national of a country which is a member of Berne, or his or her work has been first published in a Berne member country. Generally, the term of copyright protection is the life of the author plus 50 years. New forms of protection are emerging with respect to IP rights against new forms of infringement through the internet. The copyright owner enjoys various personal and proprietary rights for the work. The neighboring rights under copyright include the rights enjoyed by publishers, by performers, by record and video makers, and by radio and television stations. However, there are certain circumstances under which it is allowed to use a copyright without a license, such as for private studies or research, quoting an appropriate part, for use by teachers, and for performances free of charge. Problems with copyright protection in the manufacturing industry often arise in respect of two issues: • protection of commercial and product catalogues; • protection of the form and shape of products. The pictures of products or designs and the drawings contained in technical or commercial catalogues as well as on the internet (e.g. in the official web page of the rights holder) are protected by copyright. The reproduction of these pictures and drawings by competitors in their own catalogues or on the internet constitute a copyright infringement that can normally be enforced through the National Copyright Administration. The infringer will be ordered to remove the infringing pictures or the layouts from its catalogue or internet. The obligation to remove infringements of copyright from the internet has been extended to internet service providers. A specific procedure must be followed by the rights holder to enforce his right through the service provider. The second issue arises when the passing-off of the shape and form of industrial products could be considered as a violation of a copyright. This question arises in cases where a manufacturer has not timely protected the design of its product in China through a design patent. The passing-off of the external shape of a product is not sanctioned in China as an act of unfair competition and therefore the only protection left might be that of copyright. This would imply that the design of this industrial product could be considered as a creation of applied art. This is,
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however, against the wording of both the patent and copyright laws which clearly defines the forms of protection for the shape respectively of industrial and artistic products. In case of industrial products the only protection for their shape is given by design patents. Software is a literary work and enjoys copyright protection in China and does not need a registration to come into existence. However, registration is required as a precondition for filing a lawsuit against copyright infringement. Non-registered software is virtually a copyright without protection. Generally speaking, the registration of software as copyright is advisable as it provides certain evidence about the authorship and ownership of the copyright. Object of the copyright in case of software is not only the software as such in the form ready for being used in a computer, but also all the related documentation which describe the content of the software including the user’s manuals.
4 Unfair Competition In January 2007 the Interpretation of the Supreme People’s Court regarding Civil Trials of Unfair Competition Cases was published and is a guidance on how to handle civil cases involving unfair competition. The law on unfair competition itself has not been amended since 1993. To make things even more complicated, almost every province in China has its own regulations concerning unfair competition. It is a fact that in China, solid protection for intellectual property can only be obtained by registering one’s rights. If one does not have any registered patent or design to protect the product, one cannot expect to receive such protection from the unfair competition law. The Chinese Unfair Competition Law operates on a general principle that if an act is not defined as an act of unfair competition by the law, it is not an act of unfair competition at all. Acts of unfair competition are only those explicitly indicated by the same unfair competition law. Given the fact that there is no specific norm sanctioning the illegality of ‘‘passing-off,’’ the latter is not protected under this law. ‘‘Trade secrets’’ are a very broad concept, and may include all the information and documents that will bring economic benefits to the company and that should be protected by the company. This will include client information, price, design, production methods and procedures, and programs. Trade secrets should not only be protected from competitors, but also amongst key personnel of the company. For key personnel in charge of the company’s trade secrets a confidentiality agreement and sometimes also a non-competition agreement are recommended. For all those selling their products to China, it is very important to be aware of this difference with legal systems in Europe or the United States. The protection of products with patents and design patents, therefore, becomes even more necessary before selling them in China.
IPR Registration in China
1 Basic Requirements for the Patentability of Inventions, Utility Models and Designs In order to be granted a patent right, the invention or utility model must possess novelty, inventiveness and practical applicability. Novelty means that before the date of filing the same invention or utility model has not been publicly used or made known to the public. Since the latest revised Patent Law, China now also requires absolute novelty. Inventiveness means that compared with the technology existing before the date of filing, the invention has prominent substantive features and represents a notable progress, and that the utility model has substantive features and represents progress. An invention or utility model for which a patent right has been granted shall be one that can solve a technical problem and be exploited. Practical applicability, therefore, means that the subject matter of a patent application for invention or utility model must be one that can be made or used industrially and produce positive effective results. An industrial design is the ornamental or aesthetic aspect of an article and can be protected by design patents. The design may consist of three-dimensional features, such as the shape or surface of an article, or of two-dimensional features, such as patterns, lines or color. Industrial designs are applied to a wide variety of products of industry and handicraft: from technical and medical instruments to watches, jewelry, and other luxury items; from house-ware and electrical appliances to vehicles and architectural structures; from textile designs to leisure goods. Any patentable design must not be identical with and similar to any design which has been publicly disclosed in publications inside or outside China. Only applications for patents are examined as to the substance whereas utility models and designs are only subject to a preliminary examination. In the case of design patents, such preliminary examinations are very superficial. The substance C. Devonshire-Ellis et al. (eds.), Intellectual Property Rights in China, China Briefing, DOI: 10.1007/978-3-642-15408-9_3, Asia Briefing Ltd. 2011
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of such patents will be examined by the Patent Office only within an invalidation procedure, which in most cases is filed parallel to court infringement lawsuits.
2 Patent Registration China is a member of the Paris Convention established in 1883, which helps those who wish to obtain patent protection in more than one country. Part of what that convention offers is that the inventor can claim ‘‘priority’’ (12 months for invention or utility patents, 6 months for design patents). This means that after filing for a patent in one country, the inventor may file in other countries with the same priority date. This reduces the risk of having the novelty destroyed by publications and allows the inventor to wait for the results of the first filing before he spends money on further filings in other countries. Many foreign applicants can also designate China when they file a Patent Cooperation Treaty (PCT) application. China became a PCT member state in 1994. The PCT was signed in 1970 in Washington, DC, and up to now has been signed by 184 nations (for further information see www.wipo.int/pct/en). Within a PCT application the inventor can file for IP rights in all the 184 member states. A PCT application (also called an international patent application) has two phases. As a first step, it is filed with the national patent office of the Contracting State of which the applicant is a national or resident or, at the applicant’s option, with the World Intellectual Property Organization (WIPO), situated in Geneva. The WIPO will ask a national or regional patent office to submit an international research study with regard to the application. This is called the international phase. The second phase is the national and regional phase, in which necessary documents are filed with the patent offices of separate contracting states of the PCT. An application to enter the Chinese national phase must be applied for within 30 months (or no later than 32 months upon payment of an extension fee) from the first national application upon which the PCT application is based. After that, substantial examination must be applied for within 36 months. If the application was already filed abroad, eventual search reports (e.g. WIPO search reports) should be made available to the Chinese Patent Office. The application documents consisting of an application form, description and its abstract should be directly submitted to or mailed to the filing office of SIPO in Beijing, or to a patent agency established by the State Patent Office in cities like Shanghai, Shenyang and Chengdu. Patent applications in China by a foreign company can be carried out by any patent agent according to Article 19 of 2008 Patent Law. National applications are no longer mandatory when inventions are made in China. Instead, for any invention made in China that is planned on being filed abroad, the patentee must first apply for a confidentiality examination by the SIPO. Failure to do so means that SIPO will not grant patent rights if the patent is applied for in China. A further development concerns the coexistence of patents and utility models meaning that according to Article 9 of 2008 Patent Law, ‘‘[…] for one identical
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invention creation, only one patent right shall be granted. However, if the same applicant applies for both a utility model patent and an invention patent for the identical invention-creation on the same day, the invention patent can only be granted if the applicant declares to abandon the obtained utility model patent.’’ The application for a Chinese national patent shall contain the title of the invention-creation and the name and address of the inventor and the applicant. The description must outline the invention in a sufficiently clear manner such as to enable a person skilled in the art to reproduce it. Drawings shall be added to the description and claims must be based on the description. The claims determine the scope of protection of the patent. Inventions based on genetic resources are not grantable. Applications for design patents must contain a brief description of the design, pictures and drawings relevant to the design. Design patent applications must indicate the class of product to which the design belongs. All application for national patents must be in Chinese as well as all the related documents. These requirements apply also to PCT applications. The cost for filing a patent application with up to 10 claims, including official fees and fees for a Chinese patent agent, amounts to approximately US $1,650, excluding translation fees. After approval of the application a registration fee (approximately US $150) and the first annual fee approximately (US $110) have to be paid. If all the appropriate application materials are in place, and other formalities have been met, SIPO will publish a preliminary approval of the application within 18 months or earlier if a request is made. Once this has been done a ‘‘substantive examination’’ will take place. There is no set time within which the examiners must reach their decision. Invention patents are therefore likely to take 2–4 years from filing in China.
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For utility models and design patents, the application will be carried out much faster. Designs can take 10–12 months, utility models about 12–18 months. The reason is that these kinds of patents are not examined for substance by SIPO. They are merely checked to ensure the formalities are met, and then, in due course, the grant is officially published in SIPO’s journal. Patents for invention are granted for a period of 20 years. The duration of utility model and design rights is 10 years. All terms are counted from the date of filing. Annual maintenance fees must be paid by the patentee. Failure to comply with these payments will cause termination of the rights prior to its ‘‘natural’’ expiration date. If the application does not comply with, one or more of the above requirements the application will be rejected. Rejection does not come immediately, however; corrections within the scope of the original disclosure can be made at the discretion of the applicant within 3 months from the beginning of the substantial examination, or upon request of the Patent Office. The patent examination guidelines prescribe that normally a rejection decision would be made after at least two office actions if the case is questioned. If the applicant’s response to the first office action includes amendments to the application document, a second office action should be issued upon consideration of the amended document before a rejection will be issued. By this specified rule it may be worthwhile for the applicant to try to argue for their applications in response to the first office actions before surrendering, as there will be a second office action in the light of the arguments and amendment. If the application is rejected by the Patent Office, and the applicant for a patent is not satisfied with the decision, a request for a reexamination can be filed to the Patent Reexamination Board (PRB) within 3 months from the date of receipt of notification. A party who is not satisfied with the decision made by the PRB can institute proceedings in the People’s Court within 3 months from the PRB decision. The PRB will stay in the proceedings as the defendant. The first Chamber of the Intermediate People’s Court of Beijing is competent for these cases.
3 Trademark Registration A trademark application shall be filed to the Trademark Office (TMO) of the State Administration for Industry and Commerce (SAIC) in Beijing. For a foreign person or company, the application of trademark in China must be carried out by an authorized trademark agency. In the meantime, ‘‘famous’’ marks owned by nonChinese companies have also been accorded protection in China. China is a member of the major international trademark treaties, namely the Madrid International registration system and the Paris Convention. Marks are registered in relation to particular goods or services. The International Classification of Goods and Services, which is also the standard in China, sets out 45 classes of goods and services. The owner must apply separately for registration in each class for which protection is sought. In China, it is definitely
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recommended to register a trademark in both the original and in the Chinese language. If the trademark is only registered in the original language, a Chinese local company might register the Chinese version. Any foreign person or foreign enterprise intending to apply for the registration of a trademark or for any other matter concerning a trademark in China needs to hire a Trademark Agency that is authorized by the State to act as an agent. A list of Trademark Agencies can be found at http://www.saic.gov.cn/. Usually, the TMO makes its decision whether or not to accept an application for registration within 24–30 months of the date of application. This timing can be explained by the rapid increase of trademark applications since the Trademark Law was enacted in 1982. In 2009, the SAIC received around 800,000 new trademark applications and registered 1,400,000 trademarks. In comparison, in the previous year 400,000 trademarks were registered. As the number of trademark registrations rise, so have the numbers of litigations. After the TMO accepts the mark for registration, it publishes the mark in its journal. This starts a 3-month ‘‘opposition period’’ during which the public has the chance to challenge the application. This can cause delay or even eventual rejection. If no one raises any objection, the TMO will issue a registration certificate. According to the new regulations, a applicant with a rejected trademark application may apply for review to the Trademark Review and Adjudication Board within 30 days of the date on which they receive notification. Once registered, a trademark is protected in China for 10 years from the date the registration is granted. The registration can be renewed indefinitely for additional 10-year periods. The renewal procedures have to be started no later than 6 months after the date of expiry. Under Chinese law, use of the trademark is mandatory. Three consecutive years of non-use from the day of grant puts the trademark registration in jeopardy of being cancelled for ‘‘non-use.’’ The cost of filing a trademark application per mark per class (regardless of the language used) is approximately US $480, including the agents’ fees, the official fees and disbursements.
4 Copyright Registration The registration of copyright is not compulsory. There is no need to register a copyright in China in order for it to exist. Since China is a member of the Berne Convention for the Protection of Literary and Artistic Works, the work of a foreign national will be automatically protected in China if they are a national of a country which is a member of Berne, or their work has been first published in a Berne member country (for country list see: www.wipo.int/treaties/en/SearchForm. jsp?search_what=C). The patent office of each province or municipality is responsible for the registration of works of authors or others copyright owners in the area under its jurisdiction.
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5 Special Regulations: Layout Designs of Integrated Circuits and New Varieties of Plants In China, the authorities have established special rules in two areas, namely the intellectual property rights for the layout designs of integrated circuits and new varieties of plants, that have been bred artificially or developed from natural plants. Integrated circuits refer to semiconductor integrated circuits, namely semifinished products or final products that use semiconductor material as the substrate, and integrate two or more components, at least one of which shall be the active component, and part or all of interconnected circuits between or on the substrate to perform some kind of electronic function. The layout design can be registered with the SIPO and has to pass the preliminary examination. If no reason for rejection is found, the administrative departments will issue a certificate of registration. The term of protection of exclusive rights of layout designs is 10 years. For the registration of new varieties of plants, the administrative departments of agriculture and forestry under the State Council are jointly responsible for the receipt and examination of applications. The examination and approval authorities have to complete the preliminary examination within 6 months for the variety right, followed by a substantive examination in respect of specialty, homogeneity and stability. The period of protection for vines, forest trees, fruit trees and ornamental trees is 20 years and that for other plants is 15 years from the date of grant.
6 Licensing The major concerns regarding the current Chinese Patent Laws are the compulsory licensing clauses and the strictness in registering the licensing contract. Since 2009, compulsory licensing is possible when a technology hasn’t been used by the patentee without proper reason for three years since it has been granted, where there is national emergency, for public interest reasons, or the exploitation of an improvement invention requires license on the dominant patent. In theory, license fees are a matter of negotiations between the contracting partners but have to be adequate. Concerning the regulation of technology transfer in China, measures have been formulated in accordance with the Foreign Trade Law of the People’s Republic of China and the Regulations of the People’s Republic of China on Administration of Import and Export of Technologies. The ‘‘Catalogue of Technologies the Import of Which Is Prohibited or Restricted’’ categorizes which technologies are prohibited and which are restricted. Prohibited technologies include for example, certain metallurgical procedures and those with environmentally damaging characteristics, or technologies that poses a risk to health. Contracts that include prohibited technologies will not be granted by the Chinese
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government. Contracts concerning restrictive technologies have to apply for a ‘‘Letter of Intent for Licensing Technology Import/Export of the People’s Republic of China’’ from the Ministry of Commerce. After receiving the Letter of Intent, only then is the company allowed to sign the licensing contract, otherwise the contract is not valid. Upon submission of the licensing contract, the letter of intent and other required documents to the local administrative department of commerce, it will examine the documents and issue a Technology Import/Export License a Technology Import/Export License, after which registration of the contract shall be conducted. Licensing contracts of ‘‘freely tradable’’ goods do not need to apply for a Technology Import/Export License but must be registered. Contract partners must register the contract within 60 days. Usually the examination of the registration is completed within three days. The registration form can be obtained via the website of the Ministry of Commerce (http://english. mofcom.gov.cn/). The MOFCOM also provides standardized license contract forms; however, foreign partners should be aware that some clauses, for example, liability or terms of payment, may not be in their best interest. According to the Contract Law of the People’s Republic of China, a license contract has to contain the following elements: • • • • • • • • •
project title; content, claim and tasks; time schedule, location, defined area and means how to fulfill the tasks; declaration of confidentiality concerning technical information and material; risk sharing; ownership of secret technical information and material; quality control standards, acceptance specification; price, license fees, method of payment; contractual penalty in case of breach of contract, method of calculation for damage claims; • methods for conflict settlement; • explanation of technical terms. The licensor should pay attention to the fact that the licensee owns the rights to any improvements made by the licensee. A contractual exception to this is not allowed according to the current law. Based on this licensors should think about other mechanisms such as a non-competition clause.
7 Addresses and Links State Intellectual Property Office No. 6, West Tucheng Road, Haidian District, Beijing 100088, China Phone: +86-10-62085588 Website: www.sipo.gv.cn (English version available)
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Patent agencies in China Website: http://www.acpaa.cn/englishnew/ (English version available) World Intellectual Property Organization (WIPO) No. 34, Chemin des Colombettes, Geneva, Switzerland Phone: +41-22-3389111 Website: www.wipo.int Trademark Office of the State Administration for Industry and Commerce No. 8, Sanlihe East Road, Xicheng District, Beijing 100820, China Phone: +86-10-68052266 Website: www.ctmo.gov.cn (English version available) National Copyright Administration No. 85, East Fourth South Avenue, Beijing 100703, China Phone: +86-10-65127869 Website: www.ncac.gov.cn (Chinese only) Copyright Protection Center Wuhua Building, 5/F, No. 4A, Chegongzhuang Avenue, Beijing 100044, China Phone: +86-10-68003887 Website: www.ccopyright.com.cn (Chinese only) Music Copyright Society of China Jingfang Building, 5/F, No. 33, Dongdansantiao, Beijing 100005, China Phone: +86-10-65232656 Website: www.mcsc.com.cn (English version available) China Audio and Video Association No. 51 NanXiaoJie ChaoYangMen, DongCheng District, Beijing 100001, China Phone: +86-10-65122882 Website: www.chinaav.org (English version available)
Trade Fairs and Exhibitions
Around 4,000 trade fairs take place in Mainland China every year, with Shanghai, Beijing and Guangzhou being the most important locations, followed by Dalian, Shenzhen and Zhuhai (a directory of ‘‘China and Overseas Exhibitions and Meetings 2011–2012’’ can be ordered online at www.dcoem.com). The norms aimed at enforcing intellectual property rights during exhibitions was promulgated by the MOC and SAIC on January 10, 2006 and entered into force on March 1, 2006. In the past, enforcement of rights during exhibitions was not regulated, which led to ineffectual protection against even the most flagrant infringements. Frequent conflicts between different authorities arose as to which authority was responsible for taking measures of enforcement. Due to the unclear definition of competences between different offices, it frequently occurred that decisions made by one authority were not accepted or executed by another one, bringing the case to a deadlock and giving the infringers enough time to get rid of the incriminating evidence. The 2006 legislation drew a clear line as to which authorities are competent to intervene during exhibitions in case of infringement. Since then, there has been a heightened awareness of the increased likelihood that the authorities now act more quickly. China’s Action Plan on IPR Protection from 2009 recommends ‘‘[…] exploring the setting up of IP helpdesk for Chinese enterprises at well-known exhibitions, and to strengthen exhibitors’ capacity in handling IP disputes and raise their IP awareness’’.1 If a trade fair lasts 3 days or longer, trade fair organizers are obliged to establish a complaint center for IPR related issues. In all other cases, the local IPR authorities are encouraged to step up their efforts to offer consulting and monitoring services.
1 http://www.sipo.gov.cn/sipo_English/laws/whitepapers/200906/t20090611_464784.html, accessed 08.03.2011
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1 Preparation Foreign companies attending exhibitions or trade fairs in China should do their homework in order to make sure that their intellectual property rights are protected and can be enforced in case of infringements. Trade fairs often serve as a monitoring tool where illegal copies of a product can be detected. Before participating in a trade fair, a company needs to check whether its products are registered in China in the form of patents, utility models, design patents or trademarks. Copies of the relevant documents should be available on the spot. In case the exhibiting company has a local lawyer in China, it is advisable to inform them in advance about participation in the trade fair. The lawyer should be provided with the necessary documents and be available during the time of the exhibition. As mentioned above, trade fair organizers are obliged to set-up a complaint center for IPR issues if the fair lasts at least 3 days. It is useful to establish contact with this complaint center before the trade fair starts and figure out what legal means they have in case of infringements, e.g., whether they have the right to clear stands or to expel an infringer. If the trade fair lasts only 1 or 2 days and the organizers do not provide a complaint center, the exhibiting company can check whether local enforcement authorities such as the Administration for Industry and Commerce (AIC), the Public Security Bureau (PSB), or the Technical Supervision Bureau (TSB) will be present at the trade fair. If not, they may at least provide a contact person who can be addressed in case of infringements. If authorities show little ambition to be supportive, it might be useful to cooperate with other firms attending the trade fair or contact a national chamber of commerce in order to increase the pressure on the authorities. Questions that should be addressed when talking to the complaint center or the local enforcement authorities are: how will they react to a case of infringement; what evidence and in what form is necessary to document a case of infringement; what are the possibilities of forcing an infringer to stop exhibiting an infringing product; what are the time frames for the infringer to react to a complaint; what are the chances to use the means of a preliminary injunction; what amount of down payment would be required in the case of a preliminary injunction. China exhibition organizers usually provide exhibitor information on their websites. Checking the websites of competitors in advance might reveal potential infringements and allows more time to prepare adequate enforcement action. An exhibiting company might also know some ‘‘usual suspects’’ that have infringed its products in the past; so it would be advisable to check whether these will be represented at the trade fair as well. As part of the preparation, a company should also spend some time considering what information it makes available to the public in the form of brochures or samples. Everything that is given away could serve as an inspiration or instruction manual for potential illegal copies.
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2 Dealing with Infringements Trade fairs and exhibitions provide a good opportunity to detect potential infringers. The ‘‘set-up’’ day of the trade fair, therefore, can be well used also to walk around the stands and search for infringing products. It is also useful to pay a visit to the booth of the complaint center or the local enforcement authority. In cases where a potential infringing product is detected, it is important to obtain as much information as possible about the exhibitor and the product. A digital camera or a camera-phone might be useful to secure evidence. Brochures, business cards and other types of literature are all helpful to support enforcement action. After detecting a potential infringer, the rights holder has to decide whether or not to take action. If action is taken, the company has to decide which legal means can and should be used to fight the infringer, according to the information it receives from the local enforcement authorities and its own local lawyer. If action is taken at an exhibition, it might be necessary to follow up with the authorities to ensure that appropriate prosecutions take place.
Protecting Your IPR
Filing for intellectual property rights in the form of patents or trademarks entitles a person or a company to use all legal means defined by law in case of infringements. However, these rights do not ‘‘protect’’ the content of intellectual assets. It is highly recommended to combine IP rights with protection mechanisms that ensure that crucial information cannot be retrieved easily from disloyal employees or criminal outsiders. In some cases, protection measures can be more effective than a patent, e.g. where the product life cycle is much shorter than the time needed for a patent registration. For products with short life cycles, filing for a utility model may be more useful than a patent as the examination period is much shorter. Strict confidentiality is one of the best protection methods and should be a main concern, especially with long-lasting products or technologies. In general, the protection of sensible information is mandatory and can be achieved by implementing some common-sense rules, such as access control and prohibiting downloads from PC stations. However, sometimes simply the fact that a product is in the market does not allow keeping a technology confidential as many technological traits can be re-engineered. In most cases confidentiality is used to protect recipes or production procedures that cannot be simulated easily. The recipe of Coca-Cola is a well-known example for keeping a combination of ingredients secret much longer than the life time of a patent.
1 Safety Measures Technological development allows a variety of protection measures that can be applied for all kinds of products. The following list names some of the most common safety measures according to the level of sophistication (1 being the lowest, 4 being the highest):
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Level Measure 1
2
3 4
Holography Watermarks Temperature sensible colors Color-shifting ink Mechanisms to prevent unauthorized opening Invisible, UV/IR reflecting color Micro writing Colors that are only visible with filters Radio-frequency identification (RFID) tag Bar code, matrix code Encrypted matrix code Digital watermarks Taggants (either a radio frequency microchip used in automated identification and data capture or a chemical or physical marker added to materials to allow various forms of testing) Cryptographic data protection
According to security experts, protection can be achieved by using three to ten security features and also by changing them on a regular basis in order to make illegal copying even more difficult. When deciding which security feature might be feasible it should be taken into consideration whether the measure serves as a preventive protection against counterfeiting or a means of generating evidence in case of a lawsuit or administrative action against illegal copies. Preventive measures include all features that can be recognized by non-experts and without technical support (see Level 1 in the table), such as safety features on money bills. Measures that provide evidence are usually hidden and demand a complex procedure. Measures that allow a continuous tracking of each product guarantee the highest standard of protection against counterfeiting. However, the implementation of such a complex tracking system is expensive and may not be justified although those measures also have a positive secondary effect in terms of quality control and logistics. No matter whether a company decides to use preventive or evidence securing measures or tracks the whole production and distribution chain, if an infringement occurs the company needs explicit rights to fight the counterfeiter. Without a trademark, design patent, invention patent or utility model, there is no legal foundation to prevent a counterfeiter from using another company’s intellectual rights. A reasonable combination of technical safety measures and intellectual property rights increase the probability that counterfeiters may stop the infringing activities or choose another victim with less protection.
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2 Preparation Against Infringements As a rule of thumb, the earlier an infringer is detected, the better. However, this is easier said than done, especially in a huge market like China. Nevertheless, continuous monitoring should be part of preventive protection measures in order to find counterfeiters at an early stage and to keep the damage at the lowest level possible. If an infringer has plenty of time to establish their company and the counterfeited products in a market, the costs of fighting them will be higher and the damage done in terms of name recognition, trust in a brand and market share will be extensive. Monitoring tasks include systematic screening of the internet and relevant publications, visiting trade fairs and exhibitions as well as market research on the spot. These tasks can also be delegated to specialized investigation agencies that are also aware of the necessity for securing evidence in a way that will be accepted before court. A company needs to define a procedure on how to handle a potential infringement case. Gathering as much information about the potential counterfeiter as possible is a priority in order to define further action. The strategic decision whether to fight the infringer immediately or to further monitor the development usually needs to be made by the management. Any legal action against an infringer needs careful preparation; a hastily written letter with vague accusations can cause a long lasting legal battle with sometimes bad results for the rights holder. A company should, therefore, define the strategically important issues that trigger immediate action in case of infringement. The choice of weapon with which to fight the counterfeiting activities has to be discussed thoroughly; consequences of different scenarios need to be compared in order to decide on how to attack the infringer.
Enforcement of IPR in China
Registering intellectual property rights is pointless unless they are actually used to prevent infringing activity. In China, the principle of ‘‘dual enforcement’’ provides two means of action. A rights holder can choose to enforce their patents, trademarks and copyrights either before the courts or before an ad hoc administrative body. A rights holder or their counterparts will also have the right to appeal in court administrative decisions. The accession of China to the WTO has forced many changes and a modernization upon the Chinese enforcement system. In particular TRIPS is now directly applicable in China, although it will be very unlikely that a rights holder might be able to claim their rights based only upon international regulations. There is no doubt that the accession of China to the WTO has introduced a certain level of international scrutiny on the enactment of IP standards by national and local legislators and its enforcement by judicial and administrative bodies. The external pressure of the international community as wells as the obvious economic calculation of the interests at stake has pushed Beijing to recognize the insufficiencies of the Chinese enforcement system and to support legislative as well as cultural reforms, including campaigns for consumer awareness of IP rights. There is still quite some room for improvement, however, as the practical enforcement of intellectual property rights might turn out to be very difficult. Many judges and administrative officials, especially outside the main cities like Beijing, Shanghai or Guangzhou, do not have sufficient juridical education to handle complex patent disputes. Local protectionism and corruption still plays a role in court as well as in administrative proceedings. To litigate against a public company in a province outside Beijing or Shanghai can prove a very hard challenge with very little chance of success. Often, conflicting interests are at stake. One above all is that of local politicians to back the development of local industries and protect full employment policies which also are incidental on social and police security. Damage compensation or even a proper enforcement is often difficult to obtain. Judicial or administrative
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activism is nonetheless necessary. At least it will send the infringers a clear message of the risks involved in infringing a company’s IP rights. In many cases the best result that can be achieved is that of stopping a criminal organization from infringing on IP right so that they will move on to a weaker target. This is the only way to push for an effective enforcement of IP rights in China. Only by testing courts and administration on real cases, instead of simply complaining about how difficult is to enforce IP in China, can companies push the whole system to substantial change, to mature acceptable standard practices and transparency. One of the consequences of the Chinese dual system of enforcement is the multiplication of the authorities potentially responsible to hear an infringement case. This factor contributes to the slowness of many proceedings which normally go through a first administrative phase and later a revision phase with the judicial authorities. However, this is not always the case. Depending on the infringer and on the IP right at issue, curtailed strategic choices can help avoiding lengthy proceedings. The infringers of trademarks rights are often illegal organization structured in so called ‘‘business card’’ or ‘‘ghost’’ companies which do not have business licenses. These kinds of infringers will try to escape the procedures initiated against them. In these cases, issues of appeal or recourses are out of the question. A simple administrative action, if well prepared, can be the first and last instance of protection. However, these cases might need significant time to prepare in order to catch the infringers and not let them escape justice. Suing a public or private company of a certain standing for an IPR infringement will certainly involve long legal battles. In these cases the most effective procedure, independent of contingent considerations, like the costs of the procedure, should be taken after analysis of all relevant factors has been done. In these types of cases, resorting to administrative enforcement should be ruled out because of the likely political connections of the infringer and also because any decision of the administration will surely be challenged ex novo before a court. In this case, the proceedings will be doubled together with costs and time. A low-key and low-cost first step towards enforcement of IP rights is simply to write to the infringer demanding them to stop. The letter normally encloses an undertaking not to infringe further, which, if signed, is useful evidence against the infringer in the future.
1 IPR Complaint Centers One initiative in a series of activities of the Chinese Government to enhance IPR protection was the establishment of IPR complaint centers. Since 2006, around 70 such service centers have been opened in across China to record complaints on intellectual property rights infringements. The centers are managed by the SIPO (State Intellectual Property Office. The center locations include Beijing, Heilongjiang, Gansu and Jiangsu provinces. All complaint centers use the same telephone number (+86-city code-12330).
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IPR complaint centers verify the authenticity of information gained through the hotlines, sort out the cases, and convey them to relevant departments. The departments responsible for handling the cases have to report results back to the complaint centers. For foreigners, these complaint centers offer the advantage of having one single point of contact, thus avoiding the task of finding one’s way through the Chinese IP administration. On the other hand, the complaint centers so far only offer their services in Chinese. Once a company has used a complaint center to record an infringement, it cannot file an administrative action. Follow-up can also be done only via the complaint center and not directly with the responsible departments, which might be disadvantageous.
2 Preliminary Conditions for Administrative and Judicial Enforcement As in any other part of the world, the first thing that a court or an administration will do before a lawsuit is to check whether the plaintiffs have active legitimacy according to the law. A plaintiff must be a natural person, legal person or other organization with direct interests in the case. Before filing an administrative or judicial action, the rights holder should make sure that their patent rights have been duly registered in China. In case of a patent for invention, before its announcement and publication by SIPO, the applicant enjoys no protection. A partial protection is provided by the patent law after publication against third parties exploiting the invention. In this case, the patent applicant has the right to ask them to pay royalty fees for the period between the publication of the patent and its registration (issuance). However, only after the registration (issuance) of the patent is full judicial enforcement possible. In the case of utility model and designs, protection is offered only after full issuance. Furthermore, when filing an action against an infringement, the holders of a utility model must also provide the administration with a search report. Being a utility model in China registered without substantive examination and therefore its validity at the time of registration still uncertain, this measure aims at preventing bad faith enforcement of patents lacking patentability.
3 Administrative Action In China, one way to formally enforce IP rights is to harness the power of the State. The Technical Supervision Bureau (TSB), the Administration for Industry and Commerce (AIC), the Copyright Office and Patent Administration Office are all designated separately or jointly to enforce IP rights. These agencies are empowered to conduct inspections of suspected infringers. Some are empowered to actually seize infringing goods and impose fines. The nature of the rights
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infringed and the complexity of the case will determine which agency to use. The costs of the raid against the infringer vary depending on the circumstances. Even if the administrative procedure offers an economically cheaper and faster alternative to the more expensive and lengthy court proceedings, there are a number of reasons why administrative procedures lack attractiveness, especially when it comes to the enforcement of patents. Some of these reasons are endemic to the administrative proceeding system: no interim injunctions and no damages can be obtained through administrative proceedings. Unlike in the case of administrative enforcement of trademarks, no raids ‘‘inaudita altera parte’’ are conducted by the administration against the infringers. According to the special set of norms regulating patent infringement administrative proceedings, the infringer must be always notified in advance of the pending action. Furthermore, unlike in the case of administrative enforcement of trademarks, the procedures for the administrative enforcement of patents are more complex and require fulfillment of more formalities which make the process something halfway between the trademark administrative enforcement and the court civil proceedings. Many courts, especially those of the big industrial and commercial cities like Beijing and Shanghai, have improved the quality of their judges and shortened the length of the proceedings. These courts are better prepared to decide complex technical matters than the administration. Bribes and local protectionism are a less incisive factor in a court proceeding when a court like Beijing or Shanghai is invested of a patent lawsuit. Courts have much more investigative and enforcing powers than the administration and can grant protective measures which are not available in the administrative proceedings and can compensate damages.
Administrative Action Against Infringements of Patents Administrative action is available against infringements of any of the three types of patents: inventions, utility models and designs. The action can be filed with SIPO or one of its local bureaus. The administrative authorities cannot intervene ‘‘ex officio’’ to regulate patent infringement disputes, which means the administration must be activated upon initiative of the patentee or any interested party (i.e., the holder of an exclusive license by their own initiative or the holder of a simple license if authorized by the patentee). Administrative patent enforcement is normally initiated by a written request of the rights holder who will ask for investigation and collecting of evidence of patent infringement. The alleged infringer will be notified of the patentee’s request for administrative action. This will nullify any hope to catch the infringer by surprise and is definitely one of the main reasons that make administrative enforcement less effective and attractive for the rights holders. The alleged infringer will be given also the possibility to file written responses and submit evidence of non-infringement. A hearing will take place within about 3 days from the notification.
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Furthermore a security must be deposited by the applicant, which must represent the value of the goods that should be seized as an anticipated damage compensation for the defendant in case infringement is not established. It is evident that in many cases such security could be much higher than the damages that the applicant might ever hope to collect from a later lawsuit against the infringer. Furthermore, because the outcome of such proceedings is not always predictable due to the oft mentioned local protectionism or political interests, the operation can also be very risky for the applicant. The remedies that can be obtained in such procedure are normally the cessation of the infringing acts, the destruction of the infringing goods, the confiscation of the infringer’s illegal earnings, and the imposition of a fine. Against such decision the infringer can appeal to the People’s Court within the following 15 days.
Administrative Action Against Infringement of Trademarks Trademark rights are enforced by SAIC and its local AIC. The AIC is set up at provincial level, city level and district level. Any of these levels can be involved in trademark enforcement actions. No specific rules of procedure have been issued. In case, more than one AIC is responsible for handling a case, it will be handled by the AIC that has been activated first by a complaint. Conflicts may arise between different provinces and political motivations might influence the decision of an AIC to take over a case or not. The AIC often cooperates with other administrative agencies like Customs and provincial or national governmental agencies in fighting infringements. The trademark administrative enforcement procedure partly differs from that of patents. The administration can always act ‘‘ex officio,’’ the formalities are reduced to the minimum and raids against the infringers can be conducted without informing the infringer in advance. That explains why, in the case of trademark violations, the administrative procedures are a popular enforcement tool. They normally achieve the main objective of the claimant, i.e., the cessation of the infringement, very quickly. If persuaded by the applicant of the existence of a trademark infringement, the administration will act immediately without requesting payment of a security and without notifying the other parties. The remedies obtainable from such raids are orders for the infringer to cease and desist, seizure and sealing of infringing goods and tools used for manufacturing infringing goods and order to infringer to pay a fine. According to Chinese law, the amount of damages shall be the profit that the infringer has earned because of the infringement in the period of the infringement or the injury that the infringee has suffered from the infringement in the period of the infringement, including the appropriate expenses of the infringee for stopping the infringement. Where it is difficult to determine the profit that the infringer has earned, the People’s Court will impose an amount of damages of no more than RMB1,000,000 according to the circumstances of the infringement.
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However, compared with damages that have to be paid in lawsuits in the United States or in Europe, Chinese courts usually do not allow damages that cover the actual costs for the legal action or the loss caused by the infringement. Even if a raid does not succeed in seizing infringing goods, the effect of such a raid on the alleged infringers is often shocking and can be sufficient to break down the chain of distribution of the often well-organized gangs of infringers. While the administration may accept complaints even when they are founded on something less than solid evidence, it is advisable to first investigate the infringement and collect evidence in accordance with the conditions of validity set by the law, and then file for administrative action. The administration will be much keener to assist applications which are well prepared and do not require additional work on the part of the administration. It is important to underline that the administration of trademark enforcement cannot avail itself of the assistance of the enforcement authorities, and in particular the police. If some important data such as the address of the infringer is missing one should not expect the administration to take action. In case of trademark and copyrights infringements one of the main challenges is that of detecting the source of the infringement. In particular, in order to effectively break down the chain of infringing acts, the final manufacturer and mastermind of the infringing organization should be made the object of the enforcement effort. However, very often infringers operate on a small scale structure delegating the manufacturing of infringing products to a myriad of private individuals or illegal factories which are very difficult to track down. Each of these manufacturers is an independent unit. Shutting one down might not end the infringement. The investigation of the infringement should unveil as much as possible of the organization behind the illegal activities. Distributors at national and international levels are normally the first entities to be discovered. They are those more exposed to the public because they must sell these products. Their presence is often traceable through the internet and e-commerce websites. The annihilation of this superficial layer of the infringing organization is as much as administrative actions can often achieve. However, this can have a positive repercussion to the whole criminal system and, at least, dissuade the masterminds from further infringing that product or brand or to suspend infringement for a while. However, these organizations are like mythological hydras: they will keep growing unless the deeper levels of the organization are hit hard. As many infringements of trademarks and copyrights are meant to be sold in foreign markets, Customs action should always be coupled with administrative enforcement. Seizure of large quantities of infringing products can hit the business of the infringers and escalate the level of administrative action by calling in the criminal enforcement authorities. It is evident from this sketch of the situation that a big effort has to be made by the rights holder at the beginning with the investigation and evidence securing activities. Such preparation will take time and resources but it will be the best guarantee for success in an enforcement action.
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Administrative Action Against Infringement of Copyright Copyrights are enforced by the National Copyright Administration (NCA) in Beijing with its local copyright bureaus in the provincial capitals and in other municipalities. The copyright administration has the right to intervene, also ‘‘ex officio,’’ to order cessation of infringements, to confiscate illicit profits and infringing reproductions. These authorities can also impose fines and confiscate equipment used for the reproduction of counterfeits. They are constantly improving their skills and now are accumulating more and more experience in the enforcement of copyright, especially in software matters. However, in some parts of the country like the western regions, these authorities still lack sufficient experienced staff, and this sometimes creates problems with the consistency and quality of their work. Where a copyright owner finds any content communicated through the internet infringes upon his copyrights, and sends a notice to the internet information service provider or any other institution entrusted thereby, the internet information service provider shall immediately take measures to remove the relevant contents, and preserve the copyright owner’s notice for 6 months. Remedies granted by a copyright administration department in case of infringements can be the ceasing of the infringing act, eliminating the effects of the act, making an apology or paying damages, confiscating and destroying infringing reproductions and imposing a fine which is no more than three times of illegal operation; if the amount cannot be determined, the fine shall be no more than RMB100,000.
4 Civil Action Through the People’s Courts When enough evidence exists, or when enforcement through the authorities is (likely to be) unsuccessful, relief can be sought through the People’s Courts. In China, civil procedures are similar to Western procedure in that a complaint is filed, fees are paid, and the parties move on to court. One important difference is that Chinese judges play a much more proactive role in the trial. They serve as triers of both fact and law. A typical IP infringement case normally lasts about 6 months. In February 2010 new regulations came into force in terms of the jurisdiction in civil actions which is now dependent on the complaint value and involvement of foreign companies. A complaint value of more than RMB200 million, or more than RMB100 million and involving a foreign company, are subject to the Higher Court in the first instance. Those with a complaint value of more than RMB5 million, or smaller amounts but involving a foreign company, will be taken up by the Intermediate Court in the first instance. Lawsuits are initiated by filing a written complaint. The complaint must meet certain formal standards to be accepted by the court and docketed in the court registry as a pending lawsuit. Only the acceptance and registration of the lawsuit with the court will trigger the notification of the same to the defendant and the
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setting of the law-established deadlines for filing defenses, motions of different kinds and evidence. The acceptance of the lawsuit is not merely a formal matter. In particular, in this preliminary phase the court will examine and determine its jurisdiction and competence over the complaint. This decision is crucial and will be a first test for the whole preparatory phase. If the infringer will file a negative declaratory lawsuit, he will file it with his local court. In these cases it will be difficult to move that case away from that court. Therefore, it is necessary to avoid creating conditions for the infringer to anticipate the rights holder with a negative declaratory lawsuit. Court deadlines are mandatory and failure to meet submission deadline will result in ‘‘preclusions.’’ The Chinese civil procedure is composed of more than 200 articles, a small number compared to civil law in European countries. This explains why court rules are very general, leaving single court panels discretionary power to shape their own practice. An adversarial system where both parties fully disclose their defenses and evidence is not the rule in China. Courts still have a rather ‘‘bureaucratic’’ approach to litigation. Trial by ambush is a reality. For instance, many important motions are filed by a party without the other party being even notified of them. The court will examine these motions in its closed chamber and call in a reply from the other party only if deemed necessary. Some motions are decided orally. This is common also in Western countries, but with a decisive difference: in Western civil procedures, oral decisions on motions are issued by the court during a hearing where the parties are present and can directly and actively counter the court decision. In China such decisions are taken by the court, passed on orally to the court clerk, who will in turn pass them orally down to the parties. Appeals or even counter arguments are not possible even if established by the law, for lack of a written order. Court preliminary decisions in written form are no much better because they are often devoid of any real ‘‘motivation’’ or ‘‘reasoning.’’ It is evident that the rather undeveloped civil procedure will influence the outcome of an IP infringement case as much as the applicable IP substantial law. However, especially in more experienced courts like Beijing and Shanghai, many procedural issues have found acceptable practical solutions and litigation in these courts should not be discouraged by a general picture of the Chinese legal system. Many judges in Beijing and Shanghai have now heard hundreds of IP cases; and some of them have also studied in Europe or the United States. Courts can be activated in IP rights infringement cases with a lawsuit. This will trigger formal court procedures which will end up in a judgment immediately enforceable. However, courts can also be activated before filing a lawsuit though an application for the issuing of a preliminary injunction. Preliminary injunctions, issued by the People’s Courts are useful intellectual property enforcement tools when there is a risk that the infringer will destroy evidence ship or hide the infringing goods or shut down his operation when he suspects he is soon to be inspected or sued. However, by law, the party seeking the injunction is liable for any damage caused by a wrongful injunction. To balance this risk, the court requires the payment of a security bond normally equal to the value of the expected yield from the seizure.
5 Criminal Enforcement Through the Public Security Bureau
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5 Criminal Enforcement Through the Public Security Bureau Criminal law enforcement is available for all type of IP rights. Criminal enforcement can be activated either by the law enforcement authorities ‘‘ex officio’’ or upon request from the rights holder or other interested entities. Criminal enforcement is conducted through district attorneys that avail themselves of the support of the police. China’s police, the Public Security Bureau (PSB), can be rather effective when fighting an IP infringement. In China, an IP dispute may be criminally actionable if the value of the goods exceeds the statutory criminal thresholds. A recent judicial interpretation of the Supreme Court sets out a lower threshold for criminality compared with earlier regulations. For example, it may be criminally actionable if the value of goods is over RMB50,000 (for individual infringers) or RMB150,000 (for business entity infringers). The maximum penalty for IP criminal offenders is 7 years imprisonment. In many cases infringers are so well-organized that their infringing production will not be found in the same storage in the above-mentioned quantities. Storage will be often scattered in various hideouts in order to avoid being caught red-handed in a criminal offence. Many infringing companies exist only as a virtual office and therefore, public records of their business are not available. Such records are not easy to find and often are destroyed before the arrival of the authorities or during their inspections.
6 Enforcement Through Customs Where any holder of intellectual property right requests Customs to take protection measures for their intellectual property rights, they are entitled to lodge the application, directly or entrust an agent established in Mainland China on their behalf. Such action is normally initiated when the rights holder has knowledge of a specific stock of infringing products being prepared for export outside China. In this case the rights holder will apply for Custom protection with the Customs
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territorially competent. When applying for Customs protection the rights holder must provide sufficient evidence to prove the following facts: • the goods requested to be detained by Customs are pending import or export; • a trademark, utility model or patent has been used on the relevant goods without the consent of the holder of intellectual property rights. Chinese Customs protection upon initiative of the rights holder is only effective if the rights holder has collected all the necessary information and evidence of the illegal export. The efficacy of the customs action will be higher for trademarks than for patents. Customs, upon identifying the allegedly infringing products, will request the applicant to make a deposit with the value equal to that of the goods. This deposit will include the price for storage costs. The owner of the sequestrated goods will be notified of the goods’ seizure and will be given the opportunity to pay a counter bond to free the goods. Within 20 days from the Customs protective measure, the rights holder will have to initiate civil proceedings with the court territorially competent in order to preserve the effects of the Custom protection. However, in spite of the filing of a civil lawsuit the seized goods will be freed by the Customs if the goods’ owner pays a counter bond. Therefore, the only way for the rights holder to avoid any risk in seeing the goods freed by Customs will be that of filing for an interim injunction instead of a lawsuit. If the injunction is granted a new bond must be paid to the court. Afterwards, within 15 days from the injunction, the applicant or rights holder will have to file the main civil lawsuit as well. This scenario applies mostly to Customs protection of patent rights, where important and complex machines are at stake and the infringers are well established Chinese private or public companies. In case of trademark infringements the situation is different as the infringers tend to be criminal organizations which will prefer not to expose themselves to the outside and will simply take the risk of such losses. Therefore, Customs protection can be followed by the filing of a normal civil lawsuit instead of the filing for an interim injunction. Another way of Customs protection is by recordation of IP rights, which allows the Customs authorities to initiate action as soon as they discover any import or export goods suspected of infringing the recorded intellectual property right. In order to obtain ‘‘ex officio’’ Custom protection, the rights holder must apply for recordation of his IP right and pay the necessary fees. The process of recordation of trademarks right lasts a couple of months and is partly conducted via internet. The Customs protective recordation of intellectual property right enters into effect on the date of approval by the General Administration of Customs and is valid for 10 years. Where the term of the intellectual property right is less than 10 years from the effective date of the recordation, the recordation term of an intellectual property right will be in conformity with the term of the intellectual property right. Once Customs has taken action based on recorded IP, the process will be the same as described above.
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In any case, when a rights holder plans to activate Customs protection in China, the rights holder must also be ready to file the necessary lawsuits. Therefore, at the time of filing Customs protection applications for interim injunctions and lawsuit must be ready to be filed within a few days. The preparatory work for such actions must not be underestimated.
7 Invalidation Another way to defend one’s intellectual property rights might be to request invalidation of another’s rights that are considered an infringement to the rights of the original rights holder. As a matter of fact, in recent years it has become a concern that Chinese companies or persons screen whether IP rights for products have been registered in China, and if not, apply for registration of a utility model or design patent of that right. As mentioned above, the examination for these kinds of patents is rather superficial, so the rights are often granted. This may result in a legal battle whose right is ‘‘stronger’’ and will be often carried out in the attempt of the original rights holder to invalidate the rights of the utility model or design patent. The written request for invalidation shall, in combination of all the submitted supporting documents, specifically state the reasons for the request for invalidation and designate the evidence on which each reason is based. Against the decision of Patent Reexamination Board (PRB) declaring the patent right invalid or upholding the patent right, the patentee or the person who has filed the invalidation can within 3 months from the notification of the decision, institute legal proceedings in the People’s Court (the first Chamber of the Intermediate Court in Beijing as in the reexamination). Any request for invalidation of a patent right on which an examination decision has been made in another invalidation cases shall not be accepted and handled if it is made on the same grounds and evidence. The requester may give up all or part of the grounds and evidence for invalidation. The Patent Reexamination Board will not check nor examine the grounds and evidence the requester has given up. Any patent right which has been declared invalid shall be deemed to be nonexistent from the beginning. However, there are a number of exceptions to this rule. For example, Article 47 of the Patent Law provides that: ‘‘The decision declraing the patent right invalid, shall have no retroactive effect on any judgment or ruling of patent infringement which has been pronounced and enforced by the People’s Court, on any decision concerning the handling of a dispute over patent infringement, which has been complied with or compulsorily executed, or any other contract of patent license or of assignment of patent right which has been performed. However, the damage caused to other persons in bad faith on the part of the patentee shall be compensated.’’ In China, like in Europe, the civil judge in the main infringement proceedings cannot decide on the validity of the allegedly infringed patent. Therefore, it is very
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common that two proceedings, one for the infringement of a patent and one for the invalidation of this same infringed patent are filed almost at the same time. In fact, the vast majority of invalidation procedures are initiated within the frame of a patent invalidation lawsuit. The defendant accused of patent infringement will resort to the invalidation as a very effective form of defense in the main lawsuit. The main purpose would be that of obtaining a declaration of invalidation that could wipe away the infringement proceeding. In this regard, special provisions of the ‘‘Issues Relating to Application of Law to Adjudication of Cases of Patent Disputes’’ of 2001 allows the defendant in a patent infringement lawsuit to apply with the court for the suspension of the infringement proceeding during the invalidation procedure. In practice, almost all such requests are granted by the courts. No judge likes the idea of trying a case to its very end only to discover later that the patent declared as infringed has also been declared invalid by the PRB. Therefore, the filing of invalidation serves often a secondary purpose; the main purpose being the obtaining of a suspension of the infringement proceedings for tactical reasons.
8 Costs for Enforcement The costs for enforcement can vary significantly and are usually much higher when pursuing legal action through the courts compared with administrative action. An administrative action for a simple case would cause expenditures between US$20,000 and US$30,000, whereas the costs for a lawsuit in Chinese courts will be rather similar to those for a lawsuit in Europe or the United States. The procedure costs and fees are proportional to the value of the case. Important patent infringements can amount to over US$50,000 in court fees. Administration fees are much lower, from a few hundred dollars to upwards of US$3,000 for complex procedures involving a number of administrations. International and Chinese attorneys bill by the hour and rates vary from province to province, and from case to case. Chinese attorneys handling foreign clients enforcement cases charge fees which are equal if not even more expensive than those of Western attorneys. Often such fees can only be partly recovered in case of successful enforcement. In fact, the court will award what is ‘‘reasonable’’ and not what was effectively paid. International investigators are normally more expensive than local investigators. Part of the additional costs is due to the fact that the international investigators communicate in English to their clients thus allowing the latter to overcome the language barrier. Local investigators can be very useful in smaller infringement cases, especially those outside big cities. However, their background and skills are not always up to the foreign client’s expectations. It is often difficult to control their activities or to verify if instructions have been really followed as they tend not to report on their activities as frequently. In some cases local investigators might be vulnerable to local political pressure. Double games by investigators are
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not a mere fantasy in China. International investigators usually work with a certain transparency (client contact and reporting). Their field staff is also composed by local experts which are coordinated by a local manager, normally a Chinese national who can communicate in English. In China, there is no rule that the loser of a civil lawsuit must pay all their legal costs plus those of the winner. Therefore, full compensation of legal costs is not to be expected when prosecuting or defending cases in China. Legal costs are forfeited as well as the costs of the preliminary phase related to the collection of evidence. Only in particular cases will trap purchase, notary and expert costs be awarded in a reasonable proportion.
Appendix
Main IPR Laws, Regulations and Conventions in China 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23.
Patent Law (2008) Trademark Law (2001) Copyright Law (2002) Regulations on the Protection of Computer Software Regulations on the Protection of Layout Designs of Integrated Circuits (2001) Regulations on the Collective Management of Copyright Regulations on the Management of Audio-Video Products Regulations on the Protection of New Varieties of Plants (1997) Regulations on the Protection of Intellectual Property Rights by the Customs Regulations on the Protection of Special Signs Regulations on the Protection of Olympic Logos Paris Convention for the Protection of Industrial Property (1985) Patent Cooperation Treaty (1994) Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure Locarno Agreement Establishing an International Classification for Industrial Designs (1996) Madrid Agreement Concerning the International Registration of Marks (1989) Nice Agreement Concerning the International Classification of Goods and Services for the Purpose of the Registration of Marks (1994) Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) (2001) International Convention for the Protection of New Varieties of Plants Berne Convention for the Protection of Literary and Artistic Works (1992) Universal Copyright Convention (1992) Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication
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24. Foreign Trade Law of the People’s Republic of China 25. Regulations of the People’s Republic of China on Administration of Import and Export of Technologies 26. Catalogue of Technologies the Import of Which is Prohibited or Restricted
National Intellectual Property Strategy This outline is formulated for the purpose of improving China’s capacity to create, utilize, protect and administer intellectual property, making China an innovative country and attaining the goal of building a moderately prosperous society in all respects.
I. Preface (1) Since the reform and opening up policy was introduced, China has maintained a sustainable and rapid economic and social development, and has made advances in science and technology and cultural creations, while the capacity for innovation has been constantly improved, and knowledge is playing an increasingly prominent role in China’s economic and social development. China is now experiencing a new historical beginning, and it is of great strategic importance for the country to develop and utilize knowledge-based resources in order to transform the pattern of economic development, ease the constraints posed by demand for resources and environmental concerns, improve the nation’s core competitiveness and meet the increasing material and cultural demands of the people. (2) Intellectual property system is a basic system for developing and utilizing knowledge-based resources. By reasonably determining people’s rights to certain knowledge and other information, the intellectual property system adjusts the interests among different groups of persons in the process of creating and utilizing knowledge and information, encourages innovation and promotes economic and social progress. In the world today, with the development of the knowledge-based economy and economic globalization, intellectual property is becoming increasingly a strategic resource in national development and a core element in international competitiveness, an important supporting force in building an innovative country and the key to hold the initiative in development. The international community attaches greater importance to intellectual property as well as innovation. Developed countries take innovation as the main impetus driving economic development, and make full use of the intellectual property system to maintain their competitive advantages. Developing countries actively adopt intellectual property policies and measures suitable for their respective national conditions to promote development. (3) With years of development, China has been gradually improving its system of laws and regulations on intellectual property and constantly strengthening the enforcement level. Meanwhile, the intellectual property quantity has
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increased rapidly and their performance has constantly improved. Market entities have also made steady progress in improvement of their capacity to utilize intellectual property. China has expanded international exchanges in the field of intellectual property and increased its influence in international intellectual property affairs. The establishment and implementation of the intellectual property system have helped standardize China’s market order, stimulated inventions and cultural creations, promoted China’s opening up and importation of knowledge resources, and played an important role in China’s economic and social development. However, China’s intellectual property regime still needs improvement. The quality and quantity of the self-relied intellectual property still cannot meet the demands of economic and social development; the public awareness of the importance of intellectual property is comparatively weak; the capacity of market entities to utilize intellectual property is not very strong; infringement of intellectual property is still a relatively serious problem; there are still some cases of abuse of intellectual property; the intellectual property service and support system and training for all types of intellectual property personnel lag behind its development; and the role of intellectual property in promoting economic and social development needs to be strengthened. (4) Implementing the national intellectual property strategy to greatly promote China’s capacity in creation, utilization, protection and administration of intellectual property will help improve China’s capacity for independent innovation and aid in efforts to make China an innovative country. It will also be conducive to improving China’s socialist market economy, standardizing market order and encouraging the society to be more creditworthy. It will also increase the market competitiveness of Chinese enterprises and strengthen the core competitiveness of the country. Finally, it will facilitate China’s opening up further to the outside world, thereby leading to a win-win situation between China and the rest of the world. We must implement this intellectual property strategy as an important national strategy and we must step up efforts in the area of intellectual property.
II. Guiding Principles and Strategic Goals 1. Guiding principles (5) In implementing the national intellectual property strategy, we need to follow the guidance of Deng Xiaoping Theory and the important thought of ‘‘Three Represents’’, comprehensively apply the Scientific Outlook on Development and abide by the policy of encouraging creation, effective application, legal protection and scientific administration. We must concentrate our efforts to improve the intellectual property system, actively work to create a favorable legal environment, market environment and cultural environment for the
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development of intellectual property in order to greatly improve China’s capacity to create, utilize, protect and administer intellectual property. This will provide strong support for the effort to make China an innovative country and develop a moderately prosperous society in all respects. 2. Strategic goals (6) By 2020, China will reach a high standard in terms of the creation, utilization, protection and administration of IPR. The legal environment for IPR will be much better, market entities will become much better at the creation, utilization, protection and administration of IPR, the public awareness of intellectual property will be increased greatly, the quality and quantity of the self-relied intellectual property will be able to effectively support the effort to make China an innovative country, the role of the intellectual property system in promoting economic development, the culture prosperity and social progress in China will become very apparent. (7) Goals for the next five years: – The level of self-relied intellectual property will be raised by a large margin and the quantity of intellectual property will be greater. China will rank among the advanced countries of the world in terms of the annual number of patents for inventions granted to the domestic applicants, while the number of overseas patent applications filed by Chinese applicants should greatly increase. A number of world-famous brands will emerge. The proportion of the GDP accounted for by the value of core copyright industries will greatly increase. China should own the rights to a number of high-quality new varieties of plants and high-level layout-designs of integrated circuits. Trade secrets, geographical indications, genetic resources, traditional knowledge as well as folklores will be effectively protected and reasonably utilized. – The benefits of utilizing intellectual property rights (IPR) will be increased significantly and the proportion of products rich in IPR should grow significantly. Enterprises should make progress in improving their system for managing intellectual property, invest more in the area of intellectual property and signifi cantly improve their capacity to utilize intellectual property in market competition. A number of preponderant enterprises with famous brands, core intellectual property and rich experience in utilizing the intellectual property system will emerge. – The protection of IPR will be significantly improved. Infringement of IPR, such as piracy and counterfeiting, should be significantly reduced, the expense of protecting intellectual property right will decrease a great deal and abuse of intellectual property should be effectively curbed. – The awareness of the IPR in society, especially among market entities, will be greatly enhanced and a favorable intellectual property culture should be basically formed.
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III. Strategic Focuses 1. Improving the intellectual property regime (8)
Laws and regulations concerning IPR need to be improved. Special intellectual property laws, such as the Patent Law, Trademark Law and Copyright Law, and related regulations need to be promptly revised. Legislation concerning genetic resources, traditional knowledge, folklores and geographical indications should be formulated as needed. The uniformity and coordination of intellectual property legislation need to be strengthened to improve the practicability of laws and regulations. Intellectual propertyrelated provisions contained in laws and regulations concerning unfair competition, foreign trade, science and technology and national defense need to be improved. (9) The intellectual property law enforcement and administration systems need to be strengthened. The judicial protection and administrative law-enforcement systems need to be strengthened, while judicial protection of IPR should play a leading role. The efficiency and level of law-enforcement need to be improved and public services need to be strengthened. The reform of the intellectual property administration system needs to be continued to establish a system that matches powers with responsibilities, divides work in a rational way, fosters scientific decision-making and ensures smooth enforcement and effective supervision. (10) The guiding role of intellectual property in economic, cultural and public policies needs to be strengthened. More efforts need to be adopted to improve coordination between intellectual property policy and the policies of industry, region, science and technology and trade. Intellectual property policy suitable for the development of relevant industries needs to be formulated to promote adjustment and optimization of industrial structures. Measures need to be taken in line with the different features of regional development to improve intellectual property support policy and foster economies suitable to the region and thus promote balanced regional economic development. Intellectual property working mechanism for important scientific and technological projects should be established to provide comprehensive services throughout the process with the focus on the acquisition and protection of intellectual property. Intellectual property policy related to foreign trade needs to be improved. The mechanisms for administering intellectual property, early warning and emergency response, overseas IPR protection and dispute settlement need to be established and strengthened in foreign trade sector. Coordination and uniformity between intellectual property policy and policies of culture, education, science and health need to be strengthened to safeguard the right of the public to legally and rationally utilize innovation findings and information in their cultural, educational, scientific and public health activities, promote the fair sharing of
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innovation and information, and ensure that the government is able to deal with public crises. 2. Promoting the creation and utilization of intellectual property (11) We need to guide and support market entities to create and utilize intellectual property through the use of policies related to finance, investment, government procurement, industrial development, energy and environmental protection. The guiding role of intellectual property policies in scientific innovation activities needs to be strengthened. Technological innovation will take legal industrialization as the basic precondition, and make the acquisition of IPR as its goal, with being accepted by the technical standards as its endeavor direction. The right ownership and benefit sharing mechanisms for scientific and technological inventions made as part of statesupported projects need to be improved. Indicators of IPR need to be included into the systems for assessing the implementation of scientific and technological plans and the performance of state-owned enterprises. The proportion of exportation of the goods rich in intellectual property need to be raised step by step, so as to promote the fundamental changes in the trade growth pattern and optimization of the trade structure. (12) We need to encourage enterprises to be the principal entity in the creation and utilization of intellectual property. Independent innovation is encouraged to acquire IPR and be commercialized and industrialized, and enterprises are guided to realize the market value of their IPR through rights transferring, licensing, pledging or other means. Higher education institutions and scientific research institutes need to be encouraged to play important roles in the creation of intellectual property. Some important technological areas should be chosen, in which a number of core self-relied intellectual properties and technical standards will be created. The public should be encouraged to take part in innovations and cultural creations. The creation of excellent cultural products will be promoted. 3. Strengthening the protection of IPR (13) Revise laws and regulations to punish infringements on IPR and strengthen judicial punishment. Help right holders to improve consciousness and capacity to protect their own interests. Lower the cost of right enforcement. Increase the cost of infringements. Curb infringements effectively. 4. Preventing abuses of IPR (14) Formulate relevant laws and regulations to reasonably define the scope of intellectual property. Prevent abuses of intellectual property. Maintain fair market competition. Safeguard the public lawful rights and interests.
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5. Fostering a culture of IPR protection (15) Strengthen the knowledge propagation on intellectual property rights and increase the awareness of intellectual property rights in the whole society. Carry out the ordinary intellectual property right education extensively. Increase the intellectual property right content in the national promotion of the public moral culture and the national ordinary education in law. By advocating the moral concepts of being proud of innovation and honesty and ashamed of plagiarism and counterfeiting or cheating, the intellectual property right culture could be established throughout China, characterized by respect for knowledge, enthusiasm for innovation and creation, honesty and abidance with the law.
IV. Specific Tasks 1. Patents (16) Make advanced development plans according to the nation’s strategic needs in some sectors such as biology, medicine, information, new materials, advanced manufacturing, new energy, oceanography, resources, environmental protection, modern agriculture, modern transportation, aeronautics and astronautics, and to obtain a group of patents in these core areas of technology to support the development of China’s new and high technology industries. (17) Formulate and improve policies related to standards and to regulate the process of turning a patent into a standard. Enterprises and industry organizations should be supported in actively participating in the formulation of international standards. (18) Refine the system of service inventions and establish an interest distribution system that can both help stimulate service inventions and speed up exploitation of patented technologies. (19) Improve the patent examination procedure and the quality of examination according to the requirements for granting patents. Irregular patent applications need to be prevented. (20) Balance the need for patent protection and the need to protect public interest properly. While strengthening patent right protection in accordance with law, we need to improve the compulsory licensing system and make good use of exception provisions. We need to work out relevant policies that are rational to ensure that the public is able to obtain necessary products and services in a timely and sufficient manner whenever a public crisis happens.
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2. Trademarks (21) Protect the lawful rights and interests of trademark holders and consumers effectively. Strengthen our capacity to enforce the law and take strict measures for curbing counterfeiting and other infringements to maintain fair competition and good order in the market. (22) Support enterprises in carrying out their trademark strategies and encourage them to utilize their own trademarks in business activities. Enterprises should be encouraged to enrich the meaning of their trademarks, increase the added value and improve the reputation of their trademarks, and establish their well-known trademarks. Enterprises should also be encouraged to register their trademarks overseas, to protect rights and interests in their trademarks, and to participate in international competition. (23) Make full use of trademarks in the industrialization of agriculture. Market entities need to be helped to register and use their trademarks to improve the quality of their farm products, ensure food safety and raise the added value of their farm products and their competitiveness on the market. (24) Enhance the administration of trademarks. Efficiency of trademark examination needs to be improved, the time for examination needs to be shortened, and the quality of examination needs to be improved. Market rules need to be respected, and issues related to the determination of well-known trademarks, famous trademarks, well-known commodities, famous-brand products and high quality brands need to be resolved. 3. Copyrights (25) Assist the development of copyright-related industries such as the press and publication, radio, film, television, literature and the arts, cultural entertainment, advertising design, arts and crafts, computer software and information networks. We need to support the creation of works with clear national features and characteristics of the times. We need to assist in the creation of excellent cultural works that that have difficulties in market competition. (26) Further improve relevant systems to promote the commercialization of copyrights. Systems for copyright mortgage recordation of works and transfer contracts need to be further improved to broaden the ways of copyright utilization and reduce the costs and risks involved in copyright transactions. The roles of copyright collective administration organizations, industrial associations, agencies and other intermediary organizations need to be brought into full play in the process of commercializing copyrights. (27) Deal with piracy according to law. Intensify the punishment against piracy, focusing on curbing the large-scale production, selling and dissemination of pirated products to effectively reduce copyright piracy.
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(28) Adopt effective measures to address challenges brought about to copyright protection by the development of the Internet and other new technologies. Properly balance the need for copyright protection and the need for information dissemination. We must protect copyrights in accordance with law while at the same time promoting the dissemination of information. 4. Trade secrets (29) Guide market entities in establishing a trade secret management system in accordance with law. The behavior of stealing trade secret should be severely punished in accordance with law. Properly balance the need for protecting trade secret and the freedom to choose employment and balance noncompetition undertaken by insiders and the need for normal personnel flow to safeguard employees’ lawful rights and interests. 5. New varieties of plants (30) Establish an incentive mechanism to support the cultivation of new varieties of plants and to facilitate the transformation of innovation findings in breeding into new plant variety rights. A number of breeding bases holding rights in new varieties of plants need to be established. Technology support systems related to new varieties of plants needs to be set up and improved. The work of formulating the guidelines for the conduct of tests of new varieties of plants needs to be expedited. The examination and testing level needs to be raised. (31) Adjust in a rational manner the balance of interests among resource suppliers, breeders, producers and business operators, with the emphasis on the protection of lawful rights and interests of farmers. Strengthen the awareness of the need to protect the new plant variety rights among breeding bases and farmers to ensure that the variety rights owners, producers and sellers of new varieties and farmers are all benefited. 6. Intellectual property in specific areas (32) Improve the protection system for geographical indications. A system of technical standards, a quality guarantee system and an examination system for geographical indications need to be established and strengthened. A thorough survey of geographical indication resources should be carried out and support given to products of geographical indications to promote the transformation of natural and humanistic advantages with regional characteristics into practical productivity. (33) Strengthen the protection, development and utilization systems for genetic resources to prevent loss and inappropriate use of them. Balance interests
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between the need to protect genetic resources and the need to develop and utilize them, and to develop a reasonable mechanism for genetic resource access and benefit sharing. We must guarantee the right of prior-informed consent enjoyed by suppliers of genetic resources. (34) Establish a sound protection system for traditional knowledge. Support the collation and passing down of traditional knowledge to further its development. A coordination mechanism for administration, protection and utilization of IPR for traditional medicine needs to be improved and the protection, development and utilization of traditional arts need to be strengthened. (35) Strengthen the protection of folklores and to promote their development. Extensively gather folklores and set up a benefit sharing mechanism that will assure a reasonable balance between conservators of folklores and those who use those resources to create new works, in order to protect the lawful rights and interests of individuals and communities. (36) Make the utilization of exclusive rights for layout-designs of integrated circuits more effective and thus promote the development of the integrated circuit industry.
7. IPR related to national defense (37) Establish a unified coordination and administration mechanism for intellectual property related to national defense, particularly focusing on the resolution of major issues such as ownership and benefit distribution, compensation for use, incentive mechanism and effective exploitation of technologies in emergencies. (38) Improve the administration of intellectual property related to national defense. The administration of intellectual property needs to cover all links in national defense, including research, production, operation, equipment procurement and guarantee, and project management, and control of major intellectual property related to national defense should be strengthened. A guideline to key technologies needs to be published. A number of the selfrelied intellectual property in areas such as key technologies for weapons and military equipment and high technologies for both military and civilian purposes should be created. An early warning mechanism for intellectual property related to national defense needs to be established, and special examinations of IPR related to national defense should be carried out in military technology cooperation and arms trade. (39) Make more effective use of intellectual property related to national defense. The rules for keeping secrecy and declassification of intellectual property related to national defense need to be further improved. Promote the use of intellectual property related to national defense for civilian purposes with the condition that national security and the interests of national defense are not
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compromised. Encourage the use of intellectual property for civilian purposes in the area of national defense.
V. Strategic Measures 1. Increasing the capacity to create intellectual property (40) Establish a market-oriented system for the creation of self-relied intellectual property with enterprises as the backbone of the system and manufacturers, universities and research institutes as close cooperation partners. Enterprises need to be guided to search intellectual property information before starting their own research and development projects or business operations. Enterprises need also be supported in their efforts to form the self-relied intellectual property and strengthen their capacity to transform innovations into intellectual property through original innovation, joint innovation and secondary innovation based on imported technologies. Enterprises as well as other market entities should also be encouraged to obtain intellectual property overseas. Enterprises need to be guided to change the way they compete, improve technological innovation, raise the quality of their products and services and create their own well-known brands.
2. Encouraging the commercialization and utilization of IPR (41) Guide more innovative elements towards enterprises, support the commercialization of innovations made by high education institutions and research institutes to enterprises, stimulate the application and industrialization of intellectual property in enterprises, and shorten the time for applying it in industrial production. We need to launch various kinds of pilot or demonstration projects for intellectual property, and to improve the overall capacity to utilize intellectual property and handle competition in intellectual property. (42) Encourage and support market entities to improve their management systems for technological data and trade secrets, and to establish a value assessment, a statistics and an accounting system for intellectual property. They are also encouraged to work out an information search system for intellectual property and an early-warning system for major events, and improve the system for administration of intellectual property in foreign cooperation. (43) Encourage market entities to actively respond to intellectual property infringements and lawsuits in accordance with law, and to improve their capacity for handling intellectual property disputes.
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3. Expediting the development of the legal system for intellectual property (44) Establish a legislation mechanism in line with the characteristics of intellectual property, improve the quality of legislation and speed up the legislation process. Improve foresight studies before intellectual property legislation is formulated and the assessment work after enactment. Legislation needs to be more transparent, and more channels need to be available for enterprises, industrial associations and the public to participate in legislation. Revisions and legislative interpretations of intellectual property laws need to be improved in order to deal with new problems in the intellectual property sector promptly and effectively. Studies on the necessity and feasibility of formulating basic intellectual property laws need to be carried out.
4. Improving intellectual property law enforcement (45) Improve the trial system for intellectual property, optimize the allocation of judicial resources and simplify remedy procedures. Studies need to be carried out on establishing special tribunals to handle civil, administrative or criminal cases involving intellectual property. Studies also need to be done to reasonably centralize jurisdiction over cases involving patents or other cases of a highly technical nature, and issues on setting up courts of appeal for cases involving intellectual property explored. Judicial organs for handling cases involving intellectual property need to be further strengthened and well-staffed to improve the handling of cases and enforcement of the law. (46) Judicial interpretation on intellectual property needs to be improved. Cases involving intellectual property require more professional knowledge, and therefore a sound litigation system needs to be established that includes judicial authentication, expert witnesses and technical investigation, and the system of provisional measures prior to action involving intellectual property needs to be improved. Procedures for determining and granting patent or trademark rights need to be reformed, and studies need to be conducted on transforming bodies that hear patent invalidation and trademark review and adjudication cases to quasi-judicial organs. (47) Improve the overall competence of intellectual property law-enforcement personnel and reasonably distribute law-enforcement resources to improve the efficiency of law enforcement. Special, well-planned and focused actions for the protection of intellectual property should be launched in cases of repeated intellectual property infringements, organized intellectual property infringements and large-scale counterfeiting and piracies. Administrative law-enforcement departments need to speed up the referral of criminal cases involving intellectual property to judicial organs, and judicial organs should make greater efforts to receive criminal cases involving intellectual property.
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(48) Customs law enforcement and border protection of intellectual property need to be strengthened to maintain order in import and export and improve the reputation of China’s export commodities. International cooperation in customs law enforcement needs to be fully utilized in order to effectively crack down on cross-border illegal acts and crimes involving intellectual property. Customs need to have an influence on international intellectual property protection.
5. Strengthening the administration of intellectual property (49) Formulate and implement regional and industrial strategies on intellectual property. A mechanism for reviewing intellectual property for important economic events needs to be established and strengthened. Projects for creation and industrialization of the self-relied intellectual property that meet the demand of economic and social development need to be supported. (50) More human resources are needed to administer intellectual property, professional training needs to be enhanced so as to raise the competence of personnel needs. People’s governments at or above the county level may establish intellectual property administration departments in line with their respective economic and social development. (51) The systems for examination and registration of intellectual property need to be improved to increase capacity building, optimize procedures, improve efficiency, reduce administrative cost and upgrade the level of public services involving intellectual property. (52) Develop a national public service platform for basic information on intellectual property. High-quality databases of basic intellectual property information should be developed that include patents, trademarks, copyrights, layout-designs of integrated circuits, new varieties of plants and geographical indications. Accelerate the development of a common search system suitable for Chinese search methods and habits. Agencies to test and preserve new varieties of plants need to be improved. An information platform for intellectual property related to national defense needs to be established. Guide and support the development of intellectual property information databases in various regions and sectors that meet their own needs. Intellectual property system and resource integration and information sharing need to be promoted. (53) Set up an intellectual property early-warning and emergency-response system. Issue report on intellectual property development trends in important sectors and work out contingency plans for disputes, conflicts or emergency situations on intellectual property that have a wide-ranging and significant impact, so that they can be dealt with in proper way and any potential damage can be controlled or reduced.
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6. Developing intermediary services for IPR (54) Improve the administration of intellectual property intermediary services, make it a self-regulated industry, and establish a system for monitoring such services, including credit information management, reputation assessment and punishment recording. The practice for IPR appraisal needs to be further regulated to increase its credibility. (55) Establish a professional training system for intellectual property intermediary services, improve vocational training in intermediary services and standardize the administration of professional qualifications. The scope of services for an intellectual property agent and other employees in intermediary services needs to be clearly defined and studies on general lawyers acting as intellectual property agent need to be conducted. An intermediary service system for intellectual property related to national defense needs to be improved. Great efforts need to be made to improve the capacity of intermediary services to handle international applications for intellectual property, settle disputes and participate in international intellectual property affairs. (56) Strengthen the role of industrial associations and support their intellectual property work, promote intellectual property information exchange and organize a joint effort to enforce IPR. The government should strengthen its supervision and guidance in the intellectual property work of industrial associations. (57) The role of the technology market needs to be strengthened and an intellectual property trading system needs to be established, which provides sufficient information, allows active trading and has an orderly environment. Trading procedures need to be simplified; the cost of trading needs to be reduced and services need to be improved. (58) Develop commercial intellectual property information services to meet the demands of all relevant parties for intellectual property information. All sectors of society are encouraged to invest in the development of intellectual property information and enterprises are encouraged to participate in the development and utilization of intellectual property information with potential added value. 7. Developing intellectual property human resources (59) Establish an interdepartmental coordination mechanism and make overall plans for the development of intellectual property human resources. Establishment of national and provincial intellectual property expert databases and professional information networks needs to be accelerated. (60) Set up national education bases to train intellectual property professionals. The training of senior intellectual property tutors needs to be accelerated. A sub-discipline program on intellectual property should be set up and the
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higher education institutions which meet the requirements are supported to establish programs for conferring intellectual property master’s and doctor’s degrees. Large-scale training programs need to be organized to train all types of intellectual property professionals, focusing on training of urgently needed management personnel and personnel to provide intermediary services involving intellectual property. (61) Work out training plans to provide comprehensive training on intellectual property to Party and government leaders, civil servants, managers of enterprises and institutions, technical and professional staff, writers and artists, and teachers. (62) Improve relevant systems for attracting, exploiting and managing intellectual property professionals, improve the human resources structure and encourage reasonable mobility of personnel. In view of the implementation of the Civil Servant Law, we need to improve the civil servant administration system in intellectual property administration departments. A professional and technical assessment system for intellectual property professionals needs to be established in accordance with the overall requirements of the reform to the professional titles system of the State. 8. Promoting the cultivation of an intellectual property culture (63) Set up a working mechanism for publicizing information about intellectual property that is led by the government and supported by the media, in which the public widely participates. The coordination mechanism needs to be improved and relevant policies and working plans need to be formulated to promote public awareness of intellectual property and the development of an intellectual property culture. (64) Offer intellectual property courses in higher education institutions and to introduce education on intellectual property into the quality-based education to students of such institutions. A general education plan on intellectual property needs to be formulated and implemented, and intellectual property education needs to be listed into teaching plans in primary and high schools nationwide. 9. Expanding international exchanges and cooperation in intellectual property (65) Strengthen international exchanges and cooperation in the field of intellectual property. An international information exchange mechanism for intellectual property needs to be established and strengthened. International and regional cooperation needs to be strengthened in the development and utilization of intellectual property information resources and infrastructure. Encourage international cooperation on training of intellectual property professionals.
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Students studying overseas under State-financed projects are guided to pursue programs related to intellectual property, whereas those funded otherwise are encouraged to do so. Highly talented intellectual property professionals should be introduced from overseas and employed in China. China needs to actively participate in the development of international intellectual property order and effectively involve itself in undertakings of international organizations.
Glossary of Terms
AIC
Administration of Industry and Commerce
IPR
Intellectual Property Rights
MOC
Ministry of Commerce
NCA
National Copyright Administration
PCT
Patent Cooperation Treaty
PSB
Public Security Bureau
R&D
Research and Development
RFID
Radio-frequency identification
SAIC
State Administration for Industry and Commerce
SIPO
State Intellectual Property Office
TMO
Trademark Office
TRIPS
Agreement on Trade Related Aspects of Intellectual Property Rights
TSB
Technical Supervision Bureau
WIPO
World Intellectual Property Organization
WTO
World Trade Organization
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