27. The representative of China said that, prior to the Council's meeting, China had submitted to the TRIPS Council the information required by Annex 1A to the Protocol on Accession. In order to ensure a better understanding of the status of protection of intellectual property rights (IPRs) in China, her delegation had also made available to the meeting, as a room document, a White Paper on "Intellectual Property Protection in 2002 in China". This paper presented a detailed and updated account of the developments with regard to the IPRs in China, covering patents, trademarks, copyright, new plant varieties, etc. A considerable part of the report was devoted to the efforts and achievements in regard to the enforcement of IPR legislation by the relevant government authorities. She said that these two documents provided Members with a comprehensive and objective picture on the implementation of TRIPS-related commitments by China, and also served as a useful source of information to address some of their concerns.
28. She said that a large volume of questions had been posed to China in the context of the transitional review mechanism (TRM). While wishing to ensure that the questions would be dealt with in the most responsible and serious manner, she pointed out that the communications from some Members had reached her delegation only very recently, leaving China with little time for necessary preparation. She said that China attached great importance to IP protection and the TRM in the TRIPS Council. A strong team had been put together with officials and experts from various departments, including the Ministry of Commerce, State Administration of Industry and Commerce, National Copyright Administration, State Intellectual Property Office, and the Legal Affairs Office of the State Council. She said that their presence was intended to improve the quality of information exchange with Members.
29. Turning to the comments made and questions posed to China, a second representative of China said that his delegation was grateful that some Members had commented on the IP protection regime in China. He found this to be constructive. It was the belief of the Chinese Government that enhancing IPR protection was a long-term course of action with strategic significance. Since the beginning of the 1980s, China had gradually established an excellent IPR legislation and enforcement mechanism. In China's Criminal Law, there were specific provisions on IPR crimes. China had also set up special IPR courts to hear cases involving IPR infringements. China had modified its laws and regulations in relation to IPRs, making them compatible with international conventions, including the TRIPS Agreement. He said that the Chinese Government would fulfil its commitment to further improve its IPR system, fully implement various IPR laws, upgrade IPR protection with adequate measures to keep pace with international standards, and create a sound legal environment for the introduction of foreign advanced technologies, funds and management skills. At the same time, the Chinese Government would also implement effective IPR policies and strategies, reinforcing its efforts to boost technological innovation with IPR protection, strengthening IPR administration and guiding all economic entities to enhance their competency in management, applications and protection of IPRs as well as the ability to meet international competition, and consequently improve the technological and comprehensive forces of China. The Chinese Government would, as always, pursue IP protection policy and effectively safeguard the legitimate interests of both Chinese and foreign right owners. China was willing to further cooperate and communicate with other Members on the basis of equality and mutual benefits.
30. As to the principle of transparency and notification obligations, he said that China respected this principle and, since its accession, had fully implemented its obligations in the light of the TRIPS Agreement and its accession commitments. Pursuant to Article 63.2 of the TRIPS Agreement, China had notified ten main dedicated laws relating to IPRs in full text and a series of laws and regulations in summary, including the Criminal Law, the Anti-Unfair Competition Law, and the Civil Procedure Law. Following the TRIPS Council's decision of 21 November 1995, China had also provided information on its enforcement regime in a notification of its responses to the Checklist of Issues on Enforcement. He said that China's IPR laws and regulations were characterized by their broad coverage and great quantity. A large volume of judicial interpretations and sub-national legislation had added to the complexity. The notification to the WTO and the provision of requested information had been a huge task, not the least of which was translation. As a developing Member, however, China would redouble its efforts to further improve the notification process while requesting the necessary assistance on translation according to Article 2.5 of the Agreement between the World Intellectual Property Organization and the World Trade Organization. As a major arm in IP enforcement, the judiciary departments in China were also subjected to the principle of transparency, which was evidenced by the public soliciting of comments for judicial interpretations. The Supreme People's Court would further broaden the scope of commenting in the course of interpretation. Meanwhile, all the TRIPS-related laws, regulations, and other regulatory documents would be published in the Chinese Foreign Trade and Economic Cooperation Gazette as well as the bulletins and the websites of the relevant government departments. Members could also access the enquiry point set up by the Chinese Government for interesting information.
31. Regarding the recent reorganization of the responsibilities in China for intellectual property matters, he said that there had been no changes to the responsibilities of China's IP agencies. The Bureau of Economic Crime Investigation under the Ministry of Public Security was responsible for the investigation of IP crimes. The Division of Economic Crime under the Supreme Procuratorate was responsible for the prosecution of IPR crimes. Number 2 Criminal Tribunal of the Supreme People's Court was in charge of IPR criminal cases. As to standards for IPR crimes, he said that two laws applied at the central and local levels, that is, the Interpretation on Specific Application of Law on Several Questions of Trial for Illegal Publication Criminal Cases by the Supreme People's Court and the Regulations on Standards for Initiating Cases In Economic Crimes by the Supreme People's Procruratorate and the Ministry of Public Security.
32. With respect to the consistency of China's administrative actions with Articles 41 through 49 of the TRIPS Agreement, he said that administrative responsibility must be imposed in accordance with the Administrative Penalty Law or the special provisions of the separate law. Some administrative remedies, such as orders requiring the suspension of infringing acts, were similar to civil remedies in form, but they were different in nature. In cases where the form of administrative remedies seemed to be similar to civil remedies, Articles 41 through 48 of the TRIPS Agreement should be applied to administrative remedies. Some civil remedies provided for in Articles 41 through 48, such as an order requiring the payment of damages to right holders, could not apply to administrative cases in China, since neither the Administrative Penalty Law nor the separate law granted such a power to administrative authorities.
33. The provisions on administrative enforcement in the Chinese trademark system complied with Article 49 of the TRIPS Agreement. The procedures were fair and equitable, including the rules on the presentation of evidence and decisions on the merits of the case in writing, etc. The form, legal basis and nature of administrative remedies were different from those of criminal remedies. Therefore, the Chinese administrative remedies could not be covered by Article 61 of the TRIPS Agreement. Nevertheless, China's criminal legal system met the requirements of Article 61.
34. The representative of China said that the revision of the Chinese Civil Law was an important task for legislators. The ninth National Congress had enacted and revised a draft code. Due to the rapid social and economic development in China, it was necessary to regulate and rewrite some contents of that draft. China needed to do further research and investigation on this matter.
35. China had made every effort to enhance its administrative transparency. This included two main aspects. First, the legislators had enacted the Legislation Law, the Regulations on the Drafting Procedure of Administrative Regulations, and the Regulations on the Drafting Procedure of Rules, which standardized the operating procedure of administrative power. Second, the Administrative Permission Law would be enforced in 2004. The Law further regulated the boundary, conditions and procedure of administrative permission. It provided that only laws, regulations and local regulations could establish administrative permission and local laws could establish interim administrative permission. However, the departmental rule of the State Council could not establish administrative permissions. Thanks to these laws and regulations, administrative transparency had been increasing remarkably and the efficiency of administration would be further promoted.
36. In regard to the relationship between laws, regulations and rules, he said that, according to the Legislation Law, the Regulations on the Drafting Procedure of Administrative Regulations and the Regulations on the Drafting Procedure of Rules, the efficacy of laws and regulations was prior to that of local legislation and departmental rules, and the efficacy of local regulations was prior to local administrative rules. Where local regulations conflicted with the regulations of the State Council, the National Congress had the authority to review them. When local rules conflicted with the departmental rules of the State Council, the State Council would be responsible for the review.
37. Regarding patent pendency he said that, in 2002, the State Intellectual Property Office (SIPO) had received 252,631 patent applications, including inventions, utility models and industrial designs, an increase of 49,048 over the previous year. The growth rate was 24.1 per cent. 951 international applications had been filed and 697 requests had been made for the international preliminary examination. 738 requests for the international preliminary examination had been completed.
38. To date, the State Food and Drug Administration (SFDA) had not found any application for drug registration which used undisclosed information. In regard to data exclusivity provided by the SFDA, he referred to the relevant regulations. Pursuant to Article 35.2 of the Rules on Implementation of Drug Law, the SFDA would not render a marketing approval pursuant to an application by taking advantage of other applicants' undisclosed information. Pursuant to Article 14 of the Measures on Regulation of Drug Registration, when putting forward an application for drug registration, the applicant should ensure that all data submitted had been obtained independently. Pursuant to Article 21 of the Measures on Regulation of Drug Registration, when putting forward an application for drug registration with foreign data being introduced, the applicant should provide the verification of the legal origin of data. Pursuant to Article 22 of the Measures on Regulation of Drug Registration, the SFDA was entitled to require applicants to repeat the test in order to ensure that the relevant data had been obtained independently. Pursuant to Article 52, during the period of new drug approval, the technical requirements for a new drug would not be lowered because the drug of the same class had received a marketing approval abroad, that is to say, the situation of documentation dependence did not exist. He further said that, pursuant to Article 35.2 of the Rules on Implementation of Drug Law, the SFDA would not render marketing approval to an application taking advantage of other applicants' undisclosed information. The SFDA had the obligation to protect the undisclosed test data obtained independently and other relevant data submitted by the applicant. Those illegally disclosing undisclosed data would be punished. The SFDA would accept a relevant application in accordance with Article 35.3 of the Rules on Implementation of Drug Law under the condition that measures had been taken, as the public interest required, to protect the data against unfair commercial use. He said that, besides Article 120 of the Civil Procedure Law and Article 48 of the Provisions Regarding Evidence in Civil Litigations, the other provisions of the Civil Procedural Law and other laws, such as the Law on Lawyers and the Law for Promotion of Science provided protection for confidential information during civil litigation.
39. Referring to paragraph 256 of the Report of the Working Party on the Accession of China, stating that China's IPR laws provided that any foreigner would be treated in accordance with any agreement concluded between the foreign country and China, or in accordance with any international treaty to which both countries were party, or on the basis of the principle of reciprocity, he said that China would observe the TRIPS Agreement, paragraph 256 of the Report of the Working Group on the Accession of China, and the terms in the international treaties or conventions China had signed and/or joined.
40. With respect to trademarks, he said that China had been protecting foreign well-know marks in the light of international conventions. In line with the Provisions on the Determination and Protection of Well-Known Marks, which had come into force on 1 June 2003, the municipal level administrative authorities for industry and commerce should, within 15 working days from the date of the acceptance of the request of the interested party, report and send all the documents to the provincial administrative authorities for industry and commerce, if the case satisfied the requirements under Article 13 of the Trademark Law. The provincial authorities should, within 15 working days from the date of acceptance of the request of the interested party, report and send all the documents to the Trademark Office (TMO). The TMO should make its determination within six months from the date of the receipt of the relevant documents. Although it had received some domestic and foreign requests for the determination of well-known marks, the TMO had not yet determined well-know trademarks under the new provisions.
41. Turning to the legal differences between the terms "well-known marks", "famous marks", "provincial famous marks", and "famous brands", he said that a well-known trademark referred to a mark that was widely known to the relevant sectors of the public and enjoyed a relatively high reputation in China. Relevant sectors of the public should include consumers of the type of goods and/or services to which the mark applied, operators who manufactured the said goods and/or provided the said services, and sellers and other persons involved in the channels of distribution of the type of goods or services to which the mark applied. The Chinese term "Zhuming shangbiao" (famous trademarks) referred to marks which were determined by the administrative authorities for industry and commerce at the provincial, municipal, or autonomous region level, based upon the local legislations, local government regulations or other administrative provisions, having a relatively high reputation and a greater influence within the specific jurisdiction. A provincial famous mark was the same as "Zhuming shangbiao". The Chinese term "You Ping Ming Pai" (famous brands) was not a legal term in the field of trademarks. The TMO never used this term. In addition, the TMO had used to have a list of marks for enhanced protection, which had been based upon the frequency and scope of trademark infringement However, this practice had been abolished.
42. With respect to the determination of famous trademarks, he said that the provincial or municipal authorities had the authority to make such decisions, and were not required to report to the TMO. Therefore, the TMO had no such information.
43. In regard to the protection of three dimensional marks and colour marks, he said that by the end of October 2003, the TMO had received 1398 three-dimensional mark applications, among which 343 had been approved for registration. For some technical reasons, the TMO had no statistics on colour marks. In addition, smell and sound marks were non-registrable under the Trademark Law.
44. With respect to the application of the transliteration or translation of others' marks, he said that transliteration or translation was one of the standards to determine identity or similarity. Thus, such applications could be refused during the trademark examination. Moreover, interested parties could file a request to the trademark review and arbitration bureau through the opposition or dispute procedure.
45. Article 15 of the Trademark Law provided that where the agent or representative of the owner of a mark applied for registration in his own name without the owner's authorization and the owner opposed the registration, the application should be refused and the use should be prohibited. This problem could be solved through the opposition or dispute procedure. The interested party could file an application with the TMO or the Trademark Review and Arbitration Bureau (TRAB). He noted that, by the end of September 2003, the number of pending cases in the TRAB was 31,924. The number of pending opposition cases at the TMO was 16,386. The pending new applications for registration at the TMO were 380,000.