12. The representative of China, briefing the Council on China's implementation of the TRIPS Agreement and the relevant commitments since its last review, said that China had taken only two decades to establish an advanced intellectual property legislation framework, administrative network and enforcement mechanism, including the ratification of major international treaties and conventions for IPR protection. On average, this had taken developed economies over one hundred years to build up. Without the consistent efforts of the Chinese Government, it would have been impossible to fulfil this mighty task in such an efficient and effective way. China was fully aware that transparency and enforcement were essential to put the functions of a well-built IP legal system into full play. The Chinese Government had set up a national level IPR protection working group consisting of all judicial and administrative enforcement authorities involved in IPR protection. With concrete results achieved since August 2005, a one-year-long special campaign across the country for strengthened IPR protection had been further extended by the State Council to the end of this year.
13. Recognizing the legitimate concerns and the enormous interest of foreign governments and companies in China's IPR protection, the Chinese Government had built a new mechanism for regular communication and consultation with foreign-invested enterprises and trade associations, as well as with the governments of the Members concerned. He said that China had always attached great importance to the protection of intellectual property rights and had fulfilled its international commitments in a serious and positive manner. IPR protection was not a passive response to fulfil China's accession commitments, but resulted from an intrinsic need to foster a sound environment for trade, investment and R&D in China, which would help to keep the rapid economic development of China more sustainable. China spared no effort in establishing a strong and effective IPR protection system which was in the interest of both China and other WTO Members. However, given the long journey to go before China could have a highly advanced IP protection system, as mentioned in the beginning of the statement, China hoped that Members would view the IPR situation of China from a more developmental and realistic perspective and continue their support and assistance during the process of improvement.
14. He said that, prior to the meeting, China had prepared a document containing the information requested by Annex 1A of China's Accession Protocol (IP/C/W/460), and also the 2005 White Paper on the New Progress in China's Protection of Intellectual Property Rights, which had been made available as a room document. He hoped that these documents would put together a complete picture for Members to better understand the measures and achievements of China on IPR protection.
15. Turning to the responses to the written questions received from some Members, he said that there were three important cross-cutting issues regarding these questions. First, for all the statistical data falling within China's WTO obligations, he requested Members to refer to the information provided under Annex lA prior to this meeting. There was, however, some information that China was unable to provide or would not provide due to legitimate reasons. He said that he would be happy to seek ideas from some of the Members after the meeting to learn how they compiled in their own countries some of the data, that they had asked from China.
16. Secondly, he reminded Members that questions should merely focus on the review of China's implementation of its WTO obligations during the past year, rather than seek a preview of China's performance in the years to come. He said that his delegation was unable to respond to questions purely speculating on future events under this mechanism.
17. Thirdly, he said that during the past four years of this review, his delegation had found an increasing number of questions not relevant to TRIPS from some Members. This had made the list of questions longer, but less relevant to the TRIPS Agreement or China's accession commitments. He requested these Members to re-assess the nature of those questions and to find a more appropriate forum for their discussion, e.g. bilateral consultations or the ongoing DDA negotiations.
18. Turning to answering relevant questions in detail, he said that the blame laid on China by some Members for being one of the top producers and exporters of counterfeit and infringing automotive parts was groundless. Notwithstanding, China's national IP protection working group had received some complaints about automotive parts counterfeiting and other infringements in some local areas, and had held a meeting in September 2005 to tackle the issue by requiring local governments to crack down on those illegal activities.
19. He encouraged Members to log onto official websites of the local governments to obtain local IPR "White Papers" and action plans on intellectual property or obtain them from the foreign affairs office or department of the local government.
20. Regarding administrative procedures that imposed requirements such as consularization/notarization of evidence from a foreign country, which was not necessarily on foreigners but on foreign evidence, China believed that those requirements were fair and reasonable, and consistent with WTO principles and the TRIPS Agreement.
21. In response to the request put to China by one Member to share the IP protection and enforcement provisions under discussion in its ongoing FTA or bilateral negotiations, he said that his delegation saw no legitimate reason or right behind this request. His delegation would like to request that Member to share the provisions under discussion in the Member’s own ongoing bilateral or FTA negotiations after the meeting if possible.
22. In response to the question on the steps China was considering in order to accelerate the involvement of foreign associations in China's IPR environment, to encourage Chinese-foreign associations and to expand the scope of operations of foreign associations in China, he said that this was a question irrelevant to TRIPS and the transitional review.
23. Pursuant to the terms of its WTO accession, China had made great efforts to revise its legislative regime for all substantive IPRs, which had been and should be fully recognized by Members. However, he reminded Members that not all laws and regulations in China had to be revised and urged them to be more patient. When deemed necessary, further amendment of laws and regulations would take place in China, but that may not be done as abruptly as some Members had expected. Regarding the protection of copyright in certain fields, such as information networks, which was not covered by TRIPS yet, he asked Members to refer to the relevant provisions in the Copyright Law promulgated in 2001.
24. He said that the information regarding the Chinese National IPR Strategy could be found at www.nipso.cn.
25. Regarding the questions on private investigative firms, he referred Members to China's response at the last TRM, as China's position had not changed since then.
26. As to whether freight forwarders, distributors and landlords could also be subject to criminal liability in IPR cases, he said that that this depended on whether their activities constituted elements of a crime committed under the relevant laws and regulations. This response also pertained to similar questions on the percentage of IPR infringement cases transferred to criminal enforcement.
27. He said that the percentage of IPR infringement cases transferred to criminal enforcement had nothing to do with cost-recovery limitations either. However, some copyright infringements transferred to criminal procedures were defined as illegal operation crimes instead of IPR infringements, which certainly affected the statistical results, as some Members had mentioned in their written questions.
28. Regarding the request form one Member for China's administrative agencies to publish all administrative decisions, China had already expressed the view during the last TRM that this was not a legitimate request under the TRIPS Agreement or under China's other commitments, and China had no obligation to do so. He also confirmed that China's administrative agencies were providing written decisions with explanations for their enforcement decision and that their practice had improved during past years.
29. He confirmed that the General Administration of Customs was jointly working with the Ministry of Public Security to draft guidelines on criminal cases, arising from Customs seizure of infringing products in international trade. Setting standards for arrest was not the mandate of the Ministry of Public Security as one Member had put it, but the responsibility of the National People's Congress as well as the responsibility of the Supreme Court and the Supreme Procuratorate.
30. Regarding the question No. 21 from the USA, he said that China had no new information to provide since the last review.
31. Regarding the relationship between "identical" and "similar" trademarks, as defined in Chinese laws, he said that this relationship was the same as interpreted in the TRIPS Agreement. Regarding administrative penalties imposed in cases where registered trademarks were used on "similar goods", he confirmed that the understanding of the Member concerned was correct. He also confirmed that not only administrative penalties were applicable in cases of service marks infringement.
32. He said that, in view of the difference in nature between administrative and criminal liability, the judicial interpretation promulgated in December 2004 did not stipulate a relationship between the number of administrative violations and criminal liability. The offender would only be prosecuted under criminal liability when the degree of violation reached the statutory standard for criminality. Since a well-known mark was a type of registered mark with a higher commercial value, its infringement would cross the line of criminality more easily. In this connection, setting no specific provision for well-known marks would not hamper its protection by the criminal code. According to the judicial interpretation promulgated in December 2004, the three-times standard was an elevated one compared to the relevant provisions for illegal publications, rather than a more relaxed one as some Members had alleged in their questions. The mention of "illegal income" in the judicial interpretation was a follow-up provision of the criminal code, which China had no plans to amend.
33. For all the technical questions regarding the calculation of the value of counterfeit or pirated goods, he referred Members to the judicial interpretation issued jointly by the People's Supreme Court and the People's Supreme Procuratorate in December 2004. He said that the Chinese National People's Congress had no plans to amend the Criminal Code or other IP laws at this moment, although in-depth research and study in this field would continue.
34. Regarding elementary, high school and "State Plan" textbooks, he said that Article 23 of China's Copyright Law also applied to foreign right holders and that China had so far not received any complaints from any right holders.
35. Regarding China's implementation of Article 10.2 of the TRIPS Agreement, he referred Members to Article 14 of China's Copyright Law. Regarding censorship standards and procedures, content review processes and the import and distribution regulations of audiovisual products, he asked Members to convey these TRIPS non-relevant concerns to the competent committees or councils in the WTO, for example the Committee on Market Access.
36. Regarding the legal requirements on upper thresholds of statutory damages or the duration of prescription of administrative punishment stipulated by the Chinese law, he said that China believed that these were not inconsistent with the TRIPS Agreement. The laws concerned had been made and promulgated in the context of the situation in China and China had no plan to change them at this moment.
37. He said that fines for penalties for the infringement of copyright were decided by the judicial authorities, based upon the facts of the case, which was consistent with principles of the TRIPS Agreement.
38. Regarding protecting the legitimate owners of trademarks against unauthorized third-party applications, he referred Members to Articles 13, 14, 30, 31 and 41 of the Trademark Law.
39. He said that as of the end of 2004, it had taken, on average, 20 months from the date of a trademark application to the date of a decision made by the examiner.
40. He said that in 2004, 153 well-known trademarks had been recognized by (a) administrative proceedings at the CTO; (b) the Trademark Review and Adjudication Board (TRAB); or (c) any other administrative agency, 28 of which were foreign trademarks. In 2005, 79 such marks had been recognized, among which 5 were foreign well-known trademarks under the CTO.
41. Regarding brands that were the subject of anti-piracy efforts in each city, he asked Members to log on to the official websites of the cities concerned, such as www.baic.gov.cn in Beijing and www.sgs.gov.cn in Shanghai. In order to place their brands on the anti-piracy lists, companies could submit their applications to the relevant local authorities, such as those in Shanghai or Beijing.
42. Regarding the potential legal responsibility of the landlord in certain cases, he referred Members to Article 50.2 of the implementing regulations of the Trademark Law. China's Trademark Law provisions on the infringement of trademarks were also applicable to operators of wholesale and retail markets nationwide. As regarded notices on anti-piracy efforts issued in Beijing and Shanghai, he said that no other cities in China had plans to issue similar notices at this moment.
43. He said that, in conformity with China’s accession commitments, the relevant rules of the State Administration of Industry and Commerce of China and the Administration for Quality Supervision, Inspection and Quarantine (AQSIQ) provided protection for GIs. The amendment of the Trademark Law in 2001, as agreed to in the accession report, contained a specific provision on the protection of GIs.
44. Regarding the detailed procedures of application for the recognition of a well-known mark, he referred Members to the www.ctmo.gov.cn, as well as to the provisions on the recognition and protection of the well-know trade marks.
45. He confirmed that China was not drafting and had no plan to draft a "highly well-known marks" pamphlet.
46. Regarding allegedly design-infringing goods displayed at an exhibition, he said that, although such an act of display would not immediately be deemed as a violation of Article 11 of the Chinese Patent Law, the act of making, prior to the act of display, could be considered a violation of the design right, i.e. a violation of Article 11.
47. He confirmed that Article 12 of the Chinese Patent Law conferred on the patentee the right to grant licences, regardless of whether the patentee was a foreign or a Chinese company.
48. He confirmed that the Standing Committee of the National People's Congress had no plans to amend legislation to provide additional protection for products, the marketing of which required an authorization.
49. Regarding novelty, he said that the current Chinese laws and regulations regarding the novelty requirement were consistent with the TRIPS Agreement and China had no plans to amend them.
50. Regarding the powers of administrations, he said that the copyright, trademark and patent laws all had specific provisions in this regard. In an effort to provide adequate remedies for IPR holders and to provide significant deterrents to violators, the different administrations executed their powers in compliance with the laws governing them. According to the Chinese Patent Law, the patent administrative authorities did not have the power to impose sanctions such as confiscation or fining the patent infringer. Pursuant to Article 53 of the Trademark Law, once the Administration for Industry and Commerce had determined that the fact of infringement had been established, it was obliged to order the infringer to immediately cease the infringing activity and to confiscate and destroy the goods involved, the tools used to manufacture these goods and counterfeit representations of registered trademarks and could also impose a fine. These provisions were in complete compliance with the TRIPS Agreement. In actual enforcement, administrations at all levels penalized the acts of trademark infringement by strictly following the law. This was a significant deterrent to the infringers. There was no provision on confiscating illegal income and revoking commercial licences in the trademark law or its implementing regulations.