68. Responding to questions in the third category concerning Patents, she said that China's patent system had adopted the first-to-file principle, granting the patent to the first applicant. If parties had disputes over the rights and interests concerning the ownership of the invention and creation, they could appeal to the People's Court according to the relevant provisions of the Patent Law. The revision of the Patent Law was under way. As regarded concrete amendments to the provisions, China was soliciting opinions on various aspects, and was therefore unable to predict the final results. Currently, China was not considering changing the provisions on the scope of patentability of software inventions.
69. According to Article 12 of China's Patent Law, any entity or individual exploiting someone else's patent had to conclude a written licence contract with the patentee for exploitation and pay a fee for the exploitation of the patent. Therefore, if the licensee did not pay the fee according to the contract, the patentee could appeal to the People's Court.
70. Regarding the two questions that had been posed on the protection of confidential information, she said that these questions were quite general, without pointing to a specific law or regulation, and that therefore China was unable to respond to these questions.
71. Responding to questions in the fourth category, concerning the Protection of Test Data for Pharmaceutical Products, she said that medicines should be registered in accordance with the Provisions for Drug Registration and that undisclosed information on clinical trials should be protected in line with the above-mentioned provisions, excluding information that had already been disclosed. Under the Measures of the Implementation of the Pharmaceutical Administration Law, China was committed to the protection of undisclosed information rather than to data protection and monopoly. Protection of undisclosed information took effect automatically and no form filing, authorization or record was needed. Its effectiveness depended on how people who had access to the information kept that information undisclosed. Therefore, there was no need to provide monopolistic data as was required under the relevant laws and regulations of some other WTO Members.
72. In accordance with the Administrative License Law and the Pharmaceutical Administration Law, the State Food and Drug Administration should base its approval on the pharmaceutical and clinical materials obtained by the applicants themselves, rather than on reference materials already disclosed or materials provided by other applicants. For medicines, whether domestically produced or imported, the exact same material requirements and review and examination procedures were applied and these did not constitute any discrimination at all.
73. According to the Provisions for Drug Registration, the State Food and Drug Administration should make decisions on review and approval based on the material submitted by applicants. In light of the universally applied Bolar exception, patent disputes arising during the review and approval procedures for drug registration were impossible to constitute a patent infringement.
74. Questions in the fifth category concerned Trademarks and Geographical Indications. On trademarks, she said that "famous brands", "renowned brands" and "export brands" were supporting measures initiated to lead and encourage enterprises to create famous brand products, to enhance product quality and managerial level and raise the overall quality level and competitiveness of China. In identifying well-known trademarks, the State Trademark Office and the Trademark Review and Adjudication Board would treat domestic and foreign trademark holders equally, without any discrimination or preference to Chinese trademarks. China's Trademark Law and Recognition and Protection of Well-Known Trademarks Provisions (2003) explicitly provided for objective standards for the recognition procedures of well-known trademarks. Detailed provisions were available on the website of the State Administration for Industry and Commerce (SAIC) at http://www.ctmo.gov.cn. In regard to the question of malicious application for foreign well-known trademarks, she referred Members to Article14 of the Trademark Law and Articles 3 and 10 of the Recognition and Protection of Well-Known Trademarks Provisions. The renown gained through publicity of the media such as the Internet was also one of the elements for consideration by the SAIC when recognizing well-known trademarks.
75. Article 31 of Trademark Law protected the "prior right" of trademarks with certain renown, yet short of the well-known trademark standard. According to the principles of territoriality of intellectual property rights, the Trademark Examination and Trial Standards restricted trademarks subject to "prior use" to those used in China.
76. For actions such as malicious application for or exploitation of well-known trademarks or influential trademarks already used, but not yet registered, the SAIC would take the following actions in the stages of examination, opposition and review: (1) In the stage of examination, except for some well-known trademarks with high popularity, the SAIC generally did not take the initiative to render protection and tended to settle the problem in the subsequent opposition and review stages. (2) In the stage of opposition, the right holder could file an opposition to the Trademark Office of SAIC if he thought the trademark which had passed the preliminary examination violated Article 13 or 31 of the Trademark Law. The trademark would not be approved for registration if the Trademark Office confirmed the opposition. (3) In the stage of review, disputes could be filed if the right holder thought the registered trademark violated Articles 13 and 31 of the Trademark Law. The Trademark Review and Adjudication Board would cancel the registered trademark if the dispute was confirmed.
77. With regard to similar goods and services, the State Trade Mark Office would look at the Similar Goods and Services Differentiation Table compiled by the State Trademark Office based upon the International Classification of Goods and Services for the Purposes of the Registration of Marks. For example, gloves belonged to Similar Group 2510 of Category 25 and scarf to the Similar Group 2511 of Category 25. According to the Table, goods of these two Similar Groups were not judged as similar. Therefore, when applying for a trademark for "gloves", where there were identical or similar registered trademarks or prior applications for "scarves" by someone else, such an application would be passed for preliminary review.
78. With regard to GIs, according to related regulations, a GI could be protected as a trademark, while other forms of protection were not excluded. In 2001, China had acceded to the WTO. In its Accession Protocol, China had promised to fully comply with the geographical indication-related clauses in the TRIPS Agreement and to provide effective legal protection for GIs.
79. Currently, in the practice there were no conflicting GIs at STMO and AQSIQ because they had been registered by different registrants. Article 6 of the Provisions on the Protection of GI Products specified that the protection of GI products followed the principle of voluntary application, transparent acceptance, handling and approval. According to the Trademark Law, Trademark Law Implementing Regulations and Procedures for the Registration and Administration of Collective Marks and Certification Marks, GIs could be registered as collective marks or certification marks to gain legal protection in China. Registered geographical indications could enjoy sound and effective protection and their owners had no need to register with any other agencies.
80. When applying for registration of trademarks in China, according to Article 17 of the Trademark Law, foreigners and foreign enterprises should proceed in accordance with the agreements signed between their home countries and China or international treaties of which both are members, or the reciprocity principle. Besides, pursuant to Article 6 of the Procedures for the Registration and Administration of Collective Marks and Certification Marks, when registering their GIs as collective marks or certification marks, foreigners or foreign enterprises should submit proof of the legal protection of the GI in their home countries for them as the right holders. For example, the orange produced in Florida of the United States had successfully been approved for registration in China.
81. All the circulars and documents concerning the acceptance and approval of GI products protection, as well as the use of specialized indications had been made public and could be found on the website of AQSIQ at http://www.aqsiq.gov.cn.
82. Regarding counterfeiting at retail and wholesale markets, she said that the three major retail markets in Beijing had taken effective measures in IPR protection after signing MOUs with famous European brands holders, and had honored their commitments. However, in the process of implementing the MOUs, IPR agents and landlords had had some frictions due to different understandings of some articles in the contracts, which was quite normal. The Chinese government authorities had made great efforts to mediate between the parties to settle the frictions, and to push forward the perfection and implementation of the MOUs. At present, the market organizers held a positive and cooperative attitude.
83. On the issue of including IPR protection into the lease contracts between the landlords and vendors, the Shanghai Industrial and Commercial Administration had amended the Demonstration Text on Shanghai Merchandise Trading Market Operation Contract this year, prescribing obligations for landlords and vendors on trademark protection. Now landlords in many key garment and small merchandise markets had adopted the new contract model. To prepare for the 2008 Olympics, the Beijing Municipal Government had held a meeting in which it had decided to strengthen the communication with foreign right holders, improve the precautionary and remedy systems in wholesale and retail markets and the 12312 Complaining and Appeal Services Centre Mechanism, and phase out counterfeiting in wholesale and retail markets.
84. On the issue of the Trademark Office backlog, due to year-on-year increase in China's trademark applications, in 2006 there had been as many as 766,000 cases. Currently the time span of the examination was about 30 months, which was longer than last year. In view of the longer time span of trademark examination, SAIC had further recruited trademark examiners, strengthened management and enhanced the operation guarantee for the automated system. All staff worked diligently in every step of the trademark application procedure and tried hard to enhance working efficiency. In 2006, altogether 313,000 trademark registration applications had been examined and the annual examination quantity of every examiner had been much higher than in other countries.
85. Responding to questions in the sixth category, concerning Copyright, she said that in 2006, the Chinese Copyright Authority had investigated and confiscated pirated overseas textbooks failing to pass content review in six universities of Beijing, Shanghai, Guangzhou and Wuhan. The Association of American Publishers and the Association of British Publishers had both expressed their gratitude with regard to such actions taken by the Chinese Government.
86. Responding to questions in the seventh category, regarding General Enforcement, she said that SAIC and China Customs had regularly published statistical data on infringement cases. As for the concrete information, i.e. the analytical statistics of all cases that had been requested by the United States, her delegation was unable to provide them as this request went completely beyond the scope of the TRIPS Agreement.
87. Measures relating to notarization and legalization of Powers of Attorney and evidence had been adopted and were consistent with Article 242 under the Civil Procedure Law of China. In accordance with Article 49 of the TRIPS Agreement, relevant administrative procedures should adopt the same principles as for civil procedures. Regarding the problem of possibly time-consuming procedures in practice, a call for more cooperation and communication between China and foreign countries (including foreign IPR holders and related enforcement institutions) was becoming more and more urgent, as well as mutual comprehension on systems of law, enforcement systems and document requirements in order to reduce unnecessary delays caused by misunderstandings of respective systems of law.
88. As for the implementation of interim injunctions, the People's Court exercised them in an active and prudential manner pursuant to laws. Her delegation was wondering about the source of the quote that "less than 2% of all interim injunction applications actually submitted to the courts are granted".
89. It had always been the principle and goal of the Chinese Government and the public security bodies to constantly strengthen cooperation with IPR holders in conducting IPR protection. At the same time, it was also the foundation of effectively cracking down on IPR crimes. Once an appeal of the IPR holder was accepted and heard, the right holder participated in the relevant legal procedure. The private-prosecuting case in which the right holder appealed to courts directly was a major form of the right holder's direct participation.
90. According to the Criminal Law of the PRC, the Regulation on the Transferring of Suspected Crime Cases at Administrative Agencies, and the Administrative Punishment Law, the administrative law enforcement agencies should report or transfer the cases to the public security agencies if criminal responsibilities were involved. If administrative punishments such as fines had already been imposed before the transfer, such penalties would be considered by the People's Court under the law when making determinations. It was necessary to point out that, according to the Regulation on the Transferring of Suspected Crime Cases at Administrative Agencies, the cases transferred were "suspected" rather than "affirmed" cases. Cases that could not be identified as criminal cases by the public security agencies would be transferred to the relevant administrative agencies for settlement.
91. Responding to questions in the eighth category, concerning Administrative Enforcement, she said that it was widely recognized that the Chinese Government had spared no efforts in strengthening administrative enforcement of IPR protection. According to Article 53 of Trademark Law, when handling trademark infringement cases, the administrative authorities for commerce and industry could confiscate and destroy the infringing products once the violations had been confirmed. If the confiscated products were of value, which was detachable from the infringing trademark, according to Article 53 of Administrative Punishment Law, they could be openly auctioned or disposed according to the relevant provisions of the country. The proceeds from the auctioning of the confiscated illegal property should be handed to the state treasury.
92. IP infringement crimes are effectively cracked down upon. However, a few criminals still attempted to evade legal punishment by acting in a more sly and concealed manner. In this context, Chinese public security agencies had formulated strategies of both "targeted fighting" with a focus on chief offenders who were responsible for the infringing activities and "whole-chain fighting" aimed at destroying every link in the criminal network from production, storage, transportation, sales to export. As for the question of "what are the necessary conditions to punish manufacturers, distributors or would-be distributors concurrently?", she said that criminals would be held accountable as long as it could be proven that those criminals had common criminal intentions, conducted criminal activities jointly and the actions constituted criminal offences.
93. Responding to questions in the ninth category, concerning Civil Enforcement, she said that according to the Several Provisions of the Supreme People's Court on the Evidence for Civil Actions, the formality and source of evidence should be in line with the laws. Evidence collected by private investigators and used in civil litigations should be subject to the Civil Procedure Law.
94. Responding to questions in the ninth category, concerning Customs/Border Enforcement, she said that, to reduce the outbound flow of counterfeit goods across China's borders, China Customs had improved enforcement means. Great importance had been attached to the close combination of inspections and examinations on custom declaration data, declaration bills of documents, and examination work on the spot. Some advanced examining techniques had been widely adopted by China Customs, such as X-ray machines, which effectively improved their capability and efficiency to inspect and confiscate infringing goods. Special enforcement actions aiming at cracking down on illegal export of infringing goods in the form of freight, post or express delivery had been initiated. For example, a special IPR protection action named "Dragon Boat Action" was being carried out from 1 October 2007 to 31 March 2008. China Customs had also strengthened international enforcement cooperation with customs of other countries with the purpose of protecting IPRs.
95. Responding to questions in the ninth category, concerning IPR Infringement through the Internet, she said that China severely cracked down on copyright piracy on the Internet pursuant to international treaties and domestic laws and regulations. In 2006, the State Council had promulgated the Regulations on the Protection of the Right of Communication through Information Network. The SPC had issued Decision (No. 2) on Amending the Supreme People's Court's Interpretation on Certain Issues Concerning Application of Laws in Dealing With Cases Concerning Computer Network Copyright Disputes. On 29 December 2006, China had announced its decision to join the WIPO Copyright Treaty and WIPO Performances and Phonograms Treaty. On 9 June 2007, these two treaties had officially taken effect in China. However, she pointed out that the issue of copyright piracy on the Internet went beyond the scope of the TRIPS Agreement and that it was therefore not appropriate to discuss this issue in the framework of the transitional review of China.
