Minutes - TRIPS Council - View details of the intervention/statement

Ambassador Federico A. González (Paraguay) (24-25 October) and Mr. Martin Glass (Hong Kong, China) (17 November)
79. The representative of China said that his delegation had submitted the information required in the Annex 1A of its Accession Protocol in document IP/C/W/564 which, he hoped, would help keep Members up to date with the latest development in both the legislative work and the enforcement efforts in China regarding the protection of intellectual property rights. His delegation had prepared detailed responses to the questions from Japan and would also touch on some of the issues raised by other previous speakers. Trademarks 80. With respect to a service trademark which retailers would use in stores, he said that the Nice Agreement Concerning the International Classification of Goods and Services for the Purpose of the Registration of Marks ("Nice Agreement"), in his delegation's understanding, did not include the retail industry in the scope of service trademark protection, as what was being provided by retailers to consumers were tangible commodities rather than services. Therefore, like other members of the Nice Agreement, China did not accept service trademarks applications for retail services for the time being, but was currently examining whether or not such applications for registration could be accepted. 81. With respect to third party access to trademark documents, he said that documents concerning administrative decisions, the status of trademarks under review, or the opposition procedure, could be viewed at the official website of the trademark authorities (http://www.ctmo.gov.cn). He specified, however, that the trademark review decisions or the rulings on trademark opposition itself were not yet open to the general public. In the cases of review and adjudication of trademarks, since administrative decisions involved business information of the parties to the case, the Trademark Review and Adjudication Board, in dealing with applications of third party access to relevant administrative decisions concerning a trademark, would examine whether such access would damage the interests of the parties to the case. Only if the third party had obtained the consent of the parties to the case, or if there were other circumstances in which the interests of the parties to the case would not be affected, would the Board allow the third party to consult an administrative decision. 82. As to documents in judicial procedures, he said that judgments were pronounced in public by the Courts on all cases, and judgment documents including in trademark cases were open to the general public. Any third party could view trademark-related judicial documents at the website sponsored by the IPR Court of the Supreme People's Court (http://ipr.chinacourt.org), in addition to other websites for judicial documents sponsored by local Courts. For documents that had not yet been uploaded to the Internet, there were other channels available for consultation. Enforcement 83. With regard to the consistency of the Civil Procedure Law of the People's Republic of China with Article 43 of TRIPS Agreement, he said that in the relevant judicial interpretations of the Supreme People's Court, namely the Several Provisions of the Supreme People's Court on the Evidence for Civil Actions, Article 17 stated that "if one of the following requirements is satisfied, a party concerned and his agent ad litem may apply to the Court for investigating and collecting evidence, the requirements are (1) the evidence under the application for investigation and collection belongs to documentary materials that shall be kept by the relevant authority of the State and must be transferred by the Court ex officio; (2) the evidence belongs to materials concerning State secrets, commercial secrets, or individual privacy; or (3) the evidence belongs to other materials that cannot be collected by the party concerned and his agent ad litem themselves due to impersonal cause." Therefore, if "the document held by the opposition party" in question met any of these requirements, an application could be made to the Court for investigation and evidence collection. Otherwise, he said, the Court would refuse such an application. 84. In relation to criminal procedures for investigating and handling IPR criminal cases, he said that according to the Criminal Procedure Law of the People's Republic of China, the police authority was to keep for examination any property and valuably items of the criminal suspects that had been seized, as well as the fruits accrued therefrom. Things that served as tangible evidence were to be transferred together with the case. After a judgment rendered by the Court had become effective, the police authority was to handle the items involved in the case in line with the judgment. In law enforcement practices, the police authorities followed these requirements seriously and destroyed a large amount of IPR-infringing products. 85. With respect to administrative law enforcement, he said that Article 53 of the Patent Law of the People's Republic of China provided that the Administrative Authority for Industry and Commerce could, upon having determined that an infringement had taken place, order the infringer to immediately stop the infringing act, confiscate and destroy the infringing goods and any implements that had been specifically used to manufacture the infringing goods and counterfeit representations of the registered trademark, and impose a fine. 86. With regard to the issue that a person carrying out IPR infringements may escape criminal punishment by keeping the amount in question below the relevant threshold, has said that at present for any one act of trademark or copyright infringement that did not reach the threshold of criminal punishment, the infringer could only be held responsible under civil liability or administrative responsibility to the IPR holders, and the relevant administrative authorities could investigate and handle the case in accordance with the law. However, if an infringer had carried out multiple IPR infringement acts and had kept the amount of each infringing act under the statutory threshold of criminal law enforcement with the aim of avoiding administrative handling or criminal punishment, the IPR holder could incur criminal responsibility under Article 14 of the Opinions of the Supreme People's Court, the Supreme People's Procuratorate and the Ministry of Public Security on Certain Issues of Application of Law in Handling the Criminal Cases of Intellectual Property Rights Infringement, which had been promulgated on 11 January 2011. That Article provided that "for anyone who has carried out multiple IPR infringement acts without administrative or criminal punishment, the illegal business amount, illegal proceeds or sales amount shall be accumulatively calculated. Anyone who has carried out multiple IPR infringement acts within two years without administrative punishment and whose accumulative amount constitutes a crime shall be convicted and punished according to the law, and the period for prosecution shall be subject to the relative provisions in the Criminal Law without being limited by the aforesaid two-year period." 87. Regarding repeated IPR crimes, he said that police authorities in China dealt with multiple IPR infringement acts in accordance with paragraph 2 of Article 12 of the Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Issues Concerning the Specific Application of Law in Handling Criminal Cases of Infringement of Intellectual Property Rights, which had been issued in 2004. If such an act reached the "criminal threshold" stipulated by relevant laws or judicial interpretations and the infringer had been suspected of a crime, the police authority would crack down on such an act. In the meantime, Article 3 of the Interpretation II of the Supreme People's Court and the Supreme People's Procuratorate on Issues Concerning the Specific Application of Law in Handling Criminal Cases of Infringement of Intellectual Property Rights issued in 2007 stipulated that suspended sentences generally did not apply to perpetrators of IPR crimes. In addition, it was stipulated in Article 65 of the Criminal Law of the People's Republic of China that "if a criminal commits another crime punishable by fixed-term imprisonment or heavier penalty within five years after serving his sentence of not less than fixed-term imprisonment or after receiving a pardon, he is a recidivist and shall be given a heavier punishment. However, this shall not apply to cases of negligent crime." The police authorities have also followed these stipulations when handling criminal cases of IPR infringement. Regulations on Administration of Technology Import and Export 88. Concerning the relationship between certain provisions in the Regulations on Administration of Technology Import and Export and the national treatment principle, he said Article 24 of the regulation stipulated that "the technology supplying party shall ensure that he or it is the legitimate owner of the technology supplied, or one who has the right to assign or license the technology. Where the receiving party infringes another person's lawful rights and interests by using the technology supplied by the supplying party, the supplying party shall bear the liability therefore." Such provisions were consistent with Article 349 and Article 353 of the Contract Law of the People's Republic of China. Article 349 stated that the transferor in a technological transfer contract should guarantee legitimate ownership of the technology provided, and guarantee the technology provided to be complete, without fault, effective, and capable of attaining the contracted objective. Article 353 said that the transferor was liable for any infringements upon the legitimate rights and interests of others that occurred through the exploitation of the patent or utilization of the technological know-how by the transferee in compliance with the contract. Consequently, Article 24 of the Regulations on Administration of Technology Import and Export was not an obligation imposed only on the foreign right holder of technology. 89. He said that Article 27 of the Regulations on Administration of Technology Import and Export required that "within the term of validity of a contract for technology import, an achievement made in improving the technology concerned belongs to the party making the improvement." As the party making the improvement might be either the transferee or the transferor, the issue of a foreign holder of technology not enjoying national treatment did not exist. In addition, in accordance with Article 2 of the Regulations on Administration of Technology Import and Export, the criterion for judging whether a technology was imported or exported was the cross-boundary transfer rather than the nationality of the transferee or the transferor. 90. As to whether the Government could interfere with contract licensing fees, he said that under the Regulations on Administration of Technology Import and Export, imported and exported technologies were classified as prohibited, restricted, or those that could be imported and exported freely. In relation to the latter category, the contract for import or export was only required to be registered with the competent authority without substantive examination and there was no provision in the regulation to authorise the competent authority to change licensing fees. In practice, for technologies that could be imported freely, licensing fees were determined through consultations of the parties to the contract. As long as there had been no violation of law, the Chinese government would neither interfere nor demand enterprises to change prices in the contract. 91. With respect to the China IPR Protection Action Plan 2011, he said that the competent authority would, firstly, draft anti-monopoly guidelines in regard to the abuse of IPR in line with relevant stipulations in China's Foreign Trade Law. However, as the drafting would take some time and relevant studies were on-going, no specific timetable for the promulgation of such guidelines had been set. 92. Secondly, to implement the Patent Law of the People's Republic of China which had been newly amended in 2008, the Decision of the State Council on Amending the Regulations for Implementation of the Patent Law of the People's Republic of China (State Council Decree No. 569) had been promulgated on 9 January 2010. The amended regulation had been effective since 1 February 2010 and had been notified to the WTO, as noted by the Chair at the beginning of the meeting. In this regard, the representative noted the question by India concerning China's Patent Law and said that due to the technical nature of the issue, China could pursue the matter in detail bilaterally after the meeting. Indigenous Innovation and Government Procurement 93. With respect to indigenous innovation and its relationship with government procurement, he said that his delegation wished to clarify that the administrative measure that had raised Members' concern, namely the Notice Regarding the Launch of the National Innovation Product Accreditation Work for 2009, issued on 30 October 2009, had been an invitation for application for accreditation so that the products of the applicants could be accredited as indigenous products. The purpose of the paper had been to encourage the applicants to strengthen their innovation activities. 94. In April 2010, China's relevant authorities had publicly solicited opinions and comments on the draft of the Notice Regarding the Launch of the National Innovation Product Accreditation Work for 2010. In this document, it had been confirmed that products by domestic and international manufacturers would be treated equally. 95. In June and July 2011, to further confirm that indigenous innovation policies and preferential government procurement treatment were no longer linked, China's relevant authorities had issued two Notices, according to which implementation of relevant administrative measures, including the Administrative Measures on Budgeting for Government Procurement of Indigenous Innovation Products and the Trial Measures for Administration of the Accreditation of National Indigenous Innovation Products, had been terminated. 96. With respect to the specific cases raised by the delegate of Mexico he urged the Mexican Government to contact China bilaterally or through the Embassy of China for more details, and said that he would also send that message back to his capital after the meeting. 97. In conclusion, his delegation wished to thank all Members for their constant support over the course of this transitional review, and their appreciation for China's efforts in further strengthening its protection of intellectual property rights. Since its accession to the WTO ten years ago, China had fulfilled its tremendous commitments made upon accession, and in this course, as noted in the last TPR of China, Members had observed the strong political will of the Chinese government in that regard. With respect to the TRIPS Agreement, China had not only established a sound legislative framework, but also an enforcement system that integrated both administrative and judicial measures. Another particular achievement was the enhanced awareness of IPR protection in the whole society of China as one of the largest developing countries. The Chinese government continued to attach great importance to IPRs and their protection as the value and importance of IPRs in an increasingly globalized world was well known. Although the transitional review of China had now come to an end, China believed that its exchanges with Members on IPR issues and their protection would continue, and be further enhanced, in the future. China would continue to participate in the work of the Council in an open and cooperative spirit.