Center for Advanced Study & Research on Intellectual Property

 

CASRIP Newsletter - Spring/Summer 1998, Volume 5, Issue 2

The Development of China's Intellectual Property Protection System

I. Legislative History of IP

It is in the past fifteen years that legislation of intellectual property (IP) has developed in China. Before 1983, there were no special laws on the protection of IP; however, China has since promulgated laws and regulations on IP, including the Trademark Law, the Patent Law, the Anti-Unfair Competition (Antimonopoly) Law, and the Copyright Law, and has entered into major international treaties on IP. These laws and conventions, together with the Constitution, the civil law, the Criminal law and other related legal norms form the complete system of IP in China.

1.Constitution (promulgated in 1982, amended in 1988 and 1993)

The Constitution is the fundamental law of a country. Due to its highest legal effect, it is the legislative foundation for other laws and regulations, and its essential principles are followed by administrative departments when they enact rules. Articles 3, 20, 22, 47 of the Constitution are the guiding principles for IP legislation.

2. General Principles of the Civil Law (promulgated in 1986)

The General Principles of the Civil Law adjusting property relationships and personal relationships between civil subjects with equal status is the basic law for IP protection. Many essential principles of the civil law can be applied to guide IP legislation. Section 3 of Chapter 5 of the General Principles specifically provides that IP is one of the major civil rights.

3. Criminal Law (promulgated in 1979, revised in 1997)

The Criminal Law deals with all aspects, with IP included. Article 127 of the 1979 version lays down the crime of counterfeiting a trademark and its punitive measures. This article is the first legal provision to protect IP in China. In order to strengthen IP protection, section 7 of the newly revised Criminal Law establishes the crime of infringement against patent right, trademark right, copyright and trade secret, as well as criminal sanctions.

4. Law on Science and Technology Progress (promulgated in 1993)

Law on Science and Technology Progress is the basic law to adjust the scientific and technical work in China. Its general provisions with some regulations on IP enable the law to play a guiding role in IP protection as well.

5. Trademark Law, Patent Law, Antimonopoly Law, and Copyright Law.

These statutes are the most important laws on IP. They regulate the concrete problems concerning IP and can be directly put into operation.

6. Other related laws

Procedural laws, including the Civil Procedural Law, the Criminal Procedural Law and the Administrative Procedural Law must be abided by the court in trial of all types of IP, cases, thus allowing cases to be handled in time and providing adequate legal protection. In addition, IP problems are also connected with the law on product quality, the law on environmental protection, and the law on protection of consumers' rights and interests.

II. Judicial Protection of IP in China

1. Organizational Structure of the Court System

Since 1992, a special adjudication division for the trial of IP cases, IP Division, has been set up in the areas where IP cases are concentrated: (1) the High People's Courts in Beijing, Shanghai, Tianjin, Guangdong, Fujian, Hainan, etc.; (2) the Intermediate People's Courts in Beijing, Shanghai, Tianjin, Qingdao, and several Special Economic Zones; and (3) the grassroots courts in Haidian District of Beijing, Pudong District of Shanghai, etc. As to courts without these divisions, special trial groups have been set up within the civil or economic adjudication division. Usually there are three full-time judges to deal with IP cases. In patent cases, the parties concerned can apply to the Patent Re-Examination Board1 for invalidation of a patent as to whether the subject technique possesses novelty and inventiveness and whether it is qualified for being granted a patent. After reexamination, the Patent Board comes to a decision according to which the court shall decide whether or not there is an infringement.

2. Judges

China has attached great importance to the professional training of IP judges. The State Judge College was set up in 1997, based on the former China Senior Judge Training Center. Every year it gives professional training to judges through different means. Some universities, such as Peking University and People's University, have provided courts all over China with graduates who have majored in IP and have achieved either bachelor's or master's degree. In 1996, the High People's Courts in Shanghai and Beijing managed to solve knotty problems in IP disputes by engaging legal consultants, appointing organs for technical verification and inviting experts and scholars to participate in the trial.

3. Fundamental Principles for the Trial of IP Cases2

1) All parties who institute or respond to prosecutions in the court shall have the same litigation rights and obligations. The court shall apply the law equally to them no matter whether they are a Chinese citizen or legal body, or a foreign national or legal body.

2) In hearing cases, the court may make a decision on property preservation upon a party's request when the act of one party or other things might cause the final decision unable or difficult to be carried out. If necessary, the court may make the same decision in accordance with the law even if the application for property preservation is not filed.

3) The court may close a case through conciliation in accordance with the principles of voluntaries and lawfulness in every stage of the trial procedure. If conciliation efforts are ineffective, the court shall render a judgment without delay. The conciliation agreement has the same validity as a judgement.

4) Trials are governed by the principles of burden of proof, of collegiate panel, and of public trial.

5) In conducting proceedings involving foreign elements, the court shall apply both domestic laws and international treaties.

6) The court exercises judicial power independently.

III. Administrative Protection of IP in China

In China, quite a number of IP disputes are not resolved through judicial proceedings, but by administrative agencies.

1. Administrative Authorities for Patent Affairs3

Administrative Authorities for Patent Affairs are established by the competent departments under the State Council and the people's governments of provinces, autonomous regions, municipalities directly under the central government, open cities, and Special Economic Zones. The Authorities have both law enforcement and management functions. They have the power to order the infringer to stop the infringing act, to compensate for damages, to pay expenses, to rectify publicly, to stop counterfeiting, and to pay fines if conciliation is ineffective. Any dissatisfied party, within three months from the receipt of the conciliation agreement, may institute legal proceedings in the people's court. If such proceedings are not instituted within the time limit, the decision made by the Patent Administrative Authority will take effect.

2. Administrative Authorities for Trademark Affairs

The State Administration for Industry and Commerce is the supreme trademark administrative authority while all industrial and commercial administrative authorities set up in a county and above are responsible for specific trademark affairs administration and enforcement of the law. The administrative authorities for industry and commerce at different levels shall, according to the circumstances, order the infringer to stop the infringing act, compensate for damages, and rectify the situation within a specified period. They can also confiscate unlawful gains, circulate a notice of criticism, or impose a fine. If any interested party is dissatisfied with the decision made by the administrative authority for industry and commerce, it may institute legal proceedings with the people's court. If there have been no legal proceedings instituted at the expiration of the said period, the decision of the administrative authority for industry and commerce will take effect.

3. Copyright Administrative Authorities

The National Copyright Administration Office and the copyright department under the local people's governments are responsible for copyright administration and enforcement of the Copyright Law. These administrative authorities can impose sanctions in the forms of public warning, injunction in relation to the production and distribution of infringing copies, confiscation of unlawful gains, seizure of infringing copies and equipment used for making infringing copies, and fines. The IP administrative authorities in China are known for efficiency, simple procedure and promptness to put a case on file for investigation. Some IP cases redressed by the administrative authorities have influence both inside and outside China.

IV. The Latest Development of IP Protection in China

IP protection in China has grown out of nothing to become mature. Yet there are still some problems in practice. Therefore, in 1993, both the Patent Law and the Trademark Law had their first revisions. Currently, China is considering further revisions of all laws with respect to IP.

1. Revision of the Patent Law4

The second revision of the Patent Law has been put on the legislative agenda of the National People's Congress. The following issues should be considered:

1) Extent of legal protection of the technique: Plant varieties should be considered patentable so as to keep up with TRIPS. Besides, biological project technology, gene product in particular, and computer software are under conside ration.

2) Protection of utility model: In view of the Announcement of the Patent Office of China (No. 27), the definition of utility model should be made clear, the scope of it be enlarged, and the examination of it be strengthened so as to improve its quality. In order to give the party concerned the opportunity to complain in the invalidation procedure of the patent right, the final effect of the decision invalidating the patent right for utility model should be called off.

3) Protection of the patent right: The new law shall make clear the extent of protection of the patent right and the definition of patent infringement. Indirect patent infringement, in particular, has been handled by the court but has not been dealt with in legal provisions. An invention should be given legal protection from the date on which the application is first filed to the date on which it is granted the patent right.

4) Relationship between revocation and invalidation of the patent right: The differences between revocation and invalidation of the patent right lie in the time allowed for filing a claim, grounds for revocation or invalidation, and the authorities that will accept the claim. According to the present law, the invalidation procedure cannot get started until the revocation procedure is over, which may influence the concerned party's interests. Since the two procedures are overlapping, the revocation procedure can be terminated.

5) Industrial designs: Industrial designs are different from inventions and utility models in nature, they should be protected by an independent law.

2. Revision of the Trademark Law5

In revising the Trademark Law, the following issues should be considered:

1) Enlarging the scope of trademark protection: Protection of well-known trademarks, collective trademarks, certification trademarks, associated trademarks, preventive trademarks, cubic trademarks, and sound trademarks should be laid down in the new law to meet the demands of the development of a market economy.

2) Stressing the legal protection of trademark right: At present, article one of the Trademark Law stresses that it is enacted for the purpose of improving the management of trademarks; thus the protection of a trademark right should be emphasized.

3) Coordinating the legal relationship between trademark and enterprise name: For the time being, the protection of trademark and the protection of enterprise name are governed by separate laws.

4) Simplifying the trademark application procedure: Documents submitted for applying for trademark registration should be reduced as much as possible. The protection term should begin with the date on which the application is filed, the opposition procedure be held at a later period, the time for examination be shortened, and the procedure of re-issuance of registration certificate be streamlined.

5) Strengthening of administrative investigation and prosecution: The administrative investigation and prosecution of trademark should be strengthened so that the infringer will be punished for his or her illegal act.

6) Grant of judicial review: At present, the Trademark Review and Adjudication Board is responsible for the final determination of a trademark. To be in line with TRIPS, the party concerned should be allowed to request a judicial review.

7) Protection of geographical marks: In combination with the stipulations on certification trademarks, geographical marks should also be protected.

3. Revision of the Copyright Law6

1) Object of copyright protection: The coming into being and existing form of oral works and the provision of proof after infringement with respect to oral works are difficult to operate in practice. The revision should make these all clear.

2) Subject of the copyright: There have always been debates on whether a non-legal entity can be the subject of copyright. Since the non-legal entity cannot exercise the copyright, nor assume civil obligations, many problems have a risen in judicial trial. In view of this, the revisions should be made with reference to the General Principles of the civil Law and judicial interpretations.

3) Content of the copyright: In practice, many copyright disputes are caused by the order in which the co-authors' names are listed, which to some extent can influence the public's evaluation of an author. The new law should make it clear that the order in which the co-authors' names are listed has nothing to do with the author's enjoyment of the copyright and its scope.

4) Cognizance of an infringement: The existing law enumerates infringing acts, which cannot be inclusive. The suggestion is that infringing acts should be regulated according to a principle that will undoubtedly give the judge more freedom to adjudicate.

5) Coordination of the regulations protecting computer software and the Copyright Law: The definition of software developers, cognizance of software created within the fulfillment of duties, term of copyright protection for software, and function of software registration mentioned in the regulations for the protection of computer software should be kept in line with the fundamental principles of the Copyright Law.

4. Enactment of a Trade Secret Protection Law

At present, trade secrets are protected in accordance with the Antimonopoly law and the Criminal Law. In a market economy, disputes caused by transferability and outflow of technological achievements are increasing and becoming even more complicated. It is necessary to enact a special law to regulate trade secrets thoroughly.

5. Information legislation

In March 1997, "China Informatization Legal Framework Forum" was held in Beijing. The delegates came from the legislature, judicial institutions, information management offices, universities, and academic institutions. They discussed 1) copyright and trademark issues in cyberspace; 2) computer software protection; 3) database protection; and 4) responsibility of ISP on the internet.

On April 1, 1998, the Patent Office of People's Republic of China changed its name to the State Intellectual Property Office of the People's Republic of China. China is now reforming its trial and lawyer systems, which can contribute to the effective protection of intellectual property.

Ping Zhang*

*Associate Professor of Law Department and School of Intellectual Property, Peking University; Patent Agent of the Patent Agency, Peking University; Deputy Secretary General of Intellectual Property Association of China Universities & Colleges.

Notes:

1 See Patent Law of China, art. 43.
2 Li Guoguang, Vice President of the Supreme People's Court, "The Present and Future Condition of the Protection of IP in China." Judicial Exercise (??), 1997, Issue No. 6.
3 See Rules for the Implementation of the Patent Law of China, Chapter VII.
4 Tang Zhong Shun, "On the Second Revision of the Patent Law." IP Studies, 1997, Issue No. 3.
5 Dong Bao Lin, Trademark Officer, "On the Second Revision of the Trademark Law." Lecture in Peking University, 1997, Issue No. 12.
6 Beijing High People's Court, "Suggestion on the Revision of the Copyright Law." Copyright, 1997, Issue No. 2.

Last updated 4/27/2012