The Latest Development of China’s Judicial Protection for

Intellectual Property

Mr. Ren WeihuaDeputy-Chief Justice, No. 2 Criminal Division,

the Supreme People’s Court, PRCMay 26, 2005, Washington D.C.

Overview of IP judicial protection

IPRs in China are not only protected by civil law, but also by administrative and criminal law.

Three forms of IP judicial protection:– Civil action: infringee v. infringer– Administrative action (Judicial review):

infringee or infringer v. Administration– Criminal action: prosecutor / victim v.

infringer

Most significant progresses in 2004

Issuance of Judicial Interpretations on IP crimes (17 Articles, Dec 8, 2004)

– SPC’s major research project on IP criminal protection in 2002

– Drafting JI started in the end of 2003– Wide consultations with governmental

agencies, experts, IP right holders, etc. Publication of Judicial Interpretations

on the Trial of Technology Contract Disputes (47 Articles, Dec 16, 2004)

2004 IP Crimes JI - Consultations

Consultations with:– American Chamber of Commerce in

China （ AmCham-China ）– Business Software Alliance (BSA)– Motion Picture Association of America

(MPA)– US Information Technology Office

(USITO)– China Association of Enterprises with

Foreign Investment (CAEFI) / Quality Brands Protection Committee (QBPC)

Keynotes of 2004 IP Crimes JI - 1

Clarify the criteria & lower the threshold, e.g.:

– “Illegal business volume”: from RMB 100,000 (US$ 12,000) & RMB 200,000 (US$ 24,000) to RMB 50,000 (US$ 6,000)

– “Illegal gains”: from RMB 50,000 (US$ 6,000) to RMB 30,000 (US$ 3,600)

Keynotes of 2004 IP Crimes JI - 2

Clarify legislative concepts, e.g.:– ”reproducing and distributing”– “illegal business volume”– “identical TM”– ”use TM”– ”knowingly sell”– ”counterfeit patent”– ”for the purpose of making profits”– “without permission of copyright owner”

Online piracy - “reproducing & distributing” on Internet

Art 11.3: the right of communication of information on networks:

– “Distributing a written work, musical work, motion picture, television program or other visual works, computer software or other works to the public by information network falls under the definition of ‘reproducing and distributing’ stipulated in Article 217 of the Criminal Law. ”

Illegal business volume

Art.12.1: illegal business volume: – Value of the products produced, stored,

transported and sold– Value of the products by infringing on IP

sold: actually sold prices produced, stored, transported and

unsold: labeled prices or the actual sold prices to be found in average

without labeled prices or actual sold prices : middle market prices of such products

Keynotes of 2004 IP Crimes JI – 3

Penalty principle of concurrent offense:– choosing a serious crime (Art 13.1 & 14.1)

Joinder of punishments for plural crimes (Art 13.2 & 14.2)

Standard for corporate crime (Art 15): – 3 times individual criteria (used to be 5 times)

Joint offense (Art 16): – e.g., knowingly provide import-export

agency services

Case load - 1 2004: 8,717 IP infringement cases concluded:

– Rose by 19.76%– Incl. 385 criminal cases & 528 criminals– 3,056 IP related criminals were sentenced under other

crimes Sep, 2004–Mar, 2005 (Special Campaign–):

– 527 IP criminals & 3,553 other IP related criminals were sentenced

Jan - Mar, 2005 (Issuance of JI):– Courts received all IP related criminal cases increased by

18.9% Criminal cases would be evidently increased this

year & later on

Case load - 2

Preliminary measures: up to Oct, 2004, 6 provinces’ incomplete statistic:

– 257 applications for pre-trial preliminary injunction & preservation of evidence, 183 granted (approval rate: 71.21%)

Recognition of well-known trademarks– Up to Apr, 2005: 29 well-known TMs, incl.

6 foreigner’s TMs, e.g.: “沃尔玛” （“ Wal-Mart” in Chinese ） “DUPONT” “safeguard / 舒肤佳” (combined TM)

Recent IP cases related to US - 1

Prosecutor v Feng Shenwei & Others: – Selling shampoo bearing P&G’s

”Rejoice”, “Head & Shoulders” & other TMs, illegal gains of RMB 150,000 （ US$ 18,000 ）

– Held by Xihu District Court, Hangzhou, Zhejiang Province, August 3, 2004

– Crime of selling merchandise under a faked TM

– Imprisonment and criminal fine of RMB 50,000 （ US$ 6,000 ）

Recent IP cases related to US - 2

Prosecutor v Randolph Hobson Guthrie III & Others:

– Selling 133,000 pirated DVDs via www.threedollardvd.com, illegal gains of RMB 970,000 （ US$117,000 ）

– Held by No.2 Intermediate Court of Shanghai, Apr 19, 2005

Crime of selling infringed duplicate works Guthrie: 2 years & 6 month imprisonment,

criminal fine RMB 500,000 (US$ 60,000), deportation, confiscation of illegal gains and instrument of crime

Recent IP cases related to US - 3 Educational Testing Service (ETS) /

Graduate Management Admission Council (GMAC) v Privately-Run Beijing New Oriental Language School (3 cases respectively):

– Reproducing, distributing & selling TOEFL, GRE, GMAT test questions without authorization

– Held by Beijing High Court, Dec 27, 2004 Copyright infringements Compensation to ETS RMB 6,170,959.4 (US$

746,186) Compensation to GMAC RMB 2,430,773.2 (US$

29,3926) Pay reasonable expense for each action of RMB

22,000 (US$ 2,660)

Recent IP cases related to US - 4

Autodesk Inc. v Beijing Longfa construction & decoration Ltd.:

– Reproducing & installing Autodesk’s 5 kinds of software (3ds Max 3.0 、 3ds Max 4.0 、 3ds Max5.0 、 AutoCAD4.0 、 AutoCAD2000) without authorization

– Held by No.2 Intermediate Court of Beijing and Beijing High Court, Dec, 2004

Software copyright infringements, Compensation of RMB 1,490,000 (US$ 180,000) Pay reasonable expense RMB 32,250 (US$ 3,900) Public apology, elimination of ill effects

Recent IP cases related to US - 5

Wal-Mart Stores Inc. v Tong Xiaoju & Others:

– Using “ 沃尔玛” (Wal-Mart in Chinese) as trade name and domain name

– Held by Shenzhen Intermediate Court, Jun 22, 2004

“ 沃尔玛” is a Chinese well-known TM, Trademark infringement and unfair competition Cessation of using in trade name Cancellation of the domain name Compensation of RMB 120,000 (US$ 14,510)

Recent IP cases related to US - 6

Winning Laboratories Inc. v Tianjin Wanning pharmaceuticals Ltd.:

– Application for preservation of evidence– Granted by No.2 Tianjin Intermediate

Court, Feb 6, 2005 (within 24 hours after filing the application)

– Executed by the court immediately to take respondent’s all related materials, incl. account books, invoice of sale, dock warrant, recordings of business

Thank you & contact me ！

See more information, please to: www.chinaiprlaw.cn

Tel: 86-10-85256114

Add: No.27,

Dongjiaominxiang, Beijing 100745, PRC