White Paper on the Intellectual Property Rights Protection in China in 2004

In 2004, the governments at various levels in China further kept highly recognition on intellectual property right (IPR) issues and strengthened the protection for IPR. And the Lead Group of IPR Protection of the State Council, directed by Vice Premier Wu Yi, was set-up in the year.

In 2004, grand progress in IPR area was achieved in China. Three kinds of patent applications accepted by the State Intellectual Property Office (SIPO) amounted to more than 350 thousand, and the trademark registration applications accepted by Trademark Office under the State Administration for Industry & Commerce (TMO) were more than 760 thousand. New achievement was made in copyright protection. And customs protection for IPR entered in a new phase in 2004. The public security authorities and the culture administrative departments at various levels of Chinese government sternly combated the IPR infringement and piracy. Plant Varieties Right (PVR) protection proceeded fairly effectively. The level of IPR judicial protection elevated constantly. The international cooperation in IPR issues was observed exploring a new area and achieving new development.

I. The Government of China Further Highly Regarded IPR Protection

The government of China had always highly regarded IPR protection issues. In 2004, the State Council of China set-up the Lead Group of IPR Protection directed by the Vice Premier Wu Yi. The Lead Group of IPR Protection was composed by twelve related central authorities including the Supreme Court, the Supreme People's Procuratorate (SPP), the Ministry of Commerce (MOC), the Ministry of Public Security (MPS), the State Administration for Industry & Commerce (SAIC), the National Copyright Administration (NCAC), the SIPO, the General Administration for Customs of China (GACC) etc. The responsibility of the Lead Group of IPR Protection is to direct and coordinate IPR protection issues at national level, and to supervise the disposal of some outstanding IPR involved cases. Under the unified arrangement of the Lead Group of IPR Protection, a multiple departmental co-operation system for IPR administrative enforcement was established in the government of China. Every segment of IPR protection issues was linked up and coordinated under the direction of the Lead Group of IPR Protection. The IPR publicity and training issues at national level were specially deployed by the Lead Group of IPR Protection, and related issues proceeded effectively. Up-to-date, similar IPR protection workgroups had been set-up in every provincial local government, and carried out daily work and special intellectual property protection enforcement in the manner of Uniformly Directed at National Level, Responded by Local Government, Coordinated and Directed by Inter-departments of Involved Authorities, and Jointly Conducted by Multiparty of Related Issues.

From Jun. 20 to 22, when Premier Wen Jiabao was inquiring on-the-spot in Shandong province, he noted that international competition in the future world be the competition of IPR, and would specially be focused on the competition of top-ranking technologies and top-ranking products. He also addressed that we should inspire outstanding domestic enterprises to build-up top business brands at the world level, in the strategic viewpoint of achieving the nation's prosperity and the nation's great renaissance.

On Jan. 13, Vice Premier Wu Yi addressed in the National Patent Conference that " whether the economy of China could be harmony with the economy globalization trend, in great extent depends on whether our country could further and quickly improve national IPR system, depends on whether our country can quickly develop the ability of independently owned IPR creation, management, enforcement and protection, depends on whether domestic enterprises can quickly improve the ability and capacity of mastering and managing IPR system, and the capacity of creating core technology with independently owned IPR . She stressed, we should strongly promote the enforcement of National Intellectual Property Strategy, to serve for promoting the country's economy development, reinforcing the country's international competition ability, guaranteeing the national interest and economy safe.

On Apr. 20, on the China High-Level Workshop on Intellectual Property Rights and Economy Development, jointly conducted by the SIPO, the Development & Research Center (DRC) of the State Council and Organization for Economic Co-operation and Development (OECD), the Vice Premier Wu Yi made a written address. Wu Yi noted in the written address, that the government of China would readily learn advanced experiences from every country across the world, refer to the measures that the governments of other countries and enterprises and related international organizations had taken in improving the ability of IPR management, to further improve Chinese IPR system, and to practically strengthen the establishment of the ability of IPR enforcement and IPR protection, to more positively serve the development of Chinese economy and social affairs. Wu YI also stressed, the government of China had chosen to take a stout attitude towards improving IPR system, enhancing the awareness of IPR in the public, and protecting IPR effectively and rationally.

On Aug. 26, the General Office of the State Council issued the Action Plan for Special Operation of Intellectual Property Protection. The Action Plan reads that the State Council has determined to spend about one year to conduct a special action in IPR protection across the country, in order to effectively suppress IPR (patent, trademark copyright, etc.) infringement, strongly inspire the awareness of IPR protection in the public, promote the innovation in the science & technology and create a well atmosphere for hi-tech industry development, fulfill the acceptance on China's entrance to the WTO, and regulate market economy order.

On Aug. 27, the State Council presided the National IPR Protection Special Operation Teleconference, the Vice Premier Wu Yi, the commissioner of the Lead Group of IPR Protection, noted that we should fully be convinced of the importance and imminence of IPR protection issues, and we should uniform our thoughts, ascertain our mission, pick up prominent issues, sternly and successfully conduct the battle of IPR protection special operation, suppress various kinds of IPR infringement, inspire the IPR protection awareness in the public, help China build a well-recognized appearance in the international occasion, and promote the coordinated development of economy and social affairs.

On Aug. 30, Mr. Lu Yongxiang, Vice Chairman of Standing Committee of the National People's Congress (NPC), led more than ten members of the Committee of Education, Science, Culture, Health (CESCH) of NPC, to visit the SIPO. Lu Yongxiang fully affirmed what the SIPO had achieved in the past, and demanded the SIPO to intensify the IPR protection power and strengthen the research of IPR Strategy. On Sep.2, the SIPO reported its works to the Plenary Session of the CESCH of the NPC. Hereafter, the legal enforcement examination workgroup of the CESCH accompanied by the leaders of the SIPO examined patent administrative enforcement issues respectively to related provinces.

On Dec.22, the Supreme Court and the SPP jointly issued the Interpretations on Several Issues on Application of Law for Trial of IPR Criminal Cases by the Supreme People's Court and the Supreme People's Procuratorate (hereafter named as Judicial Interpretation), for the purpose of prosecuting criminal action of IPR infringement and maintaining the order of socialism market economy. The criterion of setting crime and calculating criminal obligation was clearly defined by the Judicial Interpretation. And the threshold of receiving criminal obligation was sharply debased, for example, the criterion of receiving the crime of counterfeiting registered trademark, the crime of selling goods labeled counterfeited registered trademark, the crime of illegally manufacturing registered trademark design and the crime of infringing copyright was debased to 50 thousand RMB illegal sales from respectively 200 thousand and 100 thousand RMB, and to 30 thousand RMB illegal interest from 50 thousand RMB. Definite explains to some readily misread nomenclatures in the provisions of the Criminal Law were supplied and regulations applying issues on infringement in the export and import and pirated works online were figured out by the Judicial Interpretation. In addition, sanction principle of committing different crimes was made out, criterion of receiving unites crime was debased, and the provision for complicity was supplied by the Judicial Interpretation.

The issuance of the Judicial Interpretation for IPR related criminal obligations was another great measure taken by Chinese judicial system for strengthening IPR judicial protection. And a firm basis was constructed for intensifying IPR criminal judicial protection power, combating the criminal action of IPR infringement effectively, maintaining the order of market economy, constantly enhancing the level of Chinese IPR protection.

II. New Achievement Made Again in Patent Issues

In 2004, a total of 353,807 patent applications were accepted by the SIPO, an increase of 14.7% over 308,487 of the previous year. 1,592 international patent applications were accepted by the SIPO. And the SIPO received 518 requests for international preliminary examination and completed 534 international preliminary examination reports as well.

On Mar. 17, the total patent applications had been accepted by the SIPO amounted to 2 million, and the second one million increase took about 4 years and 2 months in comparison with about 15 years taken by that of the first million. The patent application in China achieved leapfrog increase. On Mar.12, the SIPO formally opened its Patent Application Electronic Filing System. By Dec. 31, a total of 4,239 electronic patent applications were accepted by the SIPO.

By Dec. 31, 2004, a total of 2,284,925 patent applications had been accepted by the SIPO. Of these applications, 1,874,358 were from domestic applicants and 410,567 were from overseas applicants, respectively accounted for 82% and 18% of the total.

In 2004, 190,238 patents were granted by the SIPO, an increase of 4.4% over 182,226 of the previous year. Among the total granted patents, 151,328 were from domestic applicants, an increase of 1.2% over 149,588 of the previous year, and 38,910 were from overseas applicants, an increase of 19.2% over 32,638 of the previous year.

By Dec. 31, 2004, the total patents had been granted by the SIPO were 1,255,499. Of these granted patents, 1,093,268 were from domestic applicants and 162,231 were from overseas applicants, respectively accounted for 87.1% and 12.9% of the total granted patents.

In 2004, the features of patent application and patent approval in the SIPO were appeared as following: (1) The increase trend of patent application and patent approval gradually became smooth in comparison with that of the previous year. The total three kinds of patent applications had a 14.7% increase over that of the previous year, and was observed 7.4 percentages reduction in comparison with 22.1% increase of the previous year. The increase rate of total three kinds of granted patents was 4.4%. The scale of increase fell relatively sharply compared with that of 2003. (2) Invention patent applications continued to increase considerably. In the point of application number, the SIPO received 130,133 invention patent applications respectively from domestic and overseas applicants, a 23.6% increase over that of 2003. The increase rate had exceeded 20% for 5 years. In the point of applicant structure, domestic applicants filed 65,786 invention patent applications through the year, and overseas applicants filed 64347. The application structure formed in 2003 that domestic applications surpassed overseas applications was maintained in 2004. (3) Annually industry design patent applications for the first time exceeded 100 thousand, and ranked the first in application in the world. Of all the applications more than 90% were from domestic applicants. (4) Most patent applications from domestic applicants were utility model and industry design. And the invention patent applications accounted for 23.6% of total applications, the proportion was higher than that of the previous year. That was to say, the quality of domestic patent applications in some extent was higher than that of 2003. (5) The granted invention patents continued increased sharply. 49,360 invention patents were granted by the SIPO, achieving a 32.9% increase compared with that of the previous year. The overstocking of pending patent applications abated further.

In 2004, a total of 2,768 requests for patent re-examination were accepted by the SIPO. It was 955 more than that of 2003, and was observed an increase of 52.7% over that of 2003. Among all of the requests, 2,744, 99.1% of total annually petitions, were filed by those who were not satisfied with the rejection in the essential examination process and those who were not satisfied with the decision in invention patent revocation process. 1,447 re-examination requests cases were concluded in 2004, and 2,561 were pending until the end of 2004. In 2004, 1,904 requests were filed for the patent invalidation, 91 more than that of 2003, or an increase of 5%. 1,667 cases were concluded in 2004, and 1,817 cases were pending until the end of 2004.

According to related statistics, 1,455 patent disputation involved cases were accepted by provincial level local IPR offices across the country, 1,215 were concluded through 2004. In 2004, the provincial local IPR Offices accepted 1,983 passing-off of patent cases and concluded 1,934, as for counterfeiting patent involved cases, the numbers were respectively 345 and 343.

In 2004, 244 applications for the registration of layout designs of integrated circuit were received by the SIPO, and 205 were published and issued certificates. By Dec. 31 2004, the SIPO had received a total of 682 applications for registration of layout designs of integrated circuit, and 571 were published and issued certificates.

III. Strengthened Administrative Enforcement in Trademark Protection

In 2004, all kinds of trademark related applications had a continuous and substantive growth in China and amounted to 762 thousand, an increase of 163 thousand or 27.16% over 599 thousand of 2003. The increase was especially apparent in trademark registration application area. The trademark registration applications amounted to 588 thousand, an increase of 136 thousand or 30.04% of that of 2003. Only through 3 years, the number of trademark registration applications achieved more than twice (2.17) to that of 2001, the first year when China was a member of WTO. The number of trademark related applications and trademark registration applications in China had respectively ranked the first in the world for three years. The total of trademark registration applications had added up to 3,556 thousand in China.

In 2004, 587,926 trademark registration applications covering both goods and services were accepted by the TMO. Trademark registration applications from overseas applicants added up to 60,335 accounted for 10.26% of total applications. The first time did it exceeded 60 thousand (15,936 therein were Madrid applications for territorial extension).

In 2004, 25,049 registered trademark renew applications, 14,667 registered trademark opposition applications, 51,270 registered trademark change application, 54,946 registered trademark assignment applications, 6,827 registered trademark revocation & cancellation applications, 18,043 registered trademark licensing contract record applications were accepted by the TMO.

In the year, there were 244,852 trademark registration applications examined and 266,619 applications approved by the TMO. A total of 43,916 registered trademark change applications, 58,013 registered trademark assignment applications, 23,964 registered trademark renew applications, 43,725 registered trademark revocation & cancellation applications, 2,120 trademark opposition adjudication applications, 21,262 putting registered trademark licensing contract on record applications were handled.

In 2004, there were 153 well-known trademarks granted by the TMO and the Trademark Review & Adjudication Board under the SAIC (hereafter named Trademark Review & Adjudication Board). There were 151 registered trademarks and 2 non-registered trademarks, 125 from domestic enterprises and 28 from foreign enterprises.

In 2004, there were 10,144 trademark review applications received by the Trademark Review & Adjudication Board. Of these applications, 8,060 were filed for review of dismission of trademark registration application and cancellation of registered trademark, accounted for 80.5% of total applications; 1,978 were filed for review of trademark opposition adjudication and adjudication on disputation over registered trademark, accounted for 19.5% of total applications. Through the past year, there were 6,305 trademark review and/or adjudication cases handled by the Trademark Review & Adjudication Board. Of these handed cases, 6,034 were filed for review of dismission of trademark registration applications and cancellation of registered trademark, accounted for 95.84% the total; 262 were filed for review of trademark opposition adjudication and adjudication on disputation over registered trademark, accounted for 4.16% the total. In 2004, the Trademark Review & Adjudication Board had acted as a party in administrative litigations for111 times, 48 cases were appealed therein.

In 2004, various levels of administrations for industry & commerce across the country focusing on exclusion right protection of registered trademark, further strengthened trademark administrative enforcement. Four special operations successively were carried out to protect the exclusion right of registered trademark. A series of important and outstanding trademark related cases were completely investigated and dealt with. The interests of registered trademarks holders and consumers received effective protection, and the fairly competition order of market economy was actually maintained. According to the statistics, 51,851 trademark violation related cases covering different categories, 38.31% more than that of 2003, were investigated and dealt with by various levels of administrations for industry & commerce across the country. Of these cases, 5494 were foreigner-related, 1.6 times more than that of 2003. And of total trademark related violation cases, 40,171 were trademark infringement & counterfeit involved, 51.66% more than that of 2003,in addition to 11,680 normal trademark violation. In all dealt with trademark infringement & counterfeit involved cases, about 3,8951.8 thousand pieces of trademark violation related marks were seized and ruined; 280,781 sets of instruments—marks printing moulds and printing plates ect. —specially used for trademark infringing were seized; 5,638.53 tons of violation goods were seized and destroyed; 268 million RMB was fined; 96 cases and 82 involved persons were transferred to judicial system for criminal liabilities.

Before the April 26 IPR Protection Publicity Week, a special operation to combat fake manufacturing & selling and to protect IPR was carried out by seven provincial level administrations for industry & commerce in Beijing, Shanghai, Hebei, Shandong, Jiangsu, Zhejiang, Guangdogn provinces or cities directly under the central government, under the uniform arrangement of TMO. According to the statistics, in the special operation, more than 36 thousand person-times had been dispatched; more than 106 thousand various enterprises, emporiums, marketplaces and mark-printing enterprises had been investigated; about 1,280 trademark infringement or trademark counterfeit cases had been accepted or initiatively instituted, and investigated or dealt with; and more than 2,400 thousand pieces (sets) of infringement goods were banned or seized.

Directed by the unified arrangement under the Action Plan of Conducting Special Operation for Exclusion Right of Registered Trademark Protection issued by the SAIC, various levels of administrations for industry & commerce across the country launched several special operations for protection of the exclusion right of registered trademarks in the latter half of 2004. According to the statistics, in the past three concentrated special market regulating actions, more than 24 thousand trademark infringement related cases were investigated and dealt with, 3,828 cases therein were trademark infringement foreign factors involved. More than 25,289 thousand pieces of trademark infringement suspected marks and 103 thousand pieces (sets) of instruments specially used for infringement marks printing were seized. 23,082 thousand pieces of infringement goods and 29 thousand pieces (set) of instruments special for infringement goods manufacturing were seized and destroyed, about 160 million RMB were fined. 75 cases and 43 suspects were transferred to the judicial system.

IV. Comprehensive Advancement in the Area of Copyright Protection

2004 would proven to be a prominent period in the area of copyright protection. In this year, the State Council took Protecting intellectual Property Right, Combating Copyright infringement & Piracy as an important goal in the national level action of reorganizing and disciplining market economy order. The Lead Group of IPR Protection issued the Action Plan for Special Operation of Intellectual Property Protection, which would be effective in one year. And combating copyright infringement & piracy was one of the most important missions in the Action Plan.

According to incomplete statistics, in four province (city) including Beijing, Guangdong, Hunan and Sichuan that were the focus of the Spring Special Reorganizing and Disciplining Actions, nearly 5,000 business units engaged in pirated discs vending were investigated and prosecuted, more than 2 million pirated discs were seized  (more than 700 thousand pirated software discs and 1300 thousand pirated audiovisual products therein), 310 non-authorized discs stores & booths were banned, 8 secrete places for pirated discs manufacturing were destroyed, and 5 pirated discs involved cases were transferred to judicatory system. In the Autumn Special Operation to Combat Textbook & Teaching Assistant Material Piracy, more than 2,300 pirated textbook & teaching assistant materials involved cases were investigated and dealt with and more than 9 million volumes of pirated textbooks & teaching assistant materials were seized across the country. In the Special Operation to Combat Pirated Software carried out from September to November 2004 in ten provinces (city) of China such as Anhui, Shandong, Sichuan etc., 977,038 pieces of pirated software discs were seized, 145 business units or persons who had engaging in illegal business received administrative punishment, 47 business units were banned, one secrete place for violating actions was found and banned.

According to the statistics, 9,691 cases were received, and 9,499 (98.02% of all received 9,691 cases) were concluded, by various levels of copyright administrative authorities across the country. Of all the concluded cases, 7,986 were concluded with administrative punishment, 1,363 were concluded with settlement agreement, 101 were transferred to judicial system. And in the year, more than 85,050 thousand piece of different kinds of pirated products were seized. Of all seized pirated products, more than 18,690 thousand were pirated books, about 1,820 thousand were pirated periodical magazines, more than 39,370 thousand were pirated audiovisual discs, 19,210 thousand were pirated electronic publications, more than 5,520 thousand were pirated software discs, and 420 thousand were other kinds of pirated products.

In Feb., a special action against infringement & piracy to the film Baober in Love was held by various levels of copyright administrative authorities under the arrangement of the NCAC, to guarantee and support the development of domestic film industry. In Oct. 2004, A notice that various level of local copyright administrative authorities should take special and concentrated actions against pirated audiovisual products of the film Shrek 2 was issued by the NCAC. According to the notice, the local copyright administrative authorities had taken special attentions to supervise the pirated products of the film in some main regions. In Nov. 2004, two disc products manufacturing factories respectively in Beijing and Tianjin received administrative punishment from the NCAC for illegally copying the "restoring instrument disc of legend operation system" copyrighted by Microsoft Co.. The investigation and disposal of these outstanding cases had brought relatively better influence in the public.

In 2004, a series of actions of IPR Protection Publicity Week were launched by various levels of local copyright administrative authorities across the country through different channels during one month around the 4.26 World IPR Day. The public were infused with the prominent function of copyright protection in prompting economy development through diversity forms such as speech, symposium, signature, preach in streets, held by local copyright administrative authorities. The mission of the actions was to exhibit some important measures taken by the authorities and the up-to-date effect in the action of market order regulation & cleanup and to strugglingly enhance IPR protection awareness in the public. During the period, the NCAC cooperated with CCTV, News Press, Sohu Website, successfully held the Knowledge Competition of Copyright which was reported by three different kinds of public medium including newspaper, internet, television, and the competition engendered relatively higher tidal wave of publicity in copyright protection area, and received well effect.

On Dec. 22, the Copyright Collective Management Act was reviewed and passed by the Standing Meeting of the State Council. Several issues including copyright collective management, copyright protection in internet circumstance, statutory license royalty, and voluntary registration of works were definitely supplied by the Act.

In 2004, 11,746 various kinds of copyright including 10,040 books copyright were imported into the country by various presses. 1,362 copyrights including 1,314 books copyright were exported and it was observed a relatively large-scale increase.

V. New Progresses Achieved in IPR Customs Protection

In 2004, the customs offices across the country took advantage of formally implementation of newly revised Regulations of Customs Protection for IPR of People's Republic of China (hereafter named as new Regulations), to further improve IPR custom protection system, constantly strengthen the cooperation with other IPR administrative enforcement authorities, judicial organs and IPR holders, further intensify the power in IPR border enforcement, and combat IPR infringement in international trade effectively. IPR customs protection in China entered a completely new era.

The GACC constituted and published Implementing Regulations of Regulations of Customs Protection for IPR of People's Republic of China of Customs of People's Republic of China (hereafter named as Implementing Regulations) to ensure the new Regulations implemented effectively. The Implementing Regulations unambiguously defines some special concept in the new Regulation, including secret treatment of business secret, recording issues of international registered trademark, taking and returning of the bonds, undertaking of related fees by the right holder etc.. With the issuance of a series of law and regulations, IPR customs protection system in China was improved further.

In Sep., the GACC established Online System for IPR Record & Inquiry (hereafter named as "Online System"), in order to accommodate more comfortable information service to export or import enterprises and IPR holders, and for the convenience of related transaction of record applicants. The Online System has the functions of online inquiry of record information, online filing of record application, online management of record information. The establishment of the Online System made putting on records of IPR more open and intelligent. In 2004, 1,350 IPR record applications were approved by the GACC, 795 were trademark involved, 532 were patent involved and 23 were copyright involved. 

With completely intensifying protection for trademark, copyright, patent and Olympic symbols,the customs offices across the country took diversity measures, fully taking advantage of instruments such as venture analysis, to strengthen to combat against IPR infringement in export & import, according to the characteristics and the region distribution principle of the IPR infringement involved cases in various ports. In 2004, a total of 1,051 export & import goods IPR infringement involved cases, valued 84,180 thousand RMB were investigated and dealt with by the customs offices across the country, a respectively increase of 39% and 23.8% compared with that of 2003. Of these dealt with cases, 1027 cases valued 83,520 thousand RMB were export involved and 24 cases were import involved which totally valued 650 thousand RMB. 1,009 cases valued 78,770 thousand RMB involved trademark infringement, 26 cases valued 5,290 thousand RMB were patent infringement involved, 16 cases valued 120 thousand RMB were copyright infringement involved.

For the purpose of combating IPR violation, such as counterfeiting and infringement, customs offices strengthened cooperation with other IPR administrative enforcement agencies. The customs offices across the country strengthened supervising on manufacturing and trading enterprises against severely occurrence of IPR infringement in these kinds of enterprises. And together with administrations for industry & commerce, investigated and prosecuted some manufacturing and trading enterprises engaging in fake manufacturing. On Sep. 15, a company in Guangzhou declared a passel of plastic hair accouterment made from imported raw material to export. After investigation, the Customs Office of Guangzhou city found that 184.8 thousand pieces of hair accouterments labeled "KITTY CAT" design and non-declared 7,200 pieces of wallets labeled "KITTY" design were suspected to infringe trademark possessed by Sanli Co.. The Customs Office communicated Guangzhou Administration for Industry & Commerce instantaneously and made a joint action plan, seized a total of 22,800 pieces of hair accouterments in the manufacturing process suspected to infringe trademark "HELLO KITTY" and its design possessed by Sanli Co. and a set of moulds that suspected to be used to manufacture infringement hair accouterments.

The customs offices of China further strengthened IPR customs protection co-operation with domestic and overseas enforcement authorities and several times seized exported and imported IPR infringement goods taking advantage of the information accommodated by customs offices of Japan, Police of Australia and the Asian Pacific Regions Information Center of World Customs Organization (WCO). In 2004, Customs Office of Guangdong province and HongKong Special Administration Region jointly held administrative enforcement operations three times. In the most recent joint action, the Customs Office of Shenzhen city found and dealt with 12 IPR infringement involved cases, and seized IPR infringement goods including more than 2,000 mobile telephones, more than 20,000 hand bags and more than 1 thousand pirated discs, valued a total of more than one million RMB. The joint operations effectively combated IPR infringement actions in the export & import business between Guangdong province and HongKong Special Administration Region.

The customs offices across the country continued to strengthen IPR publicity, for the purpose of enhancing IPR awareness in the public. During the period of Apr. 26 IPR Protection Publicity Week, the customs offices across the country carried out various kinds of publicity actions through diversity channels, and obtained well social influence.

VI. Sternly Combat Smuggle and Piracy, Promote the Development of Audio-visual Market

In 2004, insisting on the guideline that Promote Culture Flourish as well as Strengthen Culture Market Management, the Ministry of Culture sternly combated smuggle and piracy and promoted the development of audio-visual market. According to statistics, in 2004,the inspection and administrative authorities of culture market across the country totally checked 555,368 audio-visual business units and seized 154 million pieces of illegal audio-visual products, achieved top through the past years.

On July 15, 2004, the Ministry of Culture together with the Culture Department of Liaoning province and the Economy Detector Group of the Public Security Authority in Shenyang jointly investigated and dealt with the 7.15 big illegal business on audio-visual products case and seized 580 thousand pieces of pirated discs. On March 19, the Economy Detector Group of the Public Security Authority in Shenyang captured the suspect and 2 complicities of the "7.15" case. Form July 19 to 20, the culture inspection agencies of Guangdong province and Guangzhou city successively resolved two big cases of illegal business on audio-visual, respectively seized 1.07 million and 1.57 million pieces of different kinds of illegal audio-visual products (most of them were films form the U.S.A), and seized more than 50 tons of covers of illegal audio-visual products. In the middle of September, they again banned 6 warehouses where the illegal audio-visual products were deposited, seized 600 thousand pieces of illegal audio-visual products. From 10 to 12 October, the Ministry of Culture and the Culture Department of Henan province caught a passel of secret warehouses in Zhengzhou city, and seized more than 500 thousand pieces of illegal audio-visual products.

In July, the Ministry of Culture continuously published notices to urgently mobilize the inspection and management staff of the culture market across the country in order to sternly fight against the pirated products of the film House of Flying Daggers. 53 thousand pieces of pirated discs of the House of Flying Daggers in ten versions were seized in the whole country. The culture department and public security authorities at various levels basically controlled the market and the high definition version of pirated audio-visual products of House of Flying Daggers had never been brought into the market as a result of mobilizing immediately and acting rapidly.

In Dec., the Ministry of Culture issued the check list to instruct the inspection work of local culture departments. The pirated audio-visual products of the films with intense attraction in the market, such as film A World Without Thieves, film Kungfu Hustle, TV series Hanwu Emperor, etc. received sternly combating.

Form Oct., a kind of pirated audio-visual products, DVD compressed disc, impacted the audio-visual market greatly, and engendered sharply decrease of the sale of the legitimate audio-visual products, especially of the sale of films and TV series. On November 3, the Ministry of Culture issued the open telegraph of Urgent Notice on Conducting the Winter Action to Clean up the Audio-visual Market Immediately and Sternly Fight Against the DVD Compressed Disc. The Notice requests the inspection agencies of culture market at various levels to sternly fight against the pirated DVD compressed disc and seize all kinds of illegal audio-visual products including pirated DVD compressed disc. The related authorities across the country acted rapidly, and made certain achievement respectively in Guangdong, Sichuan, Hubei province etc. 3 million sets of pirated DVD compressed discs were caught only in Guangdong province, and 200 million RMB loss of the business units was retrieved.

In the last ten-day of May, in order to enhance the awareness of IPR in the teen-age, especially students in school, the Ministry of Culture, the Ministry of Education and the Central Committee of China Communist Youth Legal, taking advantage of the characters of the audio-visual market, jointly conducted the legal system publicity, Respect Knowledge and Refuse Piracy, on audio-visual market across the country. The mission of the action was to positively induct the teen-age voluntarily resisting the piracy, to improve their capability to discern the real and the fake and to develop the correct consensus direction and consume concept among the teen-age. From June, the Ministry of Culture, the Ministry of Education vigorously cleaned up the culture market around the campuses across the country, sternly combated the illegal audio-visual products which were harmful to the health of the minor's body and mind. Openly playing, selling, renting of and diffusing through diversity channels including internet of the audio-visual products which contained eroticism and obscenity content were forbidden

In 2004, the Ministry of Culture issued the Notice on Strengthening and Improving the Management of the Import & Export of Audio-visual Products . The authorized exertion of the copyright, content examination, publication and the content of copyright trade contract etc, of the imported audio-video products were ambiguously defined. The import of audio-visual products in disguised forms or in parallel form was forbidden in any occasions. The same audio-video products authorized to different units during the same authorization period by different carrier (such as video tape, VCD, DVD, etc.) or different recorded format was forbidden. And the provision that authorized period of a program must exceed 3 years is supplied in the notice. With the issuance of the Notice, the relationship between related parties in the import of audio-visual products became coordinative, the import order became more normative.

VII.The Public Security Authorities Sternly Fight Against the Crime of infringement and Piracy

In 2004, the public security authorities across the country continued to push the action against pornographic and illegal into deep and to sternly fight against the crime of infringement and piracy. A total of 30 thousand infringement and piracy cases were resolved. 21 assemblies lines for illegal disc producing, 130 million infringement and piracy publications were seized. More than 2,960 illegal printing spots were banned by the public security authorities together with other agencies.

The Ministry of Public Security strengthened the supervision of the disposal of important and outstanding cases. They successively supervised the disposal of Chongqing "6.7" producing and selling piracy publications cases, Beijing "5.28" pirating textbooks and assistant teaching materials case, Guangzhou of Guangdong province "7.26" producing and selling pirated discs case, etc. They coordinated and instructed the involved public security authorities to intensify the power of investigation and disposal of the cases and to capture the suspects involved. The public security authorities in Hebei,Jiangsu, Jiangxi, Shandong, Henan, Guangdong, etc, resolved a group of infringement and piracy cases successively, such as Zuo Jinchun producing and selling pirated publications case. According to statistics, in 2004, the public security authorities across country totally resolved more than 1000 important cases of infringement and piracy. The leading suspects of Jiangsu "9.26" pirating textbooks and assistant teaching materials case and Guangzhou "3.05" producing and selling pornographic and pirated publications case were sentenced to penalty of imprisonment respectively from one year and four months to nineteen years for crime of infringing copyright and crime of illegal business.

As the main force to dig up assemblies line for illegal discs producing, the public security authorities continuously strengthened the detective power through diverse manner to dig up assemblies line for illegal disc producing, and to hold back the illegal action of infringement and piracy from the headstream. 21 assemblies line for illegal disc producing were seized in 2004 across the country and the total number since 1996 had arrived at 200. Among the seized in 2004, 15 were in Guangdong province, 4 of one case were in Jiangxi province and 2 were in Hunan province.

The public security authorities together with related departments, such as press and publication authorities, strengthened the examination to the publication market, seized a great deal of pornographic and pirated publications. Specially aiming at the phenomena that high compressed pirated disc HDVD appeared in publication market in the latter half of the year, the public security authorities together with related authorities conducted a concentrated action, and seized a passel of pirated discs and banned a group of spots for pirated discs producing or selling. Especially on July 26, the public security authorities in Guangdong province together with related authorities caught 5 spots for pirated discs depositing and seized 5.7million pieces of pirated discs in Fanyu district of Guangzhou city.

VIII. Considerable Achievement in Plant Varieties Protection

In 2004, the Ministry of Agriculture (MOA) and the State Forestry Administration  (SFA) strongly popularized the knowledge of new plant varieties right (PVR) protection in the public across the country, increased the number of independently owned PVR, intensified administrative enforcement for PRV protection, and created social atmosphere and market environment for respecting and protecting PVR. Considerable achievement in PVR protection was made in the past year.

In 2004, 735 new PVR applications were accepted by the MOA, an increase of nearly 30% compared with that of 2003, and 75 new PVRs were granted. The MOA had accepted 2,046 PVR applications and granted 503 therein, from 1999 to 2004. 36 PVR applications were filed with the SFA in 2004, 19 applications therein were respectively from France, the U.S.A., German, and 16 PVRs were granted by the SFA.

In 2004, the MOA held administrative enforcement pilot works for agricultural new plant varieties protection in second group of six pilot provinces. Through two years pilot works, 650 PVR applications were filed from the first group of six pilot provinces, it accounted for 1/3 of total applications from domestic applicants. PVR protection awareness in agricultural system was markedly enhanced in first group of six pilot provinces, and administrative enforcement was strengthened as well.

According to the statistics from 17 provinces or cities, agricultural administrative authorities had investigated and dealt with 299 PVR infringement involved cases and 564 counterfeiting of granted PVR involved cases, from 1999 to 2004, and maintained fair competition rules in the market.

In 2004, the MOA organized related agencies to develop test guideline for 11 new plant varieties, which established the basis for further expansion of protection catalogues of new agricultural plant varieties and the standardization of new agricultural plant varieties test technology. In this year, the MOA held the First National Conference for Exhibition of Right Granted Agricultural Plant Varieties and PVR Exchange in Luoyang city, Henan province. And about 500 participants from nearly 300 breeding enterprises attended the Conference. A farmland exhibition of right granted plant varieties, a PVR development strategy forum and PVR exhibition and exchange were arranged. In the Conference, the Regulations on the Protection for New PVR of People's Republic of China was widely and deeply publicized, and also the achievement of five years' new agricultural plant selective breeding and PVR protection in China were exhibited. The Conference as well accommodated a platform for PVR exchange, and would promote transferring from PVR to actual productivity.

On Oct. 14, the SFA issued the 4th new plant varieties protection catalogue, which including 32 plant categories such as Cycas Linn. Ulmus Linn. Michelia Linn. Loropetalum R. Br.  Cotinus Mill. Lycium Linn. etc.

The SFA began to initiate the establishment of test guideline, related database of known plants categories (genus), and new plant varieties test organs, through the initiative of fundamental construction project such as test centers, sub-centers and laboratories and the establishment of special test bases.

By the end of 2004, PVR applications filed with the SFA from overseas applicants had amounted to 64 pieces. In order to conduct effective essential examination on these applications, the SFA bought more than 20 test reports from EU PVR Protection Office.

From Jun. 12 to 13, the MOA, the SFA, the SIPO and the UPOV, jointly held the Conference on Advantages of International Convention for New Plant Varieties Protection 1991 Text and International Cooperation Protection for New Plant Varieties and Conference on Data Processing Technology on PVR Protection. The successfully holding of these two conferences promoted the dialogue between China and the UPOV or its members, and made practitioner in Chinese seeds breeding industry understanding more the difference between International Convention for New Plant Varieties Protection 1978 text and 1991 text, and made them understanding more data processing technologies and new plant varieties test technologies.

On Jun. 14, the SFA held the First National Symposium on Flower IPR Protection. Dully officer of flower industry authorities in more than 10 provinces (cities) and principals of more than 20 leader flower enterprises attended the symposium. In the symposium, the attendants formulated and passed general advices on Chinese flower IPR protection.

IX. Continuous Improvement of Judicial Protection for Intellectual Property Rights

With nearly 30 years' durable efforts, a relatively completed IPR judicial protection system has been established in China. The power of IPR judicial protection has been increasingly intensified, and the level of protection has been enhanced constantly. IPR judicial protection in China is composed of three main components including civil, administrative and criminal judicial protection, in which the civil judicial protection constitutes the basis of the entire system. To protect relevant right owners' legitimate interests and maintain the order of the socialism market economy, people's courts at each level around China try IPR disputes and severely punish IPR crimes in accordance with law.

The mechanism of juridical organs handling IPR related cases is relatively completed in China. By the end of 2004, divisions specialized in the trial of IPR cases had been established respectively in all Higher People's Courts at provincial level, Intermediate People's Courts in all provincial capital cities and some other big cities and even in certain Primary People's Courts. The IPR trial division in the Supreme People's Court was set up in October 1996, and was renamed as the Third Civil Division in 2000.

The system of IPR litigation has been improved constantly, and a fairly comprehensive IPR judicial interpretation system has been formed. In December 2004, the "Interpretations on Several Issues on Application of Law for Trial of IPR Criminal Cases by the Supreme People's Court and the Supreme People's Procuratorate" and "Interpretations on Several Issues on Application of Law for Trial of Technology Contract Cases by the Supreme People's Court" were formally issued and put into effect. The criteria for prosecuting and sentencing IPR crimes have been further clarified and properly lowered. The rules for applying technology contract laws have been unified.

In order to ensure the quality of trails, the jurisdiction over IPR cases in China is relatively centralized. In respect of cases involving patent, varieties of new plant and layout designs of integrated circuits, designated jurisdiction has been adopted. The Supreme People's Courts has respectively appointed 49, 34 and 43 Intermediate People's Courts to try the abovementioned kinds of case in first instance。The arrangement of the jurisdictions is basically reasonable. Civil cases involving other kinds of IPR should in general be handled by intermediate or above people's courts. In 2004, 90.76 percent of IPR cases were tried by intermediate or above people's courts in China。

People's court across the country offer judicial relief to parties concerned, and have accepted and concluded a great deal of IPR disputes. From 1985 to 2004, local people's courts have accepted a total of 69,636 IPR civil cases in first instance, and concluded 66,385. Of all the accepted cases, 18,654 were patent involved, 14,708 were copyright disputes, 6,629 were trademark cases, and 8,368 were other kinds of IPR cases.

IP civil cases that people's courts accepted were continuously and rapidly increased in recent years. In 2004, people's courts across the country accepted 12,205 IPR civil cases covering first instance, second instance and re-trial proceedings, with an increase of 31.65 percent over that of the previous year.  About 11,113 cases have been concluded, 23.78 percent higher than in 2003. Of all the docketed cases, 9,329 were first instance cases with an increase of 33.51 percent, and 8,332 were concluded with an increase of 21.46 percent compared with the year of 2003. By the conclusion of these cases, around 2,980 million RMB disputed value has been settled. In the same year, the number of civil cases involving copyright, patents and trademarks increased evidently, about 4,264 copyright cases, 2,549 patent cases and 1,325 trademark cases were accepted, with respective increases of 71.16, 20.81 and 43.09 percent compared with that of 2003, among which, copyright cases reached the most increase. The proportion of cases involving ownership and infringement of IPR was relatively higher, amounting to 86.86 percent of all accepted IPR civil cases in 2004. Among the concluded cases in first instance in 2004, 365 cases involved factors of foreign countries, Hong Kong, Macau and Taiwan, with an increase of 88.14 percent over that of 2003, and accounted for 4.38 percent of the total concluded cases. Of all the overseas related cases, 151 cases were involving foreign enterprises, organizations and individuals, 111 cases were Hong Kong and Macau related, and 58 cases were Taiwan involved, with respective increases of 60.64, 91.83 and 38.1 percent compared with that of 2003. In 2004, the Supreme People's Court concluded 78 IPR cases, 16.4 percent more than in 2003.

People's courts across the country highly regarded and actively but cautiously applied various provisional measures including preliminary injunction, pre-trial preservation of property and evidence and measures in the course of proceedings, such as preservation of property and enforcement in advance, to instantaneously deter infringements and effectively prevent the further loss of right holders. According to uncompleted statistics from Beijing, Shanghai, Guangdong, Jiangsu, Shandong, Zhejiang, people's courts in above mentioned areas have accepted 257 applications for preliminary injunction and pre-trial evidence preservation since the revisions of the Patent Law, the Trademark Law and the Copyright Law, among which, 183 applications were granted in accordance with laws. The proportion of approval amounted to 71.21 percent.

The administrative judicial protection for IPR by people's court is mainly to fulfill the function of judicial review over the administrative enforcement of IPR, i.e., to uphold proper administrative enforcement actions and to rectify those administrative actions incompliance with laws. Since 1987, people's courts have accepted a total of 1,703 IPR administrative cases in first instance, and concluded 1,654, mostly involving patent re-examination and invalidation disputes, trademark review and cancellation disputes. In 2004, people's courts across the country accepted 526 IPR administrative cases, 35.21 percent increase over in 2003; around 549 cases have been concluded, 40.05 percent higher than the previous year.  Among the accepted cases, there were 377 patent related cases, 141 trademark related cases, with increases of 26.51 and 98.59 percent respectively, but only 8 cases were copyright related, 60 percent decreased comparing with in 2003.

As for the IPR criminal judicial protection, a total of 387 IPR criminal cases were accepted by people's courts across the country in 2004, 385 were concluded, and 528 accused were sentenced to be guilty. Trademark crimes were the most of IPR criminal cases, amounting to 82.94 percent of total cases in 2004. Crimes involving trade secretes infringement took the second position which accounted for 13.4 percent of total criminal cases in 2004. The main features of IPR criminal cases include (a) that complicities and corporate crimes were significantly involved, (b) that measures adopted by criminals were complicated and most are intelligent crimes, (c) that crimes were often carried out consecutively and cross multiple regions, and (d) as to the penalty, terms of imprisonment usually were relatively shorter, most less than 5 years, but criminal fines were usually imposed simultaneously. In addition to the IPR crimes, 932 and 1,434 cases respectively related to crime of manufacturing or selling false and inferior commodity and crime of illegal business were concluded by people's courts across the country in 2004, and 1,961 and 2,526 accused were sentenced to be guilty, among these criminals, many of them were IPR infringers. 

X. Further Development and Expansion in International Cooperation

From September 27 to October 5, Mr. Wang Jingchuan, Commissioner of SIPO, led the Chinese delegation, comprising SIPO, SAIC, NCAC and Chinese permanent mission to the United Nations and its organizations in Geneva, to attend the 40th Series of Meeting of the Assembly of WIPO. The delegation participated actively in the discussion of an array of topics, the agenda on suggestion of WIPO development, fee adjustment of the PTC, the new plan of the Standing Committee of Paten (SCP), request from CBD member, protection the right of the broadcasting organizations, as well as the Trademark Law Treaty, etc.

During the WIPO Assembly, the Chinese delegation organized a children paintings exhibition, Intellectual Property in Children' s Eyes, at the WIPO headquarters in Geneva. The 100-meters-long paintings, created in 2001 by the children from Heilongjiang province for the protection Intellectual Property, become a popular scene at the meeting venue.

Form April 20 to 21,SIPO, Development Research Center (DRC) of the State Council and OECD jointly held High-level Workshop on Intellectual Property Right and Development of Economy in China-Meeting Challenges and Opportunities Following WTO Entry. The objective of the workshop was to make policy maker and other stakeholders to understand the importance of IPR policy in knowledge based economy, to draw lessons from the experience of OECD and other countries, to benefit from international organizations and international firms in improving IPR policy and IPR management in an open and increasingly globalized economy, to review the current or envisaged IPR reforms in China, to discuss the development of institutional, legal and regulatory IPR frameworks in China and to promote the establishment and implementation of national IPR policies. Vice Premier WU YI sent a written address for the opening ceremony of the workshop. The workshop brought together about 300 participants, including senior officials and experts from OECD countries, officials of relevant Chinese government agencies at central and municipal levels, representatives from OECD and other international organizations, such as WIPO, WTO, as well as Chinese and foreign business executives. 

On December 15, WIPO Asian Regional Workshop on Intellectual Property (IP) for Managers and Staff of Small and Medium-Sized Enterprises (SMEs) and SME Support Institutions, co-organized by SIPO and WIPO, was held in Shanghai. More than 100 participants form 22 countries of Asia-Pacific Region, Chinese governments, research institutions and SEMs attended. In the three-days workshop, relevant officials, experts and scholars delivered splendid presentation and discussed in-depth how SEMs to make IP marketing and branding strategies, how SEMs leverage IP to improve enterprise competitiveness, how to utilize and develop IP assets of SEMs, disputation settlement and effective exploitation.

From February 19 to 27, under the framework of Euro-China intellectual property right co-operation program, SIPO and the European Patent Office jointly held a series of large international symposiums on IPR and the Enterprise Development respectively in Harbin of Heilongjiang province, Shenyang of Liaoning province and Tianjin. The symposiums drew a total of 500 participants.

From June 20 to 30,2004, Mr. Li Dongsheng, Deputy Director General of SAIC led a delegation to visit France and Spain to draw lessons from their geographical indications systems.

From October 25 to 29, Mr. An Qinhu, Director of TMO of SAIC, attended the 13th meeting of Standing Committee on the Law of Trademarks, Industrial Designs and Geographical Indications held in Geneva of Switzerland. The revision of Trademark Law Treaty was discussed in the meeting.

In 2004, NCAC participated in the WTO transition review of intellectual property protection of China, the APEC Experts Conference, and the intellectual property negotiation between China and European. Cooperating with relevant agencies including MOC, NCAC betimes provided the basic information about the copyright protection in China and the principle for disposal of relevant question, successfully dealt with the copyright issues overseas factors involved. In March, NCAC attended the bilateral consultation and negotiation between China and the U.S.A. at the workgroup level. NCAC provided the opinion on the copyright legislation, enforcement and policy for Leading Workgroup on Commerce and Trade with the U.S.A., and promoted the successful solution of the IPR problem between China and the U.S.A..

In 2004, NCAC attended the relevant meeting of WIPO and exchanged opinions with WIPO on protection for folklore, protection for the copyright of broadcasting organizations, copyright enforcement and the related issues of library and education agencies in the digital context. NCAC also illustrated the attitude and position of Chinese government on the establishment of international convention.

The last ten-days of May, Chinese delegation, led by Mr. Liu Wenjie, Deputy Director General of GACC, attended First Global Congress on Combating Counterfeiting, jointly held by the World Customs Organization (WCO) and Interpol. During the meeting, the delegation publicized the policy, standpoint and achievement of Chinese government in intellectual property protection.

From November 22 to 23, GACC successfully held the Global Congress/WCO Regional Forum on Protection of Intellectual Property Rights in Shanghai. The forum brought together approximately 180 participants from WCO, Interpol, WIPO, non-governmental organizations of IP protection, the Customs Administrations of European Union and Asia-Pacific Region and domestic government agencies. The topics respectively on the legislation of border enforcement for IPR, combating the counterfeiting and piracy, the punishment of the infringement behavior and the international cooperation were fully discussed. By the end of the Forum, all delegates agreed to pass the Shanghai Initiatives, a document which appeals the Asia-Pacific region to jointly combat counterfeiting and piracy and strengthen the cooperation among these customs administrations.