Report on the Intellectual Property Rights Protection in Zhejiang Province in 2004

Zhejiang People¡¯s Government implemented State Council¡¯s policies on the protection of intellectual property rights (IPR) in 2004. The government attached great importance to the protection of IPR and took concrete measure to keep economic order in the market. IPR administration at all levels in Zhejiang Province made a concerted effort to wage a war against illegal IPR infringement crimes, thus strengthening the administration and protection of IPR. Both administrative and judicial protection had achieved favorable results. The social atmosphere of ¡°Respecting others¡¯ IPR and protecting one¡¯s own IPR¡± comes into being in a step-by-step manner in Zhejiang Province.

I. The government attached great importance to IPR and the market environment was improved.

-- The legal system concerning IPR was improved. In 2004, provincial government formulated new rules and regulations on IPR protection on the basis of the careful implementation of Patent Law, Trademark Law, Copyright Law, Regulations of Zhejiang Province on Patent Protection, and Regulation of Zhejiang Province on Famous Trademark Protection. Administration Regulations on Commodity Exchange Market in Zhejiang Province and Ningbo Patent Administration Regulations formulated by the standing committee of provincial people¡¯s congress were implemented in January 2004. Zhejiang Quality & Technology Supervision Bureau issued the Notice of Further Strengthening Protection of Products of Origin and participated in the composition of 14 national compulsory standards (6 have been approved by State Standardization Administration Committee). Zhejiang Administration of Commerce & Industry issued Notice of Further Strengthening Supervision over the Printing of Trademark. 15 government bodies, including Zhejiang Procuratorate and Public Security Department, jointly worked out Provisions on the Referral of Suspected Criminal Case by Administrative Organ for Law Enforcement. 12 departments, including Zhejiang Intellectual Property Rights Bureau, Administration of Commerce & Industry and Zhejiang Copyright Bureau, jointly worked out Suggestions on Strengthening the Protection of Intellectual Property Rights in Exhibition Industry. The formulation of laws and regulations concerning IPR provided legal safeguard for IPR protection.

-- The special action on IPR protection was launched in an all-round way. As deployed by State Council, provincial government launches a special action on IPR protection in Zhejiang Province from Sep. 2004 to the end of 2005 for a stronger protection of IPR in Zhejiang. A special action group of IPR protection was established with Mr. Jin Deshui, Deputy governor of Zhejiang Province as the group leader, and 16 departments as the group members, i.e. Zhejing Economy & Trade Committee, Legal System Office, Public Security Department, Administration of Commerce & Industry, Copyright Bureau, Intellectual Property Rights Bureau and Hangzhou Customs. The action group is responsible for the coordination of IPR protection in Zhejiang Province. The IPR law enforcement department of Zhejiang Province carried out the IPR protection special action in an all-round way in addition to its regular supervision and administration. IPR protection offices were established at all levels to work out the plan with the protection of trademark right, patent right and copyright as emphasis, commodity import & export, exhibitions and wholesale markets, processing by sample, printing and copy as key elements and with the seriously affected area by fake trademark and piracy as the key areas. Special action on IPR protection has achieved favorable results.

-- An effective administration mechanism for IPR protection was established in a step-by-step manner. Governments at all levels seized the opportunity of the special action on IPR protection and seeked both temporary and permanent solutions, i.e. the establishment of a long-term and effective mechanism for IPR protection. In 2004, Hangzhou carried out the restructuring of cultural market management and the reform on law enforcement, the first of such moves in Zhejiang Province. Culture Bureau, Broadcast & Television Bureau and Press & Publishing Bureau of Hangzhou are amalgamated into Hangzhou Culture, Broadcast Television and Press Publishing Bureau. The law enforcement functions of the former 3 bureaus are combined into administrative and legal corps of Hangzhou cultural market, thus strengthening the law enforcing ability and coordinating the management functions in the markets of audiovisual products and electronic publications. IPR administration of various levels has vigorously explored the effective ways to strengthen IPR protection in exhibition industry. The departments of IPR, Commerce & Industry, copyright and quality supervision from Wenzhou made joint administrative efforts to enforce IPR law in 2004 China (Wenzhou) Scientific and Technological Achievement Fair, 2004 China (Wenzhou) Light Industry Product Fair, thus improving the IPR protection in exhibition industry. During 2004 China International Small Commodity Fair n Yiwu, IPR administration from Jinhua and Yiwu sent law enforcement personnel to the exhibition center for IPR consultation and rights defense.

-- The propagation of IPR protection is strengthened. It is a long-term task for governments at all levels to consistently carry out IPR propagation and training for a better social awareness of IPR. The concerning departments in Zhejiang Province popularize IPR protection education in various forms. IPR Protection Week was launched in Zhejiang in 2004 around the April, 26 World IPR Date. Zhejiang IPR Bureau, Administration of Commerce & Industry and Copyright Bureau jointly made a 9-episode TV series on IPR protection and law enforcement and held 5 symposiums during the Week. Zhejiang IPR Bureau gave some wall maps of IPR and books on enterprise IPR management to the local government. Zhejiang Copyright Bureau designed and made two public service announcements about IPR protection. News release conferences were held by Zhejiang Quality & Technology Supervision Bureau on the products of origin, such as Shaoxing Wine, Longjing Tea, Hangzhou White Chrysanthemum, Jinhua Ham, Changshan Pomelo, Anji White Tea, Tangxi Loquat, Huangyan Tangerine and Wuniu Early Tea. IPR administration at all levels printed 40,000 brochures in over 10 categories and accepted about 50,000 persons for consultation.

-- IPR protection training is improved. Training courses on IPR protection were held for a better understanding of the special action on IPR protection. Zhejiang Procuratorate hosted IPR protection training on how to fight against producing and marketing fake and shoddy goods. Administration of Commerce & Industry hosted 2 terms of IPR training courses for better understanding of the strategy of famous brand among enterprises. Copyright Bureau, Information Industry Department and Financial Department of Zhejiang hosted the training program to promote the usage of original software among provincial and municipal governments. Hangzhou Customs hosted IPR custom protection training and symposium in Jinhua and Yiwu. Zhejiang IPR Bureau hosted the crash course on patent law enforcement. Hangzhou Trade Bureau and Hangzhou IPR Bureau hosted IPR training courses with the participants from over 70 business and trade enterprises. Ningbo IPR Bureau held the symposium on patent protection and invited IPR administration and judicial authority to discuss and exchange views on the assessment of illegal patent infringement. Training and propaganda on IPR improved the public understanding of the necessity of special action, thus serving as important condition for the implementation of the action.

-- External cooperation and exchange are carried out through various channels. In 2004, in order to promote the cooperation and exchange with the foreign IPR organizations, Zhejiang IPR administration received the IPR investigation groups from the US, Japan and European countries and introduced China¡¯s laws and regulations on IPR and the situation in Zhejiang Province. Several suspected IPR infringement cases were investigated. Symposiums and training were jointly held with foreign IPR organizations to deepen the mutual understanding and trust with the visiting countries and nongovernmental bodies. In March, Administration of Commerce & Industry, IPR Bureau and Trade Promotion Committee, jointly with the consulate of Japan in Shanghai and Japanese Economic Industry Province, held the symposium on Japan-Zhejiang strengthening IPR protection. In May, Zhejiang IPR Leading Group Office and Yiwu municipal government entertained the consul group from the U.S. consulate in Shanghai who are on the investigation tour of IPR protection. In October, the Chairman of Spainish Export Enterprise Association visited Zhejiang IPR Bureau on the issue of the patent protection in Spain. Public Security Department undertook the training about IPR law enforcement hosted by Queen Mary University of London. In November, Hangzhou Customs participated the World Customs IPR Protection Forum sponsored by World Customs Organization and General Administration of Customs.

II. Situation of IPR Protection in Zhejiang Province

1. Patent protection

In 2004, there were 137 cases of patent disputes accepted in Zhejiang with 127 closed, a closing rate of 92.7% and 21 cases of fake patent. In the special action on IPR, the commercial places were examined 209 times with 109,100 pieces of commodity under inspection. Zhejiang has established patent protection cooperation mechanism with 16 provinces. Zhejiang cooperated with Jiangsu and Shanghai in the building of patent case transfer system in 16 cities in Yangtze River Delta.

In 2004, there were 25,294 patent application cases with 15,249 approved, an increase rate of 17.9% and 5.9% respectively than last year, taking the 2nd place in China. Among these application, there were 3,578 invention patents, an increase of 30.1% than the same period of last year and 785 approved, 97.3% increase than the same period of last year. Zhejiang University applied 873 patents in 2004, taking the 1st place among the universities in China. Hangzhou, Ningbo, Wenzhou, Jinhua and Shangyu were appointed as State level pilot cities of IPR by State IPR Bureau. There are 135 patent demonstration enterprises in Zhejiang. By the end of December, there are 27 patent agents and 12 patent offices established in Zhejiang and 4 are authorized to accept foreign customers.

2. Trademark protection

In 2004, there were 74,604 registered trademark applications with 30,873 approved and 179,000 accumulated registered trademarks, an increase of 31%, 22% and 17% respectively than the last year. The number of accumulated registered trademarks is the second in China. There was a sharp increase of the trademark application in foreign countries with 550 registered, 267 approved and 3,493 accumulated. In 2004, there were 17 new reputed trademarks in Zhejiang, making the total to 45 and taking the 1st palce in China. There are 1,021 famous trademarks in Zhejiang, taking the 1st place in China. There were 9 newly applied certification marks (geographical symbols) in 2004, making the total to 22, 1/5 of the total of China, taking the 1st place in China.

A collaboration network for IPR protection of commerce and industry was set up in the eastern China in 2004. The administration of commerce and industry of Zhejiang Province investigated and punished 5,621 cases of illegal trademark infringement with the total penalty of 85,070,000 RMB and 11,280,000 sets of trademarks taken over and eliminated, among which 929 were ordinary illegal trademark cases and 4,692 infringement cases. There were 43 IPR infringement criminal cases delivered to judicial body with 43 people involved. There were 1,270 cases of infringing the lawful interests and rights of foreign trademark registrant, 25% of the total infringement cases, among which 1,248 are counterfeiting foreign registered trademarks. Administration of Commerce and Industry issued 10 trademark infringement cases, i.e. the trademark infringement of ¡®S MSUNG¡¯, ¡®Panasonic¡¯, ¡®BOSCH¡¯ for vacuum cleaner by Ningbo Huachanng Electrical Appliance Co.

3. Protection of Copyright

In 2004, all levels of copyright administrative departments in Zhejiang Province carried out special activities of ¡°Protecting national copyright industry and cleaning up pirated cartoon products¡±, struck Internet private game servers and lug-ins, pirated software, movies such as ¡°Baober In Love¡± and ¡°Shrek 2¡±, 2004 teaching materials and so on, confiscated 8,6000 pirated books, software, media products and E-publications, confiscated 7,6000 pirated software and wiped out a lot of manufacturer and dealer of pirated software, accepted 13 cases of copyright violation.

The data published by China Copyright Protection Center has shown that 1,064 copyright was registered in 2004, making up 7.13% and taking the 4th place in China. In August 2003, all 47 departments of provincial government purchased and installed original edition of operating system, office and antivirus software, becoming one of the earliest provincial governments in China that use purchased general-purpose software. The governments of Hangzhou and Ningbo cities completed the same work by the end of 2004 and other cities and counties are under way.

The provincial copyright administration has continuously strengthened oversea copyright trade, registered 708 works, 1043 contracts of book publication, 308 oversea media products and 233 E-publications in 2004. Zhejiang Province imported 203 copyrights last year, including146 books and 57 media products, and exported 11 books.

4. Protection of origin product

Zhejiang is the earliest province in China that conducts the protection of origin product. Since ¡°Shaoxing Wine¡± was approved to be the first ¡°Origin Product¡± in China on January 30, 2000, 15 products have been so far approved national origin product, enabling Zhejiang to be the province owning the most origin products in China.

By the end of 2004, Zhejiang¡¯s national origin products are: Shaoxing Wine, Longjing Tea, Jinhua Ham, Hangzhou White Chrysanthemum, Longquan Celadon, Qingyuan Lentinus Edodes, Changshan Shaddock, Xinchang Xiaojingsheng Peanut, Anji White Tea, Tangxi Loquat, Yuyao Bayberry, Huangyan Tangerines, Xiaoshan Dried Turnip, Wuniu Early Tea, Cixi Bayberry.

5. Media Product Market Rectification

All cultural administrative departments of Zhejiang Province accepted 7,668 tip off phone calls and called out 152,300 person/time to examine 257,200 cultural dealers, banned 3952 interlopers, confiscated 3,016,200 illegal matters including 2,341,600 illegal media products, 591,600 illegal books, 55,800 illegal performance apparatus and computer games. 5297 businesses of illigal operation were given administrative penalty, including 260 businesses disqualified for operation.

The culture and cultural relic inspection departments in Zhejiang Province strengthened secret inquiries in cities and counties by keeping at least one team to make secret inquiries every day since February 2004. They examined each city and county at least twice in 2004, accepted 203 tip off information, called out 1,645 person/time, inspected 3,836 cultural businesses and ferreted out 1,352 businesses of violations. Against the problem found in the secret inquiries, the inspection departments issued a notice duly with the VCD recording secret inquiry information as the evidence, and urged every city and county to handle timely and report. Satisfied results have been achieved.

6. Protection of Intellectual Property Rights in Customs

In 2004, Hangzhou Customs ferreted out 36 cases of violating IPR, including 1 case suspected to violate patent rights ferreted out by Huzhou Customs and 35 cases suspected to violate trademark rights ferreted out by Yiwu Office of Jinhua Customs, post office of Hangzhou Customs and Wenzhou Customs, relating to the trademarks of ¡°KIWI¡± shoeshine, ¡°Tiger head¡± flashlight, ¡°Gillette¡± shaver, ¡°Marlboro¡± cigarette, ¡°B&H¡± cigarette, ¡°Nike¡± sports shoes and packages, with involved value of about 650,000 RMB.

7. Cracking down Crime of Violating IPR

In 2004, all public security organs accepted 209 cases of violating IPR, registered 162 cases with involved amount of 129,745,000 RMB, cracked 144 criminal cases and recovered illicit money of 17,873,800 RMB, detained 132 person/time, arrested 53 person/time, removed 107 cases for prosecution. The cases are divided into 59 cases of counterfeiting registered trade marks, 57 cases of illegally making registered trademark signs and selling such signs, 37 cases of selling counterfeited registered trademark commodities and 9 cases of violating trade secret.

Now, the crime of violating IPR in Zhejiang Province appears to enlarge its scale, have complex criminal bodies, take more specialized and intellectualized means, and in collusion with oversea and internal lawbreakers.

8. Foreign Trade and Other Intellectual Property Rights

In 2004, 190 ¡°Essential developing export brands¡± (hereinafter referred to as ¡°Export Brands¡±) were appraised in China, of which Zhejiang had 51, taking the 1st place in the whole country. Chint, Qianjiang, Cathaya, Busen and a lot of Export Brands ranked in the list. Zhejiang Province signed and introduced 330 technical contracts with a total amount of US$558,000,000, of which the patent and know-how grant or transfer were US$315,000,000 and US$59,000,000 respectively, making 56.5% and 10.6% of the above-mentioned total amount. In 2004, there were 35 enterprises in Zhejiang Province (not including Ningbo city) that operated software export, accepted 198 software contracts with a total amount of US$26,020,000.

In 2004, the foreign trade in Zhejiang Province stepped a new stage. The accumulated import/export amount of Zhejiang Province was US$85.229 billion, increasing 38.76% over 2003; 3824 foreign invested enterprises were established with a total investment amount of US$28.8 billion, contractual foreign capital of US$14.561 billion and realized foreign capital of US$6.681 billion. Foreign economic cooperation of Zhejiang Province reached US$1.525 billion; new contract amount was US$1.68 billion; exported 9408 labors and by the end of 2004 there was altogether 26,387 labors overseas. In 2004, 378 enterprises invested abroad are approved with total investment of US$168 million and Chinese investment of US$152 million. By the end of 2004, accumulated foreign invested enterprises reached 32279 with total investment of US$121.527 billion, contractual foreign investment of US$62.877 billion and realized foreign investment of US$29.002 billion. Accumulated enterprises invested abroad of Zhejiang Province reached 1760 with total investment of US$781 million and Chinese investment of US$599 million.

In 2004, the provincial administration of IT industry accelerated the development of software industry, certified 380 software enterprises, taking the 5th place in China, and registered 1609 software products taking the 4th place in China. The provincial administration of foreign trade and economic relations accelerated the construction of enterprise innovation system, increased 2 national enterprise technological centers (accumulated to 13), increased 28 provincial enterprise technological centers (accumulated to 265) including 21 trade or regional centers.

9. Judicial Adjudication

In 2004, courts of Zhejiang province accepted 806 first trials related to IPR, 37.5% up over the previous year, about 10% of which were related to foreign IPR. These trials were divided into 404 cases of patent dispute, 145 cases of copyright, 121 cases of trademark, 40 cases of technical contract and 88 cases of unfair competition. The courts 762 first trials with object amount of 190.874,500 RMB, including 224 cases of adjudication, 102 cases of conciliation, 404 nol-pros, 10 overrule and 22 others, of which conciliation and nol-pros made up 66.4%. The provincial supreme court accepted 91 second trials related to IPR, 38% up over the previous year, adjudicated 86 cases with object amount of 34,896,400 RMB, including 37 cases of adjudication, 38 cases of conciliation and 11 nol-pros, of which conciliation and nol-pros made up 57%. The case of violating IC layout design right sued by American Analog Incorporation against Hangzhou Shilan Microelectronics Co. Ltd. accepted by Hangzhou intermediate court was the first case involving IC layout design in China. The courts of all levels of Zhejiang Province accepted 72 crime cases involving 120 persons, 25.8% and 25% down from last year respectively. These cases were divided into 64 crimes of violating trademark involving 106 persons and 8 crimes of violating trade secret involving 14 persons. 96 persons were sentenced to bear criminal responsibility. The courts of all levels of Zhejiang Province accepted 2 patent cases (one sustained and the other nol-pros) and 1 trademark case (nol-pros).

In recent years, all courts of Zhejiang Province have paid high attention to the adjudgement of IPR, strengthened judicial protection of IPR, adjudicated de jure a lot of cases of considerable social influence and fully played functional role of protecting IPR. The provincial Supreme Court also proclaimed top ten IPR cases in Zhejiang Province such as the trademark dispute sued by China Tongrentang (Group) Co. Ltd. Against Wenzhou Yetongrentang Medicine Chain Co. Ltd.

2005-04-21