MEMORANDUM
OF UNDERSTANDING BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF
CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA ON THE
PROTECTION OF INTELLECTUAL PROPERTY
In the
spirit of cooperation embodied in their bilateral Agreement on Trade
Relations and consistent with the principles of the relevant
international agreements, the Government of the People's Republic of
China (Chinese Government) and the Government of the United States of
America (U.S. Government) have reached a mutual understanding on the
following provisions:
Article
1
1. The
Chinese Government will provide the following levels of protection under
the Patent Law of the People's Republic of China:
(a)
Patentable Subject Matter
Patents
shall be available for all chemical inventions, including
pharmaceuticals and agricultural chemicals, whether products or
processes.
(b) Rights
Conferred
A patent
shall confer the right to prevent others not having the patent owner's
consent from making, using, or selling the subject matter of the patent.
In the case of a patented process, the patent shall confer the right to
prevent others not having the patent owner's consent from using that
process and from using, selling, or importing the product obtained
directly by that process.
(c) Term
of Protection
The term
of protection for a patent of invention will be 20 years from the date
of filing of the patent application.
(d)
Compulsory Licenses
(i)
Patent rights shall be enjoyable without discrimination as to the place
of invention, the field of technology and whether products are imported
or locally produced.
(ii)
Where China's law allows for use of the subject matter of a patent
without the authorization of the right holder, including use by the
government or third parties authorized by the government, the following
provisions shall be respected:
(1)
authorization of such use shall be considered on its individual merits;
(2) such
use may only be permitted if, prior to such use, the proposed user has
made efforts to obtain authorization from the right holder on reasonable
commercial terms and conditions and that such efforts have not been
successful within a reasonable period of time. This requirement may be
waived by the government in the case of a national emergency or other
circumstances of extreme urgency or in cases of public non-commercial
use. In situations of national emergency or other circumstances of
extreme urgency, the right holder shall, nevertheless, be notified as
soon as reasonably practicable. In the case of public non-commercial
use, where the government or contractor, without making a patent search,
knows or has demonstrable grounds to know that a valid patent is or will
be used by or for the government, the right holder shall be informed
promptly;
(3) the
scope and duration of such use shall be limited to the purpose for which
it was authorized;
(4) such
use shall be non-exclusive;
(5) such
use shall be non-assignable, except with that part of the enterprise or
goodwill which enjoys such use;
(6) any
such use shall be authorized predominantly for the supply of China's
domestic market;
(7)
authorization for such use shall be liable, subject to adequate
protection of the legitimate interests of the persons so authorized, to
be terminated if and when the circumstances which led to it cease to
exist and are unlikely to recur. The competent authority shall have the
authority to review, upon motivated request, the continued existence of
these circumstances;
(8) the
right holder shall be paid adequate remuneration in the circumstances of
each case, taking into account the economic value of the authorization;
(9) the
legal validity of any decision relating to the authorization of such use
shall be subject to judicial review or other independent review by a
distinct higher authority;
(10) any
decision relating to the remuneration provided in respect of such use
shall be subject to judicial review or other independent review by a
distinct higher authority;
(11) the
conditions set forth in sub-paragraphs (2) and (6) above are not
required to be applied where such use is permitted to remedy a practice
determined after judicial or administrative process to be
anti-competitive. The need to correct anti-competitive practices may be
taken into account in determining the amount of remuneration in such
cases. Competent authorities shall have the authority to refuse
termination of authorization if and when the conditions which led to
such authorization are likely to recur;
(12)
where such use is authorized to permit the exploitation of a patent ("the
second patent") which cannot be exploited without infringing
another patent ("the first patent") , the following additional
conditions shall apply:
(A) the
invention claimed in the second patent shall involve an important
technical advance of considerable economic significance in relation to
the invention claimed in the first patent;
(B) the
owner of the first patent shall be entitled to a cross-license on
reasonable terms to use the invention claimed in the second patent; and
(C) the
use authorized in respect of the first patent shall be non-assignable
except with the assignment of the second patent.
2. The
Chinese Government will submit a bill to provide the levels of
protection specified in subparagraph 1 of this Article to its
legislative body and will exert its best efforts to have enacted and to
implement the amended patent law by January 1, 1993.
3. Both
Governments reaffirm their commitments to each other under the Paris
Convention for the Protection of Industrial Property (Stockholm 1967)
and their continued commitment to observe the principle of national
treatment with respect to providing patent protection for the natural
and legal persons of the other Party.
4. If the
U.S. Government becomes a party to an international convention that
requires the United States to provide a patent term of at least 20 years
from the date of filing of the patent application, the United States
will amend its laws to satisfy this obligation.
Article
2
Both
Governments reaffirm that the principle of territoriality and
independence of patents with regard to protection of patents as provided
in the Paris Convention for the Protection of Industrial Property should
be respected.
The
Chinese Government agrees to provide administrative protection to U.S.
pharmaceutical and agricultural chemical product inventions which:
(i) were
not subject to protection by exclusive rights prior to the amendment of
current Chinese laws;
(ii) are
subject to an exclusive right to prohibit others from making, using or
selling it in the United States which was granted after January 1, 1986
and before January 1, 1993;
(iii)
have not been marketed in China.
The owner
of the exclusive right in the United States regarding such a product
invention that meets the above requirements shall provide the competent
Chinese authorities with an application for administrative protection
including the following documents:
(1) a
copy of the certificate issued by the competent authorities of the
United States granting such exclusive right;
(2) a
copy of the document issued by the competent authorities of the United
States for the approval for manufacturing or sale of such product; and
(3) a
copy of a contract for the manufacture and/or sale entered into between
the owner of the exclusive right and a Chinese legal person (including
foreign capital enterprises, joint venture enterprises, or cooperative
enterprises) with respect to the manufacture and/or sale of the product
in China.
The
competent Chinese authorities will, in accordance with published Chinese
laws and regulations relating to obtaining manufacturing or marketing
approval, examine such application. No special rules or additional
requirements for approval will be imposed. After examination and
approval, which shall occur promptly, a certificate for administrative
protection, which will provide the right to manufacture or sell the
subject product, will be issued to the person seeking such protection.
The competent Chinese authorities will prohibit persons who have not
obtained a certificate for administrative protection from manufacturing
or selling the subject product during the term of administrative
protection. The term of administrative protection begins from the date
on which the certificate for administrative protection of the product is
obtained and remains in force for seven years and six months. The above
administrative protection will become available on January 1, 1993.
Article
3
1. The
Chinese Government will accede to the Berne Convention for the
Protection of Literary and Artistic Works (Berne Convention) (Paris
1971). The Chinese Government will submit a bill authorizing accession
to the Berne Convention to its legislative body by April 1, 1992 and
will use its best efforts to have the bill enacted by June 30, 1992.
Upon enactment of the authorizing bill, the Chinese Government's
instrument of accession to the Berne Convention will be submitted to the
World Intellectual Property Organization with accession to be effective
by October 15, 1992.
2. The
Chinese Government will accede to the Convention for the Protection of
Producers of Phonograms Against Unauthorized Duplication of Their
Phonograms (Geneva Convention) and submit a bill to its legislative body
authorizing accession by June 30, 1992. The Chinese Government will use
its best efforts to have the bill enacted by February 1, 1993. The
Chinese Government will deposit its instrument of ratification and the
Convention will come into effect by June 1, 1993.
3. Upon
China's accession to the Berne Convention and the Geneva Convention,
these Conventions will be international treaties within the meaning of
Article 142 of the General Principles of the Civil Code of the People's
Republic of China. In accordance with the provisions of that Article,
where there is an inconsistency between the provisions of the Berne
Convention and the Geneva Convention on the one hand, and Chinese
domestic law and regulations on the other hand, the international
Conventions will prevail subject to the provisions to which China has
declared a reservation, which is permitted by those Conventions.
4. In so
far as China's copyright law and its implementing regulations are
inconsistent with the Berne Convention, the Geneva Convention or this
Memorandum of Understanding (MOU), the Chinese Government will issue new
regulations to comply with these Conventions and the MOU by October 1,
1992. These new regulations will also clarify the existing regulations
and in particular will explain that the exclusive right of distribution
that applies to all works and sound recordings includes making copies
available by rental and that this exclusive right survives the first
sale of copies. Regulations implementing the Conventions and this MOU
will prevail over regulations for domestic works where there is an
inconsistency between the new regulations and existing regulations.
In
addition to applying to works created by nationals of Berne Union
members, these new regulations will apply to all works created in the
context of a contractual relationship, joint venture, or commission from
foreign capital enterprises, foreign joint venture enterprises, or
cooperative enterprises in which such nationals, individually or jointly
with others, are intended to be owners of copyright in the resulting
works.
The
Chinese Government will submit a bill to amend its copyright law to its
legislative body and use its best efforts to have enacted and to
implement this legislation within a reasonable period of time.
5. Both
Governments will indicate the status of the Berne Convention and the
Geneva Convention in their respective laws and notify judicial and
administrative bodies responsible for the enforcement of the copyright
law and regulations of the provisions of the Conventions within 30 days
after signature of this MOU or 30 days after accession to each
Convention, which ever is later.
Both
Governments will publish and provide to each other copies of any
guidance provided to administrative or judicial bodies regarding the
administration or interpretation of any laws and regulations related to
the implementation of the Conventions or this MOU no later than 30 days
after such guidance is issued.
6. No
later than the effective date of China's accession to the Berne
Convention, the Chinese Government agrees to recognize and protect
computer programs as literary works under the Berne Convention, and
consistent with the protection provided under that Convention shall
impose no formalities on the protection of computer programs and provide
a term of 50 years.
7. After
China's accession to the Berne Convention, all works originating in a
member of the Berne Union that are not in the public domain in their
country of origin will be protected in China.
(i) With
regard to any uses of an original or a copy of a U.S. work on a
commercial scale undertaken before establishment of bilateral copyright
relations between China and the United States, there will be no
liability.
(ii) With
regard to such uses undertaken after establishment of bilateral
copyright relations, the provisions of the law and regulations will
fully apply. With regards to a natural or legal person who owned and
used a particular copy of a work for a particular purpose prior to
establishment of bilateral copyright relations between China and the
United States, that person may continue to make such use of that copy of
the work without liability, provided that such copy is neither
reproduced nor used in any manner that unreasonably prejudices the
legitimate interests of the copyright owner of that work.
8. The
principles of paragraph 7 above, including the limitations on liability,
shall. apply to sound recordings.
9. The
Chinese Government will recognize this MOU as an agreement under Article
2 of the Copyright Law of the People's Republic of China which shall
provide a basis for protection of works, including computer programs,
and sound recordings of U.S. nationals published outside of China until
such time as China accedes to the Berne Convention and the Geneva
Convention. Such protection shall become effective 60 days after
signature of this MOU.
Based on
the commitments set forth in this MOU, the U.S. Government will take the
necessary steps to secure to Chinese nationals and their works
eligibility for protection under the copyright law of the United States
which shall become effective no later than 60 days after signature of
this MOU.
Article
4
1. For the
purpose of ensuring effective protection against unfair competition as
provided for in Article 10 bis of the Paris Convention for the
Protection of Industrial Property, the Chinese Government will prevent
trade secrets from being disclosed to, acquired by, or used by others
without the consent of the trade secret owner in a manner contrary to
honest commercial practices including the acquisition, use or disclosure
of trade secrets by third parties who knew, or had reasonable grounds to
know, that such practices were involved in their acquisition of such
information.
2. The
term of protection for trade secrets shall continue so long as the
conditions for protection are met.
3. The
competent authorities of the Chinese Government will submit the bill
necessary to provide the levels of protection specified in this Article
to its legislative body by July 1, 1993 and will exert its best efforts
to enact and implement this bill before January 1, 1994.
Article
5
Both
Governments will provide effective procedures and remedies to prevent or
stop, internally and at their borders, infringement of intellectual
property rights and to deter further infringement. In applying these
procedures and remedies, both Government's will provide safeguards
against abuse and shall avoid creating obstacles to legitimate trade.
Article
6
Both
Governments agree, at the request of either Party, to consult promptly
on matters relating to the protection and enforcement of intellectual
property rights, in particular with respect to the obligations of this
MOU. Both Governments agree that the first consultations pursuant to
this MOU will include discussions on the new implementing regulations
for the Berne Convention and this MOU and that these discussions will be
taken into consideration in the drafting of the regulations.
Article
7
In
recognition of the progress in improving the protection of intellectual
property rights that the Chinese Government has made and of further
progress that will result from the steps that the Chinese Government has
agreed to take, and in the expectation that these commitments will be
fully implemented, the U.S. Government will terminate the investigation
initiated pursuant to the "special 301" provisions of U.S.
trade law and China's designation as a priority foreign country will be
revoked effective on the date of signature of this MOU.
Signed in
Washington, D.C., this seventeenth day of January, one thousand nine
hundred and ninety-two, in two copies in the Chinese and English
languages, both texts being equally authentic.
For the Government of The
United States of America:
[signed
Carla Hills]
For the
Government of The People's Republic of China:
[signed Wu
Yi]
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