People's Republic Of China Intellectual Property Rights Memorandum Of Understanding--1995 Action Plan
PRIVATE Ministry of Foreign
Trade and Economic Cooperation Minister Wu Yi
February
26, 1995
Dear
Minister Wu Yi:
I have the
honor to acknowledge receipt of your letter of this date, including its
annex, which reads as follows:
Dear
Ambassador Kantor:
I have the
honor to refer to the consultations between representatives of the
Government of the People's Republic of China (China) and the Government
of the United States of America (United States) which were conducted in
the spirit of the 1992 Memorandum of Understanding between our
governments concerning the protection of intellectual property rights.
Both of our governments are committed to providing adequate and
effective protection and enforcement of intellectual property rights and
have agreed to provide this to each other's nationals.
China's
actions in this respect show considerable progress and determination to
achieve effective enforcement of intellectual property rights through
judicial and administrative procedures. China has created specialized
intellectual property courts to hear these cases and I can confirm that
the Civil and Criminal Procedure Laws of the People's Republic of China
empower the courts to address infringement of intellectual property
rights through measures to stop infringement, preserve property before
and during litigation, and to order the infringer to provide
compensation to right owners for infringement of their intellectual
property rights. In addition, the courts also act to preserve evidence
to permit effective litigation.
China's
Supreme People's Court has issued a circular instructing courts at
various levels to address intellectual property cases expeditiously,
including cases involving foreign right holders. In respect of taking
criminal action against infringers, our procuratorates are actively
pursuing criminal infringement cases.
I have
attached to this letter a State Council Intellectual Property
Enforcement Action Plan (Annex I) that will be carried out immediately.
This Action Plan strengthens the enforcement efforts that China has
already taken and establishes a long term enforcement structure so that
the peoples government in the provinces, directly administered
municipalities, autonomous regions and cities meet the requirements of
that Plan and China will actively implement it. Under Chinese law, each
administrative authority mentioned in the Action Plan is fully empowered
to take the specified steps to effectively enforce intellectual property
rights.
Chinese
authorities have recently taken effective actions to enforce
intellectual property rights. Recently seven plants producing infringing
products have been closed, business licenses revoked, and more than two
million infringing CDs, LDs and copies of computer software have been
seized and destroyed. Under the Chinese government's action plan, this
effort will intensify and by July 1, 1995, investigation of all
production lines suspected of producing infringing CDs, LDs and CD-ROMs
will be completed. Factories that have engaged in infringing activities
will be punished through seizure and forfeiture of infringing product
and all infringing copies will be destroyed and the materials and
implements directly and predominantly used to make the infringing
product will be seized, forfeited and defrayed. Business licenses and
permits will also continue to be revoked in appropriate cases.
Exports of
infringing products have been banned. The establishment of a copyright
verification system and the use of unique identifiers on CDs, CD-ROMS,
and LDs will provide a vital tool to prevent the production of
infringing goods and export of those goods. Permits to engage in
activities related to audio-visual products will not be issued without
copyright verification and imprint of the unique identifier. More than
one violation of this condition will result in revocation of the permit
and repeat serious offenders will have their business licenses revoked.
Retail
establishments will be inspected under the Action Plan and enterprises
will keep records of inventories and other information to strengthen
enforcement. Recent raids on computer software enterprises are an
example of China's effective enforcement of intellectual property
rights.
Another
aspect of China's decision to develop its economy and open its markets
further is increased cooperation and trade in products protected by
intellectual property rights. China has recently approved the
establishment of a representative office for the International
Federation of Phonogram Industries (IFPI) and will examine and approve,
when published requirements are met, the pending application of the
relevant entity for the verification of motion picture copyright, as
well as other entities involved in copyright verification. Obtaining
this approval does not prejudice the ability of these offices to engage
in other activities in accord with Chinese laws and regulations.
China
confirms that it will not impose quotas, import license requirements, or
other restrictions on the importation of audiovisual and published
products, whether formal or informal. China will permit U.S. individuals
and entities to establish joint ventures with Chinese entities in China
in the audiovisual sector for production and reproduction. These joint
ventures will be permitted to enter into contracts with Chinese
publishing enterprises to, on a nationwide basis, distribute, sell,
display and perform in China. China will immediately permit such joint
ventures to be established in Shanghai, Guangzhou, and moreover, other
major cities, and will then expand the number of these cities, in an
orderly fashion, to thirteen (13) by the year 2000. U.S. individuals and
entities will be permitted to enter into exclusive licensing
arrangements with Chinese publishing houses to exploit the entire
catalogue of the licensor and to decide what to release from that
catalogue. China will also permit U.S. individuals and entities to
establish joint ventures in the computer software sector and these joint
ventures will be permitted to produce, and sell computer software and
computer software products in China.
China will
continue to permit U.S. individuals and entities to enter into revenue
sharing arrangements with Chinese entities. Permissible arrangements
will include, for example, licensing agreements under which the U.S.
entity receives a negotiated percentage of revenues generated by film
products.
China will
adopt or enforce measures necessary to protect public morals or to
maintain public order, as long as such measures are applied consistently
and in a non-discriminatory, non-arbitrary manner and do not operate as
a disguised restriction on trade. By October 1, 1995, China will publish
all laws, rules, regulations, administrative guidance, or other official
documents concerning any limitation on, regulation of or permission
required to engage in all activities identified above. The audiovisual
departments under the State Council will intensify their efforts to
formulate the regulatory rules on audio-visual products which will
clarify the specific censorship regulations for publication and
importation of audio-visual products. For audio-visual products that
meet the provisions of the censorship requirements, their publication
and import will be approved without any restrictions in terms of
quantity. The censorship regulations will be open, transparent and
published. Determinations as to censorship requirements will normally be
made within ten days, but in no event longer than sixty days from
receipt of an application.
In light
China's policies of market opening, representatives of U.S. enterprises
are invited to begin discussions on their establishment in China,
including possible licensing arrangements, as soon as possible.
It is my
understanding that the United States will provide assistance to China
with respect to the protection and enforcement of intellectual property
rights. This work will be implemented mainly through the U.S. Customs
Service, U.S. Department of Justice and the United States Patent and
Trademark Office.
The U.S.
Customs Service is prepared to provide cooperative and reciprocal
assistance to China on providing improved enforcement of intellectual
property rights. This assistance and coordination effort could include:
(1) providing training, in China, by U.S. Customs personnel, of Chinese
customs officers with responsibility for enforcing intellectual property
rights, and (2) providing mutually agreed relevant technical equipment
to assist in the enforcement of intellectual property rights. Training
will likely include: how to identify infringing merchandise through
physical examination, verification of documents, and laboratory testing,
and assistance in building a centralized system of intellectual property
rights recordations. The U.S. Patent and Trademark Office will also
assist in training Chinese personnel, including through providing
training and documents for the people who work on verification of
well-known marks and mechanisms for establishing an administrative
appeals process.
China and
the United States will exchange information and statistics on a
quarterly basis beginning on June 1, 1995, on intellectual property
enforcement activities in their two countries. Beginning on January 1,
1996, this exchange will be carried out on a semi-annual basis for the
next two years, and on a schedule to be agreed thereafter.
Under
these exchanges, China will provide information and statistics
concerning enforcement, throughout the country, of intellectual property
rights of U.S. nationals and joint ventures with U.S. nationals, by type
of intellectual property, establishments raided, and the value and
disposition of infringing products and machinery and implements.
Information and statistics on prosecutions and administrative and court
decisions will also be provided.
Under
these exchanges, the United States will provide to China, on the same
schedule, information and statistics concerning the customs seizure
value of infringing goods by commodity, the seizure value of infringing
goods by type of intellectual property right, ,the seizure value of
Chinese infringing goods by commodity, and the seizure quantities of
infringing goods by commodity. The United States will also provide
statistics on federal intellectual property enforcement activities,
including information on prosecutions for copyright infringement and
trademark counterfeiting and court decisions in intellectual property
cases. The United States will also provide information and statistics on
Chinese products that are infringed in the United states.
China and
the United States will, upon request, consult and exchange information
on the license verification system set out in the Action Plan and
particular applications of that system. China and the United States
require that public entities in both countries shall not use
unauthorized copies of computer software in their computer systems and
legitimate software will be used. They likewise require that adequate
resources shall be provided to permit the acquisition only of authorized
computer software.
In
addition, China and the United States will consult promptly at the
request of either government with respect to any matter affecting the
operation or the implementation of the provisions of this letter,
including its annex. In addition, both governments agree to consult,
during the first year on a quarterly basis, semiannually for the
following two years and then on a schedule to be agreed, on the
implementation of the Action Plan and its effectiveness.
On the
basis of the foregoing, the United States will immediately revoke
China's designation as a "special 301" priority foreign
country, and will terminate the section 301 investigation of China's
enforcement of intellectual property rights and market access for
persons who rely on intellectual property protection and rescind the
order issued by the U.S. Trade Representative on February 4, 1995,
imposing increased tariffs on Chinese exports.
Please
confirm that this letter, including its annex, and your letter in reply
constitute an Understanding between our two Governments.
With
assurances of my highest consideration.
Wu Yi
Minister of Foreign Trade
and Economic Cooperation
I have the
honor to confirm that your letter, including this annex, and this letter
constitute an Understanding between our two governments.
With my
highest regard,
Michael
Kantor
United States Trade
Representative
ANNEX I
ACTION
PLAN FOR EFFECTIVE PROTECTION AND ENFORCEMENT OF INTELLECTUAL PROPERTY
RIGHTS
Since
infringement of intellectual property rights, including copyright
piracy, patent infringement, trademark counterfeiting, and unfair
competition, is prohibited in China, the State Council's Working
Conference on Intellectual Property has developed this Action Plan to
effectively crack down an infringement of intellectual property rights
in China. The People's Governments of provinces, directly administered
municipalities, autonomous regions and cities, as well as government
ministries and departments are to participate in the substantial
reduction of intellectual property rights infringement through effective
implementation of this Action Plan.
This
Action Plan sets forth both immediate and longer-term projects for the
effective enforcement of intellectual property rights through the
exercise of existing and expanded authority. The key short-term projects
of this Action Plan include the institution of a special enforcement
period. During this period, intensive action will be taken to
investigate and punish infringement of intellectual property rights,
targeting efforts on areas with a high level of infringement and actions
against the manufacture, reproduction, and distribution of infringing
products.
Long-term
(3-5 years), sustained enforcement will be carried out by the State
Council's Working enforce on Intellectual Property Rights, other working
conferences on intellectual property, enforcement task forces and ad hoc
groups, which will coordinate and work together to provide effective
enforcement of intellectual property rights and punishment of
infringement within each province, directly administered municipality,
autonomous region and city, and among them. Administrations, including
the Chinese Customs, State Council Departments, police and other
relevant agencies will also participate in providing effective
enforcement of intellectual property rights.
I .
Intellectual Property Rights Enforcement Structure
A. State
Council Working Conference on Intellectual Property Rights And
Sub-Central Working Conference
1. The
State Council has established a Working Conference on Intellectual
Property Rights which through forceful measures centrally organizes and
coordinates protection and enforcement of all intellectual property
rights throughout the country, and will ensure that effective protection
is provided and infringement of intellectual property rights is
substantially reduced. For the purposes of this Plan, intellectual
property rights include copyright and related rights, trademarks,
patents, protection against unfair competition, including protection of
undisclosed information, and other relevant subject matter.
2. The
State Council's Working Conference on Intellectual Property Rights is
comprised of the State Council's departments in charge of science,
technology, foreign trade and economic cooperation, foreign affairs,
press and publication, culture, broadcast, film, television, justice,
public security, patent, copyright, industrial and commercial
administration, and customs, as well as the departments in charge of the
relevant industries.
3. The
main duties that the State Council's Working Conference on Intellectual
Property Rights will carry out are:
-- To
coordinate, study and decide on the major policies and measures for the
effective protection and enforcement of intellectual property rights,
and to coordinate and organize enforcement activities among provinces,
directly administered municipalities, autonomous regions and cities, as
well as government ministries and departments (hereinafter referred to
as regions and departments) to achieve uniform and effective protection
and enforcement of intellectual property rights;
-- To
monitor the implementation of the laws and regulations on intellectual
property rights, to organize and instruct the relevant authorities
within regions and departments to investigate and substantially reduce
infringement of intellectual property rights;
-- To
instruct and organize the relevant authorities within regions and
departments to provide education on and publicity for the laws regarding
intellectual property rights, to foster the understanding of
intellectual property rights protection among people throughout the
country, and to improve intellectual property law enforcement skills of
leading officials at various levels of government, as well as the skills
of enforcement personnel.
-- To
instruct that administrative, civil and criminal processes and sanctions
arc applied consistently and uniformly to all Chinese and foreign
persons and all public, private, and not for-profit entities, that
engage in infringing conduct.
4. The
State Council Working Conference will direct and coordinate the work of
intellectual property working conferences which the People's Governments
of at least 22 provinces, directly administered municipalities and
autonomous regions, and major cities including Guangdong, Beijing,
Shanghai, Tianjin, Wuhan, Nanjing, Shenzhen, Jiangsu, Zhejiang, and
Fujian, will organize to carry out activities within their jurisdiction
at the direction of the State Council Working Conference so that
effective enforcement is achieved throughout the country.
5. The
State Council Working Conference will issue directions to the
provincial, directly administered municipalities, autonomous regions and
city bodies coordinating and guiding intellectual property rights, to
formulate action plans and work programs in their own localities for
effective enforcement of the laws on intellectual property rights, as
well as plans on providing information and education on intellectual
property rights.
a. Each
plan or work program shall provide for effective law enforcement,
eliminate interference by local protectionism, and ensure complete dnd
effective implementation and enforcement of the laws and regulations on
intellectual property rights in the respective locality. The State
Council Working Conference will receive these action plans and work
programs and, within three months after issuance of this Action Plan,
will inform the relevant Conference of any problems with that
Conference's action plan or work program and issue directions to address
the problems at that time.
b. In the
immediate future the focus will be on selected key regions and problems
where serious efforts shall be made to investigate and tackle major
cases, and criminals shall be punished.
c. The
provinces, regions and cities in which working conferences are
established shall issue follow-up reports each quarter for the first
year and semi-annually subsequently, beginning on June 1, 1995, on
implementation of the action plans and work programs, which will be
published as soon as they are issued.
d.
Included within each report will be the name of a contact person in the
working conference who will be responsible for coordination of all
intellectual property protection for that conference and who will be a
point of access for right holders.
6. The
State Council's Working Conference on Intellectual Property Rights has
established an Office within the State Science and Technology Commission
to prepare for and handle the day-to-day functions of the State
Council's Working Conference.
(a) The
Office of the State Council's Working Conference on Intellectual
Property Rights has established a system of liaison officers. The
liaison officers of various regions and departments will report to the
Office of the State Council's Working Conference an Intellectual
Property Rights regularly regarding actions taken to provide effective
protection and enforcement of intellectual property rights in their
regions and departments, and will relay and implement the instructions,
spirit, and work duties from the State Council's Working Conference on
Intellectual Property Rights to the various regions and departments.
(b)
Provincial, regional, municipal and city working conferences will
establish local offices to carry out day-to-day functions and organize
relevant local departments to implement China's intellectual property
laws and provide effective enforcement of those laws.
B
Enforcement Task Forces
1.
Administrative and other authorities responsible for intellectual
property protection and enforcement including the National Copyright
Administration (NCA), State Administration for Industry and Commerce
(AIC), the Patent Office, and police at the national, provincial,
autonomous region, and directly administered municipality and cities
(hereinafter "sub-central levels"), and customs officials will
coordinate their activities under the working conference system and
participate in enforcement task forces. Each participant in a task force
shall give assistance to ensure effective enforcement and is not allowed
to refuse to provide such assistance. The People's Governments at each
level shall give the necessary guarantees in terms of personnel, working
expenses, and conditions to implement this Action Plan to ensure that:
a. Each
enforcement task force has all necessary legal authority and will use
its resources to initiate and carry out investigations of any suspected
infringement of intellectual property rights. In the case of
investigations involving more than one sub-central jurisdiction, where
necessary, the relevant intellectual property rights working conference
will organize and coordinate the enforcement task forces to carry out
the investigation.
b. Each
enforcement task force's authority includes the authority, in situations
in which there is reason to believe or suspect that there has been an
infringement of an intellectual property right, to:
--enter
and search any premises;
-- review
books and records for evidence of infringement and damages; and
--seal
suspected goods and the materials and implements directly and
predominantly used to make them.
c. When
infringement is found, the enforcement task force has the authority to
impose fines, order an end to the production, reproduction and sale of
audio-visual products, revoke the permits for producing and reproducing
audio-visual products, and cause the forfeiture and destruction of
infringing goods and the materials and implements directly and
predominantly used to make them, without compensation of any sort.
2. The
enforcement task force has the authority to order infringement to stop
while infringement cases are being processed. The party seeking such
relief may be required to provide a security or equivalent assurance
sufficient to protect the alleged infringer and the competent
authorities and to prevent abuse. The amount of such security or
equivalent assurance shall not deter recourse to these procedures.
3. Cases
of infringements that are suspected to be of a (criminal nature shall be
passed over to the prosecutor as well as being subject to administrative
action- In each criminal case, the relevant authority will seek severe
penalties commensurate with the level of infringement, and impose such
penalties.
4. All
sub-central level intellectual property protection and enforcement
authorities participating in the enforcement task force will undertake
aggressive ex officio actions (actions on their own authority without
request from a right holder) against all types of infringement of
intellectual property rights and investigate all complaints from right
holders, their representatives or their exclusive licensees filed with
the relevant administrative agency.
5. Upon
its establishment, each enforcement task force shall specify a contact
person and publish a phone number which right holders and other
interested persons may use to exchange information with the Task force.
Each enforcement task force shall, on request, keep right holders fully
informed of the progress of the relevant investigations and, when
offered, shall rely an right holders for information and expertise to
assist the task forces enforcement efforts.
6.
Foreign and domestic right holders may submit petitions for
investigations and enforcement actions to an enforcement task force by
addressing them to the contact person at that task force. Once received,
petitions shall be forwarded to the administrative authority within the
task force in charge of the intellectual property at issue for
management of the case. Petitions shall be accepted according to
published, uniform criteria that are limited to determining whether
there is reason to believe that the petitioner is the right holder and
there is reason to believe or suspect that a right has been or may be
infringed. Within fifteen days of the receipt of the petition, the
petitioner must be notified that the petition has been accepted or, if
it is not accepted, notified in writing of the specific reasons for its
refusal. Requests for administrative enforcement actions and receipt of
administrative remedies will not affect the right to seek relief in a
judicial action.
7. Ad Hoc
Groups --In areas in which the situation is particularly serious,
enforcement task forces shall set up ad hoc groups to take immediate
action against infringement in specific fields, such as audio-visual
products (which includes CDs, LDs, audio cassette tapes, video tapes,
sound recordings, and motion pictures) (hereinafter referred to as "audio-visual
products"), computer software in any format or form, including
video games, diskette, network, hard drive, CD-ROM or other medium
(hereinafter referred to as "computer software") ,
publications, and trademarks. Each ad hoc group will be headed by the
departments in charge of their respective area of responsibility and
shall act with the assistance of other departments concerned. The ad hoc
groups shall have the same authorities as the enforcement task forces.
C. Special
Enforcement Period
1. The
working conferences and enforcement task forces will operate over the
long-term. In addition, beginning on March 1, 1995, the Special
Enforcement Period will be intensified for the next six months. During
this period, the number of investigations will be increased and other
actions taken to ensure the elimination of piracy, counterfeiting and
other infringements of intellectual property rights.
2. During
the Special Enforcement Period, the State Council's Working Conference
on Intellectual Property will direct and coordinate enforcement efforts
which all working conferences and enforcement task forces established
under this Action Plan will undertake. The State Council's Working
Conference on Intellectual Property will also coordinate with the
relevant departments in launching a nation-wide information and
education campaign on intellectual property rights.
3 .
Particular campaign will be placed on achieving effective enforcement in
key regions, cities and entities with a high level of infringing
activity with a focus on pursuing significant cases so as to eliminate
piracy and counterfeiting, deter future infringement, and require use of
legitimate products.
4 . During
the Special Enforcement Period:
--The
work of investigation and punishment of infringers, will focus on
regions and entities where infringing products are produced, the places
of distribution, and the points of sale.
--Efforts
will be primarily directed against piracy activities involving
audio-visual products, computer software, books and other publications,
sound recordings, counterfeiting and infringement of trademarks,
especially well-known trademark, patent infringement and unfair
competition.
--Each of
the CD, LD and CD-ROM factories now operating in China shall be
investigated during the Special Enforcement Period to determine whether
they have produced or are producing unauthorized CDs, LDs or computer
software in CD-ROM format. Factories subject to investigation will not
be provided prior notice of visits and inspections. Those factories
found not to have engaged in infringing conduct shall be re-registered
and monitored on a regular basis thereafter. Those that are found to be
engaging in infringing conduct shall be subject to administrative and/or
judicial penalties, commensurate with the level of infringement.
--In
respect of trademark infringement, the focus will be an prosecuting some
significant cases, imposing severe penalties and widely publicizing them
to demonstrate the dignity of the legal system and to deter further
infringements.
5. While
carrying out special raids, each enforcement task force is also to
intensify and conscientiously carry out regular, routine inspections,
and to make unremitting efforts to confirm that its operations are
effective, and that infringements of intellectual property rights in its
own area are substantially reduced and do not reoccur.
6. If
infringements of intellectual property rights in a specific area are not
substantially reduced by 31 August 1995, or if significant increases
occur at any time in the future, then the Special Enforcement Period in
that area will be extended or reinstated accordingly. If piracy is
substantially reduced in a particular area, then that area can terminate
the special enforcement effort before August 31, 1995.
D.
Enforcement Efforts In Specific Fields
1.
Audio-Visual Products and Computer Software
a.
Enforcement task forces will complete the investigation of production
lines suspected of producing infringing CDs, LDs, and CD-ROMs including
computer software by July 1, 1995. In addition, relevant units engaged
in reproduction, publication, import, export, wholesale, leasing,
operation, or public performance of these products will be investigated.
b.
Factories determined to have been engaged in infringing activities will
be punished through seizure and forfeiture of infringing product and
required to pay compensation adequate to compensate the loss which the
infringed party suffered as stipulated in Article 53 of the Copyright
Regulations, and will pay serious fines commensurate with the level of
infringement. In addition, those factories found to be engaging in
serious infringing production shall have their business licenses
revoked. All infringing copies and the materials and implements directly
and predominantly used to make them shall be seized, forfeited and
destroyed.
2. Other
Enforcement Efforts In Respect of Audio-Visual Products and Computer
Software
All
audio-visual administration departments and copyright administration
departments at the sub-central level will join with relevant departments
in charge of industry and commerce administration, and enforcement task
forces (where they exist) to complete a comprehensive investigation of
all CD, LD, CD-ROM production lines.
a.
Audio-Visual Products
Infringement of copyright for audio-visual products is strictly banned.
To that end, the following actions shall be taken:
i. The
operation of audio-visual product businesses without obtaining the
relevant permits and a business license will be prohibited.
ii.
Audio-visual administration and copyright administration departments
will begin comprehensive inspections and investigations of
establishments that publish, reproduce, wholesale, retail, rent out, or
perform audiovisual products within their respective jurisdictions. They
will examine and verify the types, quantities, product whereabouts and
matters relating to copyright for all-such products reproduced, sold,
rented, performed and/or otherwise dealt with by these establishments.
This work will be pursued on a continuous basis.
-- Repeat
offenders (those who have been found to infringe on more than one
occasion) will have their relevant audio-visual product permits revoked.
For serious repeat offenders, the AIC office will revoke that infringers
business licenses and will not grant another to such offender in the
same field of activity within three years. The full range of
administrative and judicial penalties will also apply, as appropriate.
iii. All
sub-central departments in charge of audiovisual product control,
together with enforcement task forces (where they exist) , will ensure
that each retailer maintains an accurate inventory of his or her
audio-visual products and updates it regularly. Departments are to
improve routine inspection of these establishments. They are to examine
carefully the origin of audio-visual products supplied to enterprises
and keep well-informed of the category, quantity, and outlet of
reproduced products.
-- Except
for those products published and distributed by regular audio-visual
units approved by the State and reproduced, produced or imported after
approval, all audio-visual products will be treated as illegal
publications and turned over and destroyed. In addition, other remedies
in the law shall apply as appropriate.
-- Retail
units dealing with audiovisual product must possess licenses to operate,
and unlicensed retail peddlers of these products will be strictly
banned. Operators shall receive their goods from distribution units
approved by publications administration departments, and must register
goods they receive. In cases in which the source of infringing products
is unclear, an investigation will be made, responsibility will be
determined, and those responsible will be strictly punished through
administrative and judicial means, commensurate with the level of
infringement.
iv. Prior
to July 1, 1995, a report an the investigation and punishments imposed
will be sent to the responsible departments, with a copy to the State
Council Intellectual Property Working Conference Office.
b.
Computer software
Infringement of copyrighted computer software is strictly banned under
the law and each individual and entity, including all public, private,
and not-for-profit entities, shall be treated equally under the law. To
ensure effective enforcement against piracy and infringement of
copyright in computer software, the following actions shall be taken:
i. The
State Council Intellectual Property Working Conference will organize and
coordinate the AIC, police, copyright administration, electronics
industry, other relevant
departments and the enforcement task forces (where they exist) to
conduct comprehensive inspections of establishments that commercially
reproduce, wholesale, retail, or rent out computer software within their
respective jurisdictions. This work will be pursued on a continuous
basis.
ii. All
sub-central departments in charge of computer software product control,
together with enforcement task forces (where they exist), will require
each retailer to maintain an accurate inventory of his or her computer
software, including information on the type, origin, quantity, and
product location of any software that it commercially reproduces,
distributes or rents, and update it regularly. Departments are to
improve routine inspection of these establishments and verify the
accuracy of the inventory. They are to verify the accuracy of the
information in the inventory.
-- Except
for those products distributed by entities with appropriate business
licenses and reproduced, produced or imported after approval, all
computer software will be treated as illegal publications and turned
over and destroyed. Retail units dealing with computer software must
possess licenses to operate, and unlicensed retail peddlers of these
products will be strictly banned. If a retail unit cannot establish that
it purchased computer software from an individual or entity with an
appropriate business license, the source of the product will be
investigated. Any individual or entity that reproduces or sells the
software of right holders from whom they have not been licensed, will be
punished through administrative and judicial means, commensurate with
the violation. Cases in which serious infringement has been punished
will be broadly publicized.
--For
serious repeat offenders, the AIC office will revoke the infringers'
business licenses and will not grant another to such offender in the
same field of activity within three years. The full range of
administrative and judicial penalties will also apply, commensurate with
the violation
iii. All
public, private, and not-for-profit entities using computer software,
shall provide resources sufficient to purchase legitimate software.
iv. Prior
to October 1, 1995, a report an the investigation and punishments
imposed will be sent to the responsible departments, with a copy to the
state Council Intellectual Property Working Conference Office.
3. Books,
Periodicals and Other Printed Works
a. With
respect to books and periodicals, supervision and monitoring of the
distribution of publications will be improved since piracy of
publications is absolutely banned. All localities are to carry out an
operation to consolidate all printing firms within their areas of
jurisdiction, take severe action against those enterprises that
illegally take orders to print pirated publications, and the business
licenses of those engaged in the printing of pirated printed matter are
to be revoked without mercy.
b.
Publishers and printing enterprises must check with the license issuing
agency to verify the printing license prior to undertaking the printing
of books or periodicals. Those who do not strictly complete the
formalities and print pirated books or periodicals will be punished
through administrative and judicial means. Grant of a publishing license
will be based on whether the applicant has obtained authorization or
permission from the right holder or that person's representative to
publish the relevant material. Printing houses that operate without
licenses will be shut down.
4.
Trademarks
a. Since
trademark counterfeiting and infringement is illegal, the working
conferences and enforcement task forces will investigate and punish
trademark infringement promptly and strictly. Cases involving suspected
criminal trademark infringement must be handed over to the prosecutors.
The relevant authorities will seek severe penalties, commensurate with
the level of infringement.
b. Any
trademark agent permitted to act an behalf of Chinese individuals and
entities will now also be permitted to act on behalf of foreign
individuals and entities. For the purposes of obtaining enforcement
actions by the AIC and Customs, wholly-owned subsidiaries of foreign
companies, joint ventures involving foreigners in China, and any
licensee in China will be permitted to act on behalf of the foreign
owner of the mark.
E.
Enforcement Directly Through Administrative Agencies and Departments
1. The
Administrations and Departments listed below shall have the respective
authorities as specified and will exercise those authorities to
eliminate infringement of intellectual property rights:
a. The
National Copyright Administration (NCA) and local copyright
administrative agencies are in charge of and responsible for
administration and maintenance of all copyright protection for computer
software, audio-visual products, books and other publications, and all
other works. NCA and local copyright administrative agencies shall
direct and be in charge of enforcement efforts as part of enforcement
task forces and each task force will investigate and punish copyright
infringement.
b. The
Trademark Office of the SAIC is in charge of trademark registration and
trademark administration throughout the country. If there is reason to
believe that a trademark contract is inconsistent with the law, the
Trademark Office will review the contract to determine if it is valid.
The AIC Trademark Office also punishes trademark infringement and
trademark counterfeiting and handles the appeal of trademark
infringement cases and identifying and determining whether trademarks
are well-known.
AIC is
the primary administrative law enforcement department responsible for
investigating and punishing unfair competition. It is responsible for
supervising and examining transactions of operators in the market,
preventing unfair competition, and investigating and punishing illegal
activities that infringe on trade secrets.
c. The
Chinese Patent Office is an administrative authority for the enforcement
of patent law and is the functional authority in charge of patent work
under the State Council. The administrative authorities for patent
affairs established by relevant departments under the State Council or
the local People's Governments are responsible for directing and
coordinating patent work in localities and departments, for mediating
and handling patent disputes, as well as investigating and punishing
passing-off of patents within its jurisdiction.
2. All
copyright, patent and trademark authorities at the provincial, regional
and local levels will report directly to, and follow the guidelines of,
the NCA, AIC and the Patent Office at the central level. All such
authorities shall devote time and resources to secure effective
communication between themselves at the inter-regional level and with
the central level and to ensure the effectiveness and coordination of
their operations.
3 .
Administrative authorities, including NCA, AIC and the administrative
authorities for patent affairs, responsible for determining and
punishing infringement shall:
--wherever there is reason to believe or suspect an infringement of an
intellectual property right, order the infringement to stop immediately,
and where infringement is found, upon the request of the right holder,
require the infringer to compensate for the loss which the infringed
party suffered (as stipulated in Article 53 of the Copyright
Regulations, and Article 39 of the Trademark Law and Rule 43 of the
Trademark Regulations and Article 60 of the Patent Law), and impose
serious fines on the infringer commensurate with the level of
infringement;
-- in any
case that involves suspected criminal conduct refer the case to the
prosecutors; and
-- with
respect to repeat offenders, i.e., those who have been found to infringe
intellectual property rights in a serious manner on more than one
occasion, the relevant AIC office will revoke their business licenses
and will not grant another to such offender in the same field of
activity within three years.
4. In the
process of enforcing the intellectual property laws, all administrative
and judicial bodies with responsibility in this area are to accept
information about infringements given by the holders of intellectual
property rights (including foreign owners of intellectual property
rights), or by other interested persons, and are to conduct
investigations into the reported cases promptly.
5.
Foreign and domestic right holders will be permitted to submit petitions
to initiate investigations and enforcement action to the national or
local administrative agency in charge of the intellectual property right
at issue. Petitions shall be accepted according to published, uniform
criteria that are limited to determining whether there is a reason to
believe that the petitioner is the right holder or that person's
authorized representative and there is a reason to believe or suspect
that a right has been or may be infringed. Information on procedures for
filing such petitions shall also be published and made available to
right holders. within fifteen days of the receipt of the petition, the
petitioner must be notified that complaint has been accepted or, if it
is not accepted, notified in writing of the specific reasons for its
refusal. Requests for administrative enforcement actions and receipt of
administrative remedies does not affect the right to seek relief in a
judicial action.
6.
Foreign right holders or their representatives will be permitted to
collect information by legal means concerning infringement of their
rights. Foreign entities will be permitted to collect by legal means any
information relevant to the issue of infringement. Such information will
be admissible as evidence when administrative agencies initiate
investigations and handle cases and this evidence will be treated as
equal to evidence collected and provided by Chinese nationals.
F.
Additional Administrative Actions
1. All
sub-central level administrative departments in China must institute an
Intellectual Property Rights protection and enforcement system with
individuals and enterprises that manufacture or sell books, computer
software, except for CD-ROMS, or are engaged in trademark printing or
publishing to determine if violations have occurred.
-- Since
individuals and enterprises that manufacture, sell or print or publish
these products are subject to special permits and annual business
operating license checks, administrative departments shall register only
those entities that have observed the law. Repeat offenders (those who
have been found to infringe on more than one occasion) will have their
relevant audio-visual product permits revoked. For serious repeat
offenders, the AIC office will revoke the infringers, business licenses
and will nor grant another to such offender in the same field of
activity within three years. The full range of administrative and
judicial penalties will also apply, commensurate with the violation.
2. All
sub-central level administrative departments must combine stringent
enforcement with information and education; run training classes; and
require the manufacturers and sellers of audio-visual products. computer
software products, books, and engage in trademark printing or publishing
to study, in-depth, intellectual property laws, regulations, and
relevant documents. Examinations shall be held to check their study.
Those who pass will be issued an intellectual property rights training
certificate and will operate on the strength of the certificate.
Those who
fail to obtain an intellectual property rights training certificate will
be refused the registration of their special permits and annual business
operating licenses when the annual inspection is due until such time as
they obtain a training certificate.
3. In
intellectual property right infringement investigations, all sub-central
level administrative departments will institute a system for persons to
provide information and assistance in intellectual property right
infringement cases.
4. All
sub-central level administrative departments shall institute a
monitoring system for serious and significant intellectual property
infringement cases, and in cooperation with the intellectual property
working conferences coordinate cross-region and cross-province
investigations and enforcement efforts. They shall crack down promptly
and effectively on copyright pirating, trademark counterfeiting, and
other intellectual property rights infringements so as to eliminate
infringement.
5. While
properly carrying out special law enforcement inspection operations, all
sub-central administrations and all departments are to further improve
and perfect all routine supervisory and administrative systems, develop
standardized administrative procedures, improve administrative quality,
perform their duties and conscientiously protect the legitimate rights
and interests of intellectual property rights owners.
G. Customs
Enforcement
1. All
customs offices will further intensify the protection of intellectual
property rights of all imports and exports and they will be subject to
customs enforcement.
Beginning
on March 1, 1995, and lasting until October 1, 1995, Customs will
intensify the protection at the border for imports and exports of CDs,
LDs, CD-ROMs and trademarked goods. Customs will, therefore, detain
suspected infringing products. Once the goods are determined to be
infringing, they will be seized, forfeited and destroyed or excluded
from the stream of commerce according to the principles set forth below.
Those, responsible for the infringement will be strictly punished
through administrative and/or judicial means.
2. New
customs regulations will be published by July 1, 1995 and enter into
force by October 1, 1995. These new regulations will clarify that
infringing goods that are imported or exported are illegal. In order to
protect intellectual property rights, customs will exercise all of the
authorities stipulated by China's Customs Law. In particular:
-- Goods
that infringe intellectual property rights under Chinese laws and
regulations are prohibited from being imported into or exported from
China.
-- The copyright or
trademark owner or his authorized representative may apply to customs
for the enforcement of his intellectual property right with respect to
imports and exports.
-- In the
area of copyrights, Customs will enforce copyrights against infringing
imports and exports in all cases in which the applicant for enforcement
presents legal proof of copyright, which in the case of a national of a
member of the Berne Convention for the Protection of Literary and
Artistic Works, would be satisfied by a copyright registration
certificate of that member country.
-- In the
area of trademarks, Customs enforces trademarks against infringing
imports and exports in all cases in which the applicant for enforcement
presents a "Trademark Registration Certificate" issued by the
AIC or, in the case of unregistered marks, a claim of well-known status
confirmed by the AIC.
-- Customs
will, on an ex officio basis (without a request from the right holder),
based on suspicion of infringement, on the petition of the right holder
or his representative, or on a random basis, examine all types of
imports and exports protected by copyright and trademarks and determine
whether they are infringing.
-- The
Customs Office shall detain goods if they are suspected of constituting
an infringement or in accordance with a ruling of the Peoples Courts. On
detention of suspected infringing goods, the right holder or his
representative will be notified and can request that the customs office
continue to detain the goods. When the customs office detains goods
suspected to constitute an infringement, the right holder or his
representative will post a bond in an amount equal to the value of the
bonded goods, to be determined based on the invoice value of the goods.
If a final determination as to infringement is negative, the importer or
exporter can request relief for losses incurred in a civil court action
against the right holder. If the right holder pays any award granted by
the court, the bond will be returned to the right holder; if the right
holder does not pay such award in a timely manner, customs will forward
the bond to the court for satisfaction of the judgement.
-- Customs
can release the suspected infringing goods after the courts, Customs, or
the relevant administrative authorities make a final determination
clearing the goods of suspicion of infringement. However, if within a
period not exceeding 10 working days after the right holder has been
served notice of the detention, Customs has not been informed that
proceedings leading to a decision on infringement have been initiated by
a party other than the alleged infringer, or that the duly empowered
authority has taken provisional measures prolonging the detention of the
goods, the goods shall be released, provided that all other conditions
for importation or exportation have been complied with; in appropriate
cases, this time-limit may be extended by another 10 working days.
-- Within
ten working days or the goods being detained, the customs office will
begin an investigation as to the legitimacy of the detained goods that
are suspected of infringement. In particular, the customs office will in
every possible instance make a comparison between such suspected goods
and legal goods, carry out an inspection of the suspected goods and the
vessel of transportation concerned, inspect the factories and warehouses
that are under the customs office's supervision and are suspected of
being involved in the case of infringement, and re-examine the documents
and materials related to the case of infringement. In doing so, Customs
will search for evidence of or infringement, other infringing goods, and
the materials and implements used to make infringing goods.
-- For
cases involving suspected criminal activity and cases exceeding Customs
authority to address, Customs will, within 20 working days of the goods
being detained, notify prosecutors, the police and other relevant
administrative enforcement authorities, who will cooperate with Customs
in the investigation and punishment of these cases.
-- Imports
and exports that are determined to be infringing will be seized by
customs officials. Infringing articles seized and forfeited for
violation of China's copyright law shall be destroyed.
--All goods violating
China's trademark law will be destroyed, unless the trademark is
removed or obliterated. In that case, such goods will be kept out of
the stream of commerce and can be used only for charity, use by the
government agencies who demonstrate a need for the product, or
auctioned so long as it is not auctioned to the infringer.
-- Customs
will also impose severe administrative penalties on the infringer.
-- By
December 31, 1995, Customs will establish a central recordation system
for the protection of copyright and trademark rights. Recordation will
be valid for no less than seven (7) years or until the expiration of the
copyright or trademark right, whichever is sooner, but recordation can
be extended after its expiration.
-- The
recordation system will include information on suspected or known
infringers, including those persons and entities found by an
administrative body, judicial authorities to have dealt in infringing
imports or exports. Customs will include in this system identifying
information provided by owners of intellectual property rights or other
reliable sources an known or suspected importers or exporters of
infringing goods; means for identifying the specific merchandise that is
believed to be infringing; location and time, if available, of the
anticipated impartation or exportation; and suspected destination of
exported goods. customs will disseminate the continuously updated
information to all customs offices.
-- If the
parties concerned are dissatisfied with the customs office's decision,
they can ask for administrative reconsideration or judicial proceedings,
in accordance with the provisions of Article 53 of the Customs Law.
H.
Establishment of Copyright Verification Systems
1. Unique
Identifier
a.
Beginning on March 1, 1995, CDs and all CD-ROMS will be protected
through a unique identification verification system. By July 31, 1995,
LDs will also be protected through such a system and technical
assistance will he provided to assure that the means to implement this
system are made available by that date. To implement this system:
manufacturers of copies of CDs, LDS, and all CD-ROMs will be issued a
unique identifier that must be imprinted on the manufactured copies in
an obvious place.
b. Any
manufacturer of copies of CDs, LDs and CD-ROMs that fails to comply with
the unique identifier requirement will be punished by administrative and
judicial means commensurate with the violation.
2. Title
Verification
a. All
individuals or entities engaged in reproduction, production, or
publishing of foreign audiovisual products or computer software in
CD-ROM format must register their contracts with the NCA or local
copyright authorities.
b. Any
individual or entity that reproduces or publishes, including for export,
in foreign audio-visual products or computer software in CD-ROM format
must receive title registration from MCA and a permit authorizing the
specific act from the relevant authority. Any individual or entity that
fails to receive title registration or a permit or exceeds the scope of
the permit will be punished by administrative and judicial means
commensurate with the violation.
--NCA
shall refer documents purporting to authorize any such act to relevant
associations of right owners and shall not issue a certificate of title
registration except upon receipt of verification from such association.
-- The
relevant authority (Press and Publications, Ministry of Culture,
Ministry of Radio, Television and Film, and the local audio-visual
departments) charged with granting permits shall not issue a permit
except upon prior receipt of NCA's certificate of title registration.
Permits will be specifically limited to the acts actually authorized by
the right holder.
--The issuance of a registration certificate
with respect to a particular work will in no way preclude a later
action for infringement against any party with respect to the work.
3.
Beginning on March 1, 1995, any entity that reproduces CDs, LD's, or
CD-ROMs shall maintain, during the period of production or reproduction
and for three years thereafter, a copy of the license contract and
certificate of registration, together with an example of the copies
produced.
I.
Administrative and Regulatory Matters
1.
Trademarks
a. The
Trademark Office of the AIC, when verifying whether a mark is
well-known, will make its examination on a case-by-case basis.
Well-known marks are those known in the relevant sector of the public,
including knowledge in China resulting from the international renown of
the trademark.
b. If a
owner of the trademark requests a determination concerning whether a
mark is well-known, either directly or through the Customs Office, for
the purpose of preventing the import or export of goods or in connection
with an administrative or judicial proceeding to determine infringement,
the Trademark Office will issue a determination concerning whether the
trademark is well-known within 30 days after receipt of the request.
c.
Protection of a well-known mark will extend to products or services
other than those on which the mark is registered or used, to the extent
such use would indicate a connection between those goods and services
and the owner of the mark or adversely affect the commercial reputation
of the trademark owner.
d.
Trademarks that the Trademark Office of AIC determines are well-known,
but are not registered in China, will be protected against infringement,
including providing the right to oppose or cancel the registration of a
duplicate or confusingly similar mark. The owner of an unregistered
well-known mark will be able to enforce his rights against infringement
and counterfeiting to the same extent a registered trademark owner can
enforce rights.
e. The
Trademark Office of the AIC will not register a mark it has determined
to be well known to a person other than the internationally recognized
owner of the well-known mark. Registration of well-known marks to
persons other than the internationally recognized owner of such marks
will be canceled upon petition of the internationally recognized owner
of the well-known mark within five years of the date of registration. No
time limit shall apply for requesting the cancellation of well-known
marks registered in bad faith. If the registered mark is identical to or
substantially indistinguishable from the well-known mark, the
requirement of Rule 25(2) of the Implementing Regulations of the
Trademark Law has been met.
f. AIC
will establish and publish standards to govern the registration process,
for example, standards relating to deter-mining likelihood of confusion,
descriptiveness, and criteria for determining if a mark is well-known,
and procedures for filing and examining a trademark application, and
renewal of registration, and standards and procedures for opposition and
cancellation of marks.
2. Unfair
Competition
Any
person or entity that engages in any act of unfair competition, such as
the adoption of the trade dress, trade name, commercial indication or
trade mark or service mark of a competitor, false allegations in the
course of trade of such a nature as to discredit the establishment, the
goods or services, or the industrial or commercial activities, of a
competitor; indications or allegations the use of which in the course of
trade are liable to mislead the public as to the nature, the
manufacturing process, characteristics, suitability for their purpose,
or the quality of the goods or services will be considered to be engaged
in unfair competition. AIC and other responsible departments will
intensify efforts to address unfair competition and to strictly punish
violations commensurate with their seriousness.
II. Pursuit
of Information Dissemination and Training, and Improving the Environment
for Intellectual Property Laws
A.
Relevant authorities will conduct training and education on intellectual
property protection across the country and take the following steps:
1.
Incorporate intellectual property laws into the state's knowledge-of-law
popularization scheme, with the aim of providing training on
intellectual property rights for over 50 percent of officials at or
above the county and departmental ranks in all departments within one to
two years. Over 80 percent of persons in charge of research institutes,
large and medium-sized enterprises, and institutions of higher learning,
as well as officials in economics, science and technology, and culture
management, shall also undergo such training.
2. Make
special efforts to improve and expand the training of officials
responsible for administering and enforcing intellectual property
rights. These officials include personnel in departments of industry and
commerce, press and publication, culture, customs, and police who are
charged with enforcing patents, trademarks rights, and copyrights,
including copyright in computer software. The government will cooperate
with local judicial bodies, actions to improve the professional quality
of judicial and prosecutorial personnel, and provide Customs officers
with training courses in identifying products that infringe copyrights,
including methods of inspecting computer software, products that
infringe trademarks and other intellectual property rights.
3. Provide
national training and education about intellectual property rights
protection. These efforts will include: publicity campaigns through the
news media on intellectual property rights and the importance of
protecting them; opening or expanding special studies of intellectual
property at institutes of higher learning, and providing basic education
for undergraduates; and providing training courses for the management
staff of enterprises and non-profit-making institutions that make or
sell products protected by intellectual property rights.
B. The
Press and Publication Organizations shall:
1.
Organize manpower systematically to heighten the awareness of protecting
intellectual property rights and of intellectual property laws in
society as a whole. While giving publicity to the positive results and
experiences of enterprises and non-profit-making institutions in
protecting intellectual property rights, the media must also expose
serious infringements of intellectual property rights and local
protectionism.
2. Mount
nation-wide information and education efforts through broadcasting,
television, newspapers, periodicals, and other mass media to boost
publicity on intellectual property rights, and to publicize the
consequences of infringements of intellectual property rights. Wide
coverage shall be given to serious right infringements--including
investigations into foreign-involved cases--through television and
newspapers. This will serve as information and education for the general
public.
C. Prior
to June 1, 1995, the State Council's Office for the Working Conference
on Intellectual Property Rights will have compiled and published a body
of laws and provisions on intellectual property rights to make publicly
available the laws, provisions, regulations, standards, edicts, decrees,
and interpretations regarding the authorization, management, and
implementation of intellectual property rights. All intellectual
property laws, regulations, provisions, standards, edicts, decrees, and
interpretations will be published, and those that are not published and
made readily available will not be enforced.
D. The
State Council's Office for the Working Conference on Intellectual
Property Rights is charged -- together with the Chinese Patent Office,
the Trademark Office of the PRC State Administration for Industry and
Commerce, the State Copyright Administration, and other concerned
departments -- with compiling and publishing the "Guidelines for
Patent Application and Protection in China," the "Guidelines
for Trademark Application and Protection in China," and the "Guidelines
for Copyright Protection," in which they are to clarify standards
and procedures for intellectual property rights protection, so that
Chinese and foreign holders of intellectual property rights can have a
better understanding of the legal provisions and methods for protecting
intellectual property rights in our country. Each set of guidelines
shall clearly explain all procedures and standards related to the
application for, maintenance of, and enforcement of intellectual
property rights. The Chinese language version of these guidelines shall
be made widely available to the public by September 1, 1995.
The TCC
offers these agreements electronically as a public service for general
reference. Every effort has been made to ensure that the text presented
is complete and accurate. However, copies needed for legal purposes
should be obtained from official archives maintained by the appropriate
agency. |
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