Commentary

China's Legal System on Intellectual Property Rights and the Approaches to Its Protection

Huang He, Director General of the Legal Affairs Department, China Council for the Promotion of International Trade (CCPIT)
(This talk was presented at the US China Business Forum in Dallas, March 14, 2005. Forum was organized by CCPIT, UT Dallas and SMU)

About Mr. Huang

Mr. Huang's long-time engagement in foreign-related legal work and financial management enables him to have an intensive study in the field of commercial dispute conciliation, foreign-related arbitration, force merger and intellectual property affairs as well as profound knowledge in law, economic and trade policies, international trade custom, financial management and much experience in international trade practice. Mr. Huang obtained his bachelor's degree in economics from one of China's top universities, Renmin University and did post-graduate studies in Civil and Commercial Law. He is also an arbitrator and member of China's Law Society.

In July 1983 Mr. Huang joined the Department of Legal Affairs of CCPIT and assumed successively the positions as Deputy Director and later Director of the Trademark Affairs Office, General Affairs Office and Secretary Office for Trade Arbitration. In 1994 he was promoted to be the Deputy Director General of the Legal Affairs Department in charge of accepting and consulting on arbitration cases, certification and authentication, ATA, general affairs, financial management and the legal work of the national CCPIT systems. From August 1997 to April 2000 he became Deputy General Manager of China Global Import and Export Corporation.

Since May 2000 he became the Deputy Director General and later Director General of the Legal Affairs Department of CCPIT. Mr. Huang's other posts include Vice Chairman of China International Economic & Trade Arbitration Commission, Vice Chairman and Secretary General of the CCPIT/CCOIC Dispute Conciliation Center, Secretary General of Sino-American Commercial Dispute Conciliation Center and Secretary General of Sino-Canadian Commercial Dispute Conciliation Center. Mr. Huang has had his theses publicized on related academic publications, such as Opinions on Improving the Economic and Social Benefits of International Trade Arbitration, Some Thoughts on the Development of World Rules of Origin, Theory of Force Merger Certification. He has also led the compilation of Theory and Practice of Commercial Dispute Conciliation in China.

Introduction

China has been in the WTO for several years and the Chinese society irrespective of its government or the populace has been living up to its commitments to the WTO on its accession to this world organization while maintaining its zeal and confidence in continuing to expand its reform and opening up and strengthening its international exchanges. Since it began its reform and opening up, China has introduced a whole set of relatively comprehensive legal systems, including a legal system for the protection of intellectual property.

The legislation in this field in recent years has given rise to a complex system that combines the protection of intellectual property rights by both the judicial departments and governmental departments. Following its entry into the WTO, China has amended more than a hundred laws and regulations in the light of the rules of the WTO in a way that the Chinese legal system on the issue of intellectual property protection has virtually caught up with the recognized international practice. I would like to brief you on the protection of intellectual property rights by the Chinese law and the present Chinese ways and means of addressing the issue of intellectual property protection.

One. Chinese Laws on the Protection of Intellectual Property Rights

(I) The Chinese legal system

1. The domestic laws

China began making laws specifically for the protection of intellectual property rights in 1982 and so far has formed a fairly comprehensive legal system in this respect. First of all, the Chinese Constitution stipulates that the right to intellectual property is a fundamental right of a citizen. And the country has also introduced a whole series of special laws to regulate different types of intellectual property rights. They include the Trademark Law, the Patent Law, the Copyright Law, the Law against Improper Competition, the Regulations for the Protection of Computer Software, and the Regulations for the Protection of New Plant Species and a dozen other laws and administrative regulations. Which thus extends Chinese legal protection to the rights to trade marks, patents, copyright (including the copyright of computer software), commercial secrets, new plant species, integrated circuit designs, medicine formulas, agricultural chemical products, Olympic logos, website names, etc. They far exceed the scope covered by the TRIPs. Furthermore, China has formulated a series of laws for the building of an intellectual property market characterized by fairness, rationality, exchange of equal value and with compensation, honesty and good credit.

Meanwhile, the Chinese Supreme People's Court has made dozens of judicial interpretations to provide detailed rulings on different issues involved in cases of disputes over intellectual property rights through scientifically and accurately applying the relevant laws.

2. The international treaties and bilateral agreements China has signed

China has participated in the Convention on the Founding of a World Organization for Intellectual Property Rights, the Paris Convention on the Protection of Industrial Property and a dozen other international conventions on the protection of intellectual property.

In addition, China has signed with the United States and some other countries bilateral agreements on jointly protecting intellectual property rights, including the Sino-US Memorandum of Understanding on Intellectual Property and provides special protection to certain intellectual property rights of American enterprises on the basis of that memorandum.

All those provisions in the fairly comprehensive legal system I mentioned briefly above serve as the legal foundation for the settlement of disputes over intellectual properties. That should be an indication of the high degree of the protection provided the Chinese legal system for intellectual property.

(II) In what ways Chinese laws provide protection to the intellectual property rights of foreign companies

1. The Chinese laws set very relaxed conditions for the attainment of protection for intellectual property rights which enable more intellectual property rights of foreign enterprises to come under the protection of the Chinese law.

First of all, the Chinese law gives a six-month priority to applications of trademark registration in China to applicants which have first applied trademark registration abroad.

Then in applying for patent rights, the Chinese law also provides priority for applicants which have first made such applications abroad.

And furthermore, on the question of the qualifications for the protection of copyright, the copyright in China is acquired automatically, namely, the author automatically acquires the copyright of his works at the time he finishes it, which is different from the rights of trademark or patent rights the acquisition of which must follow the approval of registration application.

2. The Chinese law also has special stipulations on the international registration of trademarks and international application of patent rights, which gives foreign enterprises a short cut for obtaining the protection of intellectual property rights by the Chinese law.

3. The Chinese law has special protective measures for world-renowned foreign trademarks.

4. China has been faithful to its commitments to the principles and rules of the international treaties and agreements it has signed, including the principles of national treatment, priority treatment, and independence of trademarks provided in the Paris Convention on the Protection of Industrial Property, the requirements and procedure of international registration of trademarks provided in the Madrid Agreement, the principle of most favored nation treatment, the principle of judicial transparency and the principle of judicial conclusion review provided by the TRIPs.

Meanwhile China has signed bilateral agreements on cooperation in the protection of intellectual property rights with a number of countries. An enterprise of a country which is a member nation as China of an international convention or a party to a bilateral agreement with China on the protection of intellectual property rights may seek special protection of its intellectual property rights in China in accordance with those conventions or agreements.

Two. The Chinese Approaches to Intellectual Property Protection

On the question of protecting intellectual property rights, on the one hand an enterprise should have a set of rules for self protection such as timely registration of trademarks and application for registration of patent rights.

On the other hand, in addition to perfecting the internal rules for the protection of intellectual property, an enterprise should seek the proper channels for help in the event its intellectual property is infringed upon or threatened. These channels may be sought in China for help to protect the intellectual property rights:

(I) Legal protection

The legal procedure is the ultimate resort for the prevention of infringement of intellectual property in China and it is of the highest effect. Since its accession to the WTO, China has made reforms and readjustments of its judicial system in an effort to implement the rules of the WTO. These are the protections the Chinese courts provide for intellectual property today:

1. The courts accept cases in a very extensive field, covering intellectual property rights of all categories.

2. Court rulings include a complete set of rulings on civil responsibilities such as permanent prohibition, legal compensation, establishment of infringements upon intellectual property and other newly introduced rules and measures.

3. A comprehensive set of preliminary measures have been introduced such as preservation of evidence, preservation of property prior to a legal action and temporary prohibition.

4. The courts may seek the criminal responsibilities of an actor of infringing upon an intellectual property right when the case involves criminal responsibilities for violation of the criminal law while seeking the civil responsibilities of the actor of infringing upon an intellectual property right in accordance with the Civil Law and Civil Procedure Law.

(II) Protection by administrative measures

Although not as powerful as judicial measures, administrative measures have their advantage of being more flexible and extensively applicable in protecting intellectual property rights. Different types of intellectual property rights are under the protection of different administrative departments in China.

1. The protection of patent rights

The Patent Office of the People's Republic of China and its local offices are responsible for the registration and administration of patent rights throughout the country and their functions include:

1. They handle applications for patent registration and the administration of relevant matters on behalf of the China Patent Office.
2. They settle disputes over patent rights, establish acts of infringement upon patent rights and mete out administrative penalties (including fines) in accordance with the law.
3. They may request the Trademark Review and Adjudication Board of the China Patent Office for a review of a trademark and in case they believe a patent right has been granted because of a breach of the relevant law, they may request the Trademark Review and Adjudication Board to nullify a patent.

2. The protection of trademarks

The Trademark Office of the State Administration for Industry and Commerce and the local authorities for the administration of industry and commerce at all levels are responsible for the registration and administration of trademarks and their main functions are:

1. Handling and examining the application for registration of trademarks and the administration of the transfers, alterations, cancellation and extension of trademark registrations.
2. Giving rulings on disputes over trademarks and decisions on applications for cancellation of trademarks.
3. In case of disagreement to the ruling on a dispute over or decision on application for cancellation of a trademark by the trademark office, the case may be brought to the Trademark Review and Adjudication Board for a review. If still not reconciled to the result of the review, the case may be brought to the people's court.
4. An obligee may request the authorities for industry and commerce across the country to deal with actions of infringing upon trademark rights and the authorities for industry and commerce should make proper investigation into and mete out administrative penalties on actions of infringement.

2. The protection of copyrights

The Chinese government departments responsible for handling copyright matters are the State Copyright Bureau and the copyright administrative offices of the people's governments of the provinces, autonomous regions and municipalities directly under the State Council. The principal role of the State Copyright Bureau is to investigate into and deal with major cases of infringements upon copyrights in the country and in charge of the administration of the copyrights of the state. The copyright offices of local governments are mainly responsible for punishing acts of infringing upon copyrights and providing consultancy service.

The registration and administration of copyrights of computer software is the responsibility of the local copyright offices.

4. The control of infringements upon commercial secrets and other improper competitions

The responsibility of controlling improper competition in China lies with the administrative authorities for industry and commerce of the people's governments at and above the county level. They may investigate into and mete out penalties on acts of improper competition.

5. Administration over new plant spices

The agricultural and forestry administrative departments in China are responsible for the examination and approval and administration of new plant species.

6. The channel for applications for administrative protection of medicines

The State Pharmaceutical Administration of China handles applications for administrative protection of medicines and other relevant matters.

7. Protection of intellectual property rights by the Customs Office

One of the functions of the Chinese Customs is to protect the intellectual property rights related to imports and exports which are under the protection by the Chinese law and its main form of protection is withholding the goods that infringe upon intellectual property rights. And for this purpose, China has formulated and promulgated the "Regulations for Customs Protection of Intellectual Property" which has detailed provisions for the protection of intellectual property rights.

(III) Protection of intellectual property rights by non-governmental organizations

There are mainly two types of non-governmental organizations in China that can provide protection of intellectual property rights. One type includes collective organizations for the protection of intellectual property rights set up with official approval and the other type includes commercial organizations.

Commercial organizations in China include chambers of commerce and all sorts of trade associations set up in the provinces and cities and the China Chamber of International Commerce. Here I would like to say a few more words on the channels of protection provided by the China Chamber of International Commerce.

Three. The role of the China Chamber of International Commerce in Intellectual Property Protection

The CCIC, the oldest non-governmental organization set up in China for the purpose of handling and studying matters related to the protection of intellectual property rights, has all along taken an active part in the drafting of laws and regulations in connection with the protection of intellectual property rights in China. Its main functions are:

1. It has set up a patent and trademark office, the largest office with the longest history in China dealing with issues related to the protection of foreign intellectual property rights, is capable of acting as agent for foreign enterprises to apply for registration of trademarks, patent rights and copyrights in China and apply for registration of computer software, website names and protection of intellectual property by the Customs.

2. Its law office provides legal advice service for Chinese and foreign enterprises on the protection of intellectual property rights, including handling complaints and inquiries on legal matters from Chinese and foreign enterprises, providing legal advices on disputes between enterprises, assisting enterprises in investigations into acts of infringements upon intellectual property rights in China and acting as agent in law suits and arbitration on matters related to intellectual property.

3. Its Business Dispute Mediation Center is a flexible and active organization capable of mediating between enterprises Chinese or foreign on disputes over intellectual property rights. The Center has forged ties of cooperation with the CPR, the American Chamber of International Commerce, the Italian Chamber of International Commerce and many other foreign counterparts, which enables it to rely on this convenience to settle international disputes over intellectual property rights.

5. It maintains close relations with other domestic organizations regarding the protection of intellectual property rights such as the All China Association of Patent Agents, the China Trademark Association and the China Society of Intellectual Property Rights.

6. It also maintains close ties with major international organizations of intellectual property rights such as the World Intellectual Property Organization, the International Trademark Association, the International Association for the Protection of Industrial Property and the International Association of License Trade Workers.

7. It has established lasting cooperation and connections with the Chinese government.

8. It has extensive exchanges with the Chinese government departments in charge of foreign trade and the administration of intellectual property. It has so far signed a "Memorandum of Understanding of Intellectual Property Protection" with the Italian Foreign Trade Committee and has a hotline installed in its legal office for the purpose of combating counterfeits to provide intellectual property protection especially for Italian firms in China. And on this basis, it is planning to step up its cooperation with other countries in the field of intellectual property protection, particularly in combating counterfeits.

While constantly improving the above mentioned channels for the protection of intellectual property rights, the Chinese government in recent years has been making redoubled efforts in the fight against acts of infringing upon intellectual property. It has set up a State Working Team for Intellectual Property Protection to be in charge of making macro coordination of the work of intellectual property protection and supervising the handling of major cases of intellectual property infringement in China. China has improved the communicating and coordinating mechanism with foreign-funded enterprises and energetically pushed international cooperation in this field. Meanwhile the Chinese government has launched nationwide drives to protect intellectual property and severely punish all forms of infringements upon intellectual property rights. All this is ample proof of the fact that the Chinese government is attaching great importance to intellectual property protection and the Chinese society has gained sufficient understanding of the importance of combating counterfeits and protecting intellectual property.

Chinese government and Chinese society brought up different emphases of work at different epoch. In the 1980s, Chinese advanced the slogan: "Let the world be filled with love" To express their wish for world peace. And in the 1990s, China raised the slogan "Protect the environment and prevent pollution for the sake of our common homestead." At the turn of the century, China set out with redoubled efforts to push the work of protecting intellectual property as a way of cherishing the intellectual fruits of humanity.

There do exist some problems in the field of intellectual property protection in China. But they are drawing close attention and being earnestly addressed. The Chinese government has been firm in its determination and attitude toward the issue of protecting intellectual property rights and sees to it that the legitimate rights of all holders of intellectual property of all countries be well under protection in this country and all acts of infringements and counterfeiting be punished in accordance with the law. The issue of intellectual property is an international issue by nature, which calls for close cooperation of all quarters. We hope that those countries with misgivings regarding the issue of intellectual property protection in China will drop their misgivings and try to know more about the Chinese laws and regulations in connection with the protection of intellectual property rights. Let's strengthen our cooperation and work together to promote the dissemination and progress of the human intellectual fruits in science and technology.

That's all I have to say today. Thank you.