1.1   IPR owners in China have a choice of how to enforce their 
      rights, through:

      1.1.1     the People's Courts
      1.1.2     criminal prosecutors or procuratorates
      1.1.3     other administrative authorities with special 
                responsibility for the IPRs in question
      1.1.4     the Customs.

1.2   By the 1995 US-China Memorandum of Understanding (MOU'95), 
      China has undertaken to put in place a further mechanism 
      involving Enforcement Task Forces, representing a combination 
      of the above elements, to enable a unified enforcement 
      approach. The MOU requires a single contact name and number to 
      be published for Task Forces in each major locality to which 
      IPR proprietors can complain, following which enforcement 
      action should follow without the need to identify the relevant 
      administrative authority.

1.3   If the parties agree, the Chinese arbitration system can be 
      used (eg. to resolve contractual/licensing disputes within 
      China). Arbitration awards outside China are also enforceable 
      through the Chinese courts if the requisite formalitIes of the 
      New York Convention - to which China is a party - have been 


2.1   China is widely perceived by those outside it to be a 
      jurisdiction in which the Rule of Law is overshadowed by the 
      Rule of Man. 

2.2   However, the extensive powers accorded to the administrative 
      authorities in China can mean that IPRs are enforced swiftly 
      and at low cost.

2.3   The People's Courts are experimenting with specialist tribunals 
      for dealing with IPR cases. An increasing number of court 
      decisions involving local PRC entities are being reported. 
      Where foreign entities are involved, increasingly harsh 
      sanctions and compensation awards are being imposed. The court 
      system should therefore not be overlooked as an effective means 
      for securing redress.

2.4   Where administrative action is taken arbitrarily to enforce 
      IPRs without sufficient basis, appeals may be lodged with a 
      higher level of the relevant authority or with the People's 
      Court. There is also a developing jurisprudence for 
      Adminstrative Review which may be used to challenge 
      administrative decisions which are not otherwise appealable. 

2.5   In short, China's legal and administrative systems are 
      responding to the demands of an increasingly free-market 
      oriented "economy with Chinese socialist characteristics". When 
      used in the right way, appropriate relief can in most cases be 

1 May 1996

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