New Criminal Law
The new law codifies a number of offences created by recent regulations and decisions adopted by the Standing Committee of the NPC, as well as introducing the new crime of misusing trade secrets. Section 7 of Chapter III creates two types of offence within the Crime of Undermining Socialist Economic Order. These are crimes of producing or selling counterfeit or inferior goods and crimes of infringing IPRs.
The acts which constitute a crime of infringing someone else's IPRs are now divided into seven categories and those which constitute the crime of producing or selling counterfeit or inferior goods into nine. The point at which these acts constitute a crime, however, has been the subject of ongoing debate and while the new law seeks to address this by establishing quantitative criteria, they are vague guidelines that still leave much room for interpretation.
The elements of the offence that must be proven in most cases of IPR infringement are that there is a "gross violation", that the circumstances are "serious" and that the defendant has obtained a comparatively large amount of illegal income" or the losses incurred to the victim are "heavy". The crime of "passing off a patent" of another person (article 216) and "sale of infringing copies" (article 218) can result in a maximum penalty of three years, while all other crimes of IPR infringement carry a maximum penalty of seven years imprisonment. While the crime of "counterfeiting a registered trademark" carries a maximum penalty of seven years it does not extend to the use of identical or similar trademarks on similar goods.
New Criminal Procedure Law
The New Criminal Procedure Law extends and clarifies the range of private prosecution cases to include both crimes of producing or selling counterfeit or inferior products and crimes of infringing the rights of IPR holders. Such cases can now be handled directly by the People's Court, although if the circumstances seriously violate social order or national interest, the case will be accepted and investigated by the Public Security Bureau.
Private prosecution is not the only option available under the New Criminal Procedure Law. Public prosecution is also possible, although the Public Security Bureau has jurisdiction over these cases and is responsible for accepting and investigating the case.
Regulations on Recordal of Trademark License Contracts
The Regulations on Recordal of Trademark License Contracts came into effect on August 1st of 1997. The regulation, issued by the State Administration for Industry and Commerce, expounds on Articles 6 & 26 of the Trademark Law and Articles 35 & 36 of the Implementing Regulations. It sets out in more detail the procedural requirements for recordal of trademark licenses (such as necessary documents and clauses in license contracts etc).
State Intellectual Property Office
The State Patent Bureau, which was mainly responsible for patent application and management, has now been renamed the State Intellectual Property Office ("SIPO"). The change is a part of the on-going administrative reshuffle aimed at improving the PRC's trademark, copyright and patent application and management system.
SIPO is under the direction of the State Council and it is hoped that the reshuffle will bring about greater co-operation with the State Administration for Industry and Commerce and the State Press and Publication Administration. Whether these three offices will in fact work together is questionable given that there is still overlapping of key functions.
Domain Names
The China Internet Information Center (CNNIC), was set up on June 3rd 1997 by the Information Administration Office under the State Council, who at the same time issued the Interim Measures for the Administration of the Registration of Domain Names on the Internet in China and Implementing Regulations for the Registration of Domain Names on the Internet in China.
The CNNIC is the administrative organ in charge of Internet domain names, responsible for providing registration services for domain names, IP address distribution, and autonomous system number distribution for Internet users in the PRC.
The Interim Measures and Implementing Regulations set out the main responsibilities of CNNIC, the structure of the domain name system, the requirements for entities applying for domain name registration, the regulations on the designation and use of the three levels of domain names, the procedure for examination and approval of domain name registration and the procedures for change and cancellation of domain name registration.
The Anti-unfair Competition Law and Advertising Law also stipulate on the pre-emptive registration of domain names on the Internet. If the pre-emptive registrant of a domain name exploits the name of another person as its domain name to advertise its own products, or if a pre-emptive registrant does so only for the purpose of making profits by selling and buying domain names, then such an act amounts to unfair competition.
Luke Minford is a barrister and solicitor admitted in New Zealand and an IPR consultant at Rouse & Co International, Shanghai.
The content of this article is to provide only a general information on the subject. Legal advice should be sought for any specific circumstances.
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