I. Laws and Regulations

On December 18, China National Intellectual Property Administration (CNIPA) published the Criteria for Determining Trademark Infringement (For-Comment Draft) to invite public comments. The eight-chapter, 58-article Draft attempts to further prescribe a suite of rules for testing trademark infringement, including trademark use, determination of infringement, exceptions, suspension of application and conflict of rights, offering workable tools for trademark enforcement agencies to deal with trademark infringement cases. The broader intent of this document is to execute the decisions of the Party and the State Council on enhancing IP protection, bolster trademark protection, ensure the legitimate rights and interests of consumers, manufacturers, businesses and foster a sound climate to do business. Professionals and the public are invited to submit their comments via email, fax and letters prior to January 18, 2020.

CNIPA issued the Notice on Strengthening the Relevant Work on the Protection of Well-Known Trademarks while Handling Trademark Violations. The Notice proposed that efforts should be made to thoroughly implement the decision-making arrangements of the Party Central Committee and the State Council on rigid IP protection, to give full play to the important role of well-known trademark protection in accelerating the construction of IP powerhouse and creating a sound business environment and clarify the specific requirements for further strengthening the investigation and protection of well-known trademarks in trademark violation cases.

 

The Central Committee of the Communist Party of China and the State Council released the Guidelines on Promoting the Preservation and Innovative Development of Traditional Chinese Medicine (TCM), pointing the direction of innovation and development of Chinese medicine in the new era. "The promulgation of the Guidelines is of great significance to reinforce IP protection and utilization in the TCM industry. As proposed in the guidelines, giving the research institutions and personnel more power to manage their scientific and technological achievements will further stimulate their motivation in R&D in the TCM industry and bring out a number of major scientific and technological achievements," said Song Xiaoting, professor of Shanghai International IP College of Tongji University and director of the Key Research Office for Legal Protection of Traditional Medicine of National Administration of TCM in an interview with the China IP News.

 

China plans to effectively curb infringements on intellectual property rights by 2022 and expects general social satisfaction with IP protection nationwide to reach a high level by 2025. Such targets are part of a newly disclosed directive titled The Guideline on Strengthening Intellectual Property Rights Protection, which was jointly released by general offices of the State Council and the Communist Party of China Central Committee. According to the directive, challenges for people who deal with IP cases, including difficulties in providing evidence, lengthy and costly legal procedures and low compensation, will be overcome by 2022. China is expected to have an improved IP protection system that will spur innovation by 2025. The directive puts forward 99 policies in four aspects to further enhance IP protection in China, Gan Shaoning, deputy head of CNIPA said at a news conference.

On October 16,  CNIPA released an official seal for geographical indications (GIs). The outgoing seal is still valid before the new one is used officially and its transitional period will last until December 31, 2020. A principal of CNIPA's IP Protection Department introduced that the official seal for GIs is designed to reflect authority, representation, versatile to suit and easy to identify. The seal is an official one featuring solemnity and authority and designed with the silhouette of the Great Wall and mountains as its foreground and the ears of rice symbolizing a good harvest, which are the most representative geographical, cultural and historical signs and convey the excellent quality and reliability of Chinese GIs. The transparent and hollowed design makes it more harmonious when the mark is used on various products and packages by companies. The base is designed in the shape of the Earth with drawing longitude lines and latitude lines and written with both the Chinese and English words "GEOGRAPHICAL INDICATION OF P.R.CHINA" and "GI", the abbreviation of "Geographical Indication", ensuring directness and readability for consumers with different language and cultural backgrounds and reflecting GI's nature as a universally-accepted IP and the vision of enlisting its help to propel Chinese products to overseas markets.

A draft law to promote the steady and sound development of cryptography as well as to ensure cybersecurity is to be submitted to China's top legislature for further review next week. The Standing Committee of the National People's Congress, the country's top legislative body, will have a second review of the draft law on cryptography at its bimonthly session that will open on Monday, according to the committee's Legislative Affairs Commission.

The State Council's decision to introduce a special regulation on bettering the business environment will give further impetus to market players and pave the way for reforms, experts have said. The draft regulation, approved at the State Council's executive meeting on Oct 8, aims to establish a fundamental framework of rules for businesses in which all types of market players, domestic and foreign, will be treated as equals. Focusing on the transformation of government functions, it also draws on advanced international standards and seeks to codify experiences and practices that have proved effective in past reforms.

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II. Government Policies

 

Recently, the general offices of the Communist Party of China (CPC) Central Committee and the State Council have jointly issued a directive titled "The Guideline on Strengthening Intellectual Property Rights Protection", raising the bar of IPR protection in the country by way of constantly improving the system and invoking all possible governing tools, legal, administrative, economic, technological, and social. "The document is the first paper on IP protection of its kind issued in the name of CPC Central Committee and the State Council, which provided the fundamental principle and guide on this field in the new era,” said an expert. The guideline consists of 99 Articles, and put forward some innovative measures on intensifying institutional constraints, strengthening social supervision and co-governance, optimizing coordination mechanism and improving foreign communication mechanism. As for the standard of compensation is still low, the guideline requires to set up punitive damage compensation system for IP infringement to further beef up IP protection and ensure the IP right is under stronger protection, so as a work system featuring comprehensive, rapid and equal protection is well established.

Patent attorneys and agencies are playing an increasingly important role in supporting national intellectual property development, building China into an innovation-driven country and expanding high-level opening-up, said Shen Changyu, CNIPA commissioner. Shen made the remark at the 10th national member representative conference of the All-China Patent Attorneys Association in Beijing on Dec 19, which attracted more than 300 participants.

 

A copyright services institution for film and television production companies was founded in Shanghai, a new step for the city to strengthen copyright protection and crack down on copyright infringement. The institution cooperates with leading law firms, banks, universities and tech companies to provide copyright-related services for film and television makers in Shanghai, including copyright valuation and development, financing, legal protection and infringement monitoring as well as personnel training. Chinese film director Zhang Jianya said he was glad to see "systematic development in copyright protection" for Chinese films and televisions. China has stepped up efforts on the protection of intellectual property rights (IPRs) in recent years.

 

China will further accelerate the layout of intellectual property right (IPR) protection centers and provide one-stop solutions for dispute resolution, according to CNIPA. The general offices of the Communist Party of China Central Committee and the State Council have jointly issued a directive calling for intensified protection of IPR. Titled "The Guideline on Strengthening Intellectual Property Rights Protection," the document said China aims to set up a number of IPR protection centers in competitive industrial clusters to increase the efficiency of accepting and hearing cases. "The purpose is to solve the proof-providing difficulties and reduce the period and cost of IPR protection by reviewing, confirming and protecting rights rapidly and in a coordinated fashion. More convenient, efficient and low-cost protection channels will be provided for the public," said Zhang Zhicheng, head of the protection department of NIPA. At present, China has approved the establishment of 25 IPR centers, which are welcomed by all sectors of society, especially small and medium-sized science and technology enterprises.

After eight years of negotiations, China and the European Union recently released a joint statement on a bilateral agreement to protect mutual geographical indications. The agreement was inked by China's Ministry of Commerce and the European Commission during French President Emmanuel Macron's visit to Beijing on Nov 6. Still subject to ratification by their respective domestic procedures, it is expected to come into effect by the end of next year. When it does, the agreement is likely to be one of the most significant trade agreements negotiated between the EU and China in recent years, according to the statement. According to the agreement, there are 100 GIs from each side to be protected. The EU list of GIs to be protected in China includes Cava and Bordeaux wines from Spain and France respectively, Feta cheese from Greece and Irish whiskey. Among the Chinese GIs to be protected in Europe are Pixian bean paste from Chengdu, Sichuan province; Anji white tea from Huzhou, Zhejiang province; and Panjin rice from an identically named city in Liaoning province.

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III. Law Enforcement

 

A pilot project to inform obligees of their litigation rights and obligations in criminal cases concerning the infringement of intellectual property rights (IPR) has been launched in six provincial-level regions in December. The one-year project, initiated by the Supreme People's Procuratorate (SPP), will be implemented in procuratorates in Beijing, Shanghai, Jiangsu, Zhejiang, Fujian and Guangdong. In the process of handling criminal cases of infringement of IPR, the public prosecutor should inform the obligee of the 12 litigation rights he or she enjoys during the examination and prosecution stages, including the right to sue and the special rights of underage obligees, according to a guideline issued by the SPP. The public prosecutor should also inform the obligee of his or her litigation obligations, such as the obligation to testify, reads the guideline. The guideline requires that obligees be informed in writing, orally or by public announcement within 10 days after the case is accepted.

Customs in Zhengzhou, the capital city of central China's Henan Province, said it detained over 3,000 items of goods, suspected of copyright infringement from January to November of 2019. According to Zhengzhou Customs, the seized items include bags, shoes, belts, glasses. Rolex, Nike and other brands were involved. Many infringers tried to transport goods across borders in batches and in small quantities through the mail, the authorities said. Authorities said they will continue to reinforce intellectual property protection, carry out a blacklist of infringing goods and safeguard the legitimate rights and interests of relevant enterprises.

China's Supreme People's Court (SPC) announced the judgment on its first administrative case of patent re-examination for a gene technology-related drug in Beijing Friday. The SPC ordered CNIPA to amend its decision on the review of the patent. The case is related to the invention patent application of "binding molecules," which allegedly belong to the domain of monoclonal antibody technology. Patent applications for the molecules had been twice submitted to the CNIPA but were both rejected. The applicant filed a lawsuit and the Beijing Intellectual Property Court (BIPC) made a judgment ordering the CNIPA to revoke its decision. The CNIPA refused to accept the judgment and appealed to the intellectual property court of the SPC. The SPC affirmed the verdict of the first trial under the BIPC, warning against underestimating the creativity involved in inventions. Experts said the judgment of the case would exert a profound influence on protecting research and innovation in the biopharmaceutical field.

 

The Huangpu customs in south China's Guangdong Province said they have seized more than 1 million pieces of integrated circuits that infringed upon intellectual property rights. With a total worth of about 108,000 yuan ($15,350), the counterfeit products bearing the Japanese brand name "Murata" were intercepted in cross-border e-commerce, the authority said. The customs have seized a total of about 1.92 million counterfeit products since the launch of a special action of IPR protection this year, covering commodities such as consumer electronics products, clothing and suitcases. Huangpu customs oversees an important maritime foreign trade corridor in south China. In 2018, the total value of imports and exports under its supervision was around 1.53 trillion yuan. Since 2018, the authority has seized 6 million yuan worth of goods that were suspected to have violated IPR.

 

China's top intellectual property regulator pledged harsher punishment against violators to strictly protect intellectual property rights and effectively optimize the business environment. To build an overall IPR protection system, the country has intensified efforts to fight IPR infringement by raising fines and increasing inspections on counterfeit goods, according to Gan Shaoning, deputy head of the National Intellectual Property Administration. In December, for example, a draft revision to the Patent Law raised fines to a range of 100,000 yuan ($14,480) to 5 million yuan when the loss to patent holders and the benefits gained by violators cannot be determined. The current range is 10,000 yuan to 1 million yuan. The draft was submitted to the Standing Committee of the National People's Congress, the top legislature, for first review. In general, a draft will become law after being reviewed three times.

Zhou Qiang, president of the Supreme People's Court (SPC), called for strong judicial support and services for implementation of the innovation-driven development strategy at a symposium held at the SPC's Intellectual Property (IP) Court on Nov 20. Since its establishment at the beginning of this year, the IP court, by sticking to the standards of "high starting point, high standards, high level and internationalization", has made remarkable achievements in providing uniform standards for trials and improving their quality and efficiency.

A joint crackdown by China and the United Arab Emirates has destroyed a network that produced and sold knockoff luxury bags on the global market, Shanghai police revealed. A total of 57 suspects were detained, 18 production workshops were shut down and knockoff luxury products worth of 1.79 billion yuan ($254 million) were seized in Shanghai, Guangdong province and Dubai in July, according to Shanghai police. The network consisted of a marketing team based in Dubai that received international orders for luxury bags and clothes; production bases, including several in Guangzhou, Guangdong province, and in developing countries; and more than 200 distributors in regions and countries worldwide.

Shanghai authorities have uncovered 328 intellectual property rights (IPR) violation cases in a campaign ahead of the second China International Import Expo (CIIE). The cases were worth over 3 billion yuan ($420 million) and 285 suspects have been detained, according to the Shanghai Intellectual Property Administration. Authorities in Shanghai launched an IPR protection campaign for the second China International Import Expo on Aug 1. The city's public security bureau, intellectual property administration and customs authorities participated in the 100-day campaign. Meanwhile, the Shanghai People's Procuratorate has set up a special team to handle CIIE-related IPR violation cases and the customs authorities have set up a branch to supervise the international expositions and exhibit items. The second CIIE is scheduled for Nov 5 to 10 in Shanghai with an exhibition area of 360,000 square meters while over 3,000 enterprises from about 150 countries and regions have signed up for the event.

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IV. Events and Campaigns

The English documentary A Remarkable Journey - The Story of Patents in China produced by China Global Television Network (CGTN) assisted by CNIPA debuted at CGTN’s English Channel, available in more than 170 countries and regions worldwide. Through narrations of a dozen Chinese and western IP insiders, witnesses and practitioners, this 52-minute-long Documentary honestly records the history of how Chinese patents have developed from nothing and become more and more mature. Compared with the hundreds of years of IP development history of western countries, it took China only 40 years to become a big IP country through efforts of several generations. China has now started its new journey of building an IP powerhouse.

On December 3, 2019, the 26th CNIPA-JPO Heads Meeting was held in Kobe, Japan. CNIPA Commissioner Shen Changyu and JPO Commissioner Matsunaga Akira attended the meeting. At the meeting, the two sides reviewed bilateral cooperation in fields such as designs, trademarks, automation, re-examinations, human resources, legal systems and application of laws, specified relevant cooperation content for the next year and exchanged views on international IP-related issues of common concern. After the meeting, the two commissioners signed the Summary of the 26th CNIPA-JPO Heads Meeting.

China and the United States have met each other halfway and reached consensus on multiple issues regarding intellectual property rights (IPRs) protection, Vice Minister of Commerce Wang Shouwen said. The consensus covers areas including the protection of trade secrets, crackdown on piracy and counterfeiting on e-commerce platforms, and crackdown on malicious trademark registration, Wang told a news briefing regarding the two countries' phase one trade deal. The consensus will help increase the inflow of foreign IPRs into China, Wang said. China and the United States have agreed on the text of a phase one economic and trade agreement based on the principle of equality and mutual respect, according to a statement issued by the Chinese side Friday night. The text includes nine chapters: the preface, intellectual property rights, technology transfer, food and agricultural products, financial services, exchange rate and transparency, trade expansion, bilateral assessment and dispute settlement, and the final terms.

Recently, at their annual meeting in Suzhou, the Commissioner of CNIPA, Shen Changyu, and the President of the European Patent Office (EPO), António Campinos, agreed to enhance their bilateral cooperation in the framework of the Patent Cooperation Treaty (PCT).The aim is to give patent applicants filing an international patent application in English at the CNIPA as Receiving Office the choice to opt for the EPO as their International Searching Authority (ISA). It is expected that this new option will be offered in 2020, and be implemented as a two-year pilot programme. For Chinese applicants, this step would offer an additional option to optimise their international patent strategy, especially when considering protection in Europe. As a result, Chinese users interested in accelerating the prosecution of their applications will, by selecting the EPO as their ISA, gain up to one year by entering into the European phase earlier and getting direct examination of their files, without the need for a European supplementary search.

China has set up a fashion intellectual property protection center during the China Fashion Week, according to the China Fashion Association (CFA). The center aims to push forward the establishment of China's fashion intellectual property protection system, safeguard the rights of original designs and inspire innovation vitality in fashion sector. To protect fashion intellectual property, efforts should be made to raise value of fashion brands, strengthen the qualification approval of cooperative enterprises and give full play to the role of intermediary agencies, said Gao Yanmin, an official with the Ministry of Industry and Information Technology.

 

A one-stop online service system of copyright protection and trade was unveiled at the 2019 IP Global Licensing Conference. Based on blockchain technology, the system called Banmaip provides business-to-business services regarding copyright certification, trading, circulation monitoring and protection, as well as derivative products' design and sales. In the future, it will also function as a business-to-customer network, providing sales channels for individual designers to commercialize their works and a social network for them to exchange information. Banmaip.com was initiated by the Beijing International Copyright Exchange Center under the joint effort of 16 national-level copyright trading centers and bases.

China sees remarkable progress in IP protection in E-commerce, according to the 2019 China Research Report on E-Commerce Intellectual Property Development, released on December 12. A joint of production of CNIPA and the Ministry of Commerce (MOC), the report is authored by CNIPA's IP Development and Research Center with support from CNIPA's IP Protection Department and MOC's Department of E-commerce and Informatization. The report reviews IP protection and governance in China's e-commerce during the year, evaluates and summarizes practical experiences of IP protection in e-commerce from aspects such as IP protection data, governance challenges and results of mainstream e-commerce platforms and proposes a 'Four Ruleds' concept namely, ruled by law, ruled by platform's actions, ruled based on public consensus and ruled with wisdom.

A cooperation agreement on the construction of a Sino-Singapore international scientific innovation cooperation demonstration zone in Guangzhou was signed during the China-Singapore Joint Council for Bilateral Cooperation Meeting in Chongqing on Oct 15. The zone, located in Sino-Singapore Guangzhou Knowledge City, will be co-built by the administrative commission of Sino-Singapore Guangzhou Knowledge City, Sino-Singapore Guangzhou Knowledge City Investment and Development Co Ltd, and CapitaLand Limited, one of Asia's largest diversified real estate groups. Being designed as a high-level industrial zone for Sino-Singaporean international scientific innovation, the zone will carry out mutual cooperation in areas like intellectual property, smart cities, financial services, digital economy, and talent training.

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V. Data and Statistics

The value-added output of China's copyright industry stood at 6.63 trillion yuan (950 billion U.S. dollars) in 2018, accounting for 7.37 percent of the country's GDP, according to a report released Monday by the Chinese Academy of Press and Publication. The 2018 figure surged 55 percent from 2013, when the industry's contribution to GDP was 7.27 percent, said the report. Core copyright sectors, which refer to those that create copyrighted works as their primary products, hit 4.17 trillion yuan in 2018, an increase of 9.3 percent year on year, it said.

Beijing has seen an increase in the number and variety of intellectual property disputes over the past five years after the city strengthened efforts to protect IP rights. The Beijing Intellectual Property Court said it had filed 72,681 IP cases covering patents, copyright, trademarks and unfair competition, since it was established on Nov 6, 2014. Over that period, there has been a 26 percent average annual increase in IP cases. Of the total, 21 percent involved foreign litigants from 90 countries and regions across the world. Of those, 30 percent related to litigants from the United States and 15 to nations involved in the Belt and Road Initiative, according to the court's statistics.

According to a report published by the World Intellectual Property Organization, between 2015 and 2017, some 30 metropolitan hot spots accounted for 69 percent of all patents and 48 percent of scientific activity. Most of these hot spots were located in China, Germany, Japan, South Korea and the United States. The report said innovation has become more collaborative and international in nature. For instance, in the early 2000s, teams of scientists produced 64 percent of all scientific papers and teams of inventors were behind 54 percent of all patents. By the second half of the 2010s, these figures had increased to almost 88 percent and 68 percent, respectively. The share of scientific collaborations with two or more researchers located in different countries grew to around 25 percent in 2017. For patents, the share of international co-inventions had increased to 11 percent until 2009, but has since slightly fallen, partly because of rapid growth in domestic collaborations in certain countries. The top 10 metropolitan hot spots with most international collaboration were San Francisco-San Jose, New York, Frankfurt, Tokyo, Boston, Shanghai, London, Beijing, Bengaluru and Paris. They together accounted for 26 percent of all international co-inventions.

 

Under the theme of "New Era, Shared Future", the CIIE, as the world's first import expo of its scale, has gained wide attention and high acclaim from around the world. The second CIIE attracted more than 3,800 companies from all over the world, with a total exhibition area of 360,000 square meters. The exhibition had received more than 910,000 visitors, according to the CIIE Bureau. The number of registered professional visitors for the second CIIE exceeded 500,000. Of them, more than 7,000 were overseas buyers. Up to 32 percent of professional visitors specialized in manufacturing, while another 25 percent were from the wholesale and retail industries. The total value of intended deals surpassed $71.13 billion, 23 percent higher than the first expo, according to the CIIE Bureau. At the three-day supply-and-demand matchmaking meetings during the second CIIE, up to 1,367 exhibitors from 103 countries and regions and 3,258 buyers reached a total of 2,160 purchase intention agreements.

The annual WIPI report released by the World Intellectual Property Organization in Geneva shows that more than two-thirds of all applications for patents, trademarks and industrial designs filed last year was from Asia. China's National Intellectual Property Administration received a record 1.54 million applications, accounting for 46.4 percent of the world's total. When it comes to trademarks, global filings increased to 14.3 million, marking an increase for a ninth consecutive year, according to the report. China continued to lead in trademark applications worldwide, with the US, Japan, Europe and Iran taking the remaining four places among the top five. There were an estimated 49.3 million active trademark registrations worldwide in 2018 - up 13.8 percent on 2017, with 19.6 million in China alone, followed by 2.4 million in the US, and 1.9 million in India. As an IP powerhouse, China also claimed the crown in terms of applications for industrial designs and new plant varieties, representing more than a half and over a quarter of the world's total respectively. The country ranked second by number of valid geographical indications last year, after Germany.

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