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Overview

The Chinese government is aware that intellectual property right protection is a key for attracting foreign investment in IT industry. Clearly the government has begun establishing a comprehensive legal system for the information era.  However both local and foreign intellectual property owners continue to suffer from widespread intellectual property rights violations, especially the counterfeiting of trademarked products, copyright infringements, software piracy, and cyber squatting.

Preparations for WTO Entry

China's Patent Law and Product Quality Law have recently been amended, and its Trademark and Copyright Laws are undergoing revision in order to meet the requirements of the WTO agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs). These revisions will bring China closer to meeting international standards on intellectual property protection.

However, current penalties are inadequate to effectively deter IPR infringements. Additionally, no substantial new regulations have been issued under the Customs Law in relation to intellectual property other than confirmation of the existing border control measures. This area needs further consideration in light of the border control requirements of TRIPs.

Enforcement

China's revised Criminal Law of 1998 charges the Public Security Bureau (PSB) with handling IPR-related crimes; however, difficulties remain in obtaining prosecutions. No clear guidelines exist for other agencies to transfer cases to the PSB. It would be helpful to have indications of the thresholds that must be reached for the PSB to investigate alleged IPR crimes and for the public procurators to follow this through with criminal prosecutions.

Difficulties with enforcement at the grassroots level include lack of resources, lack of political will to act at the local level, local protectionism and corruption, reluctance or inability on the part of enforcement officials to impose deterrent-level penalties, and a low number of criminal prosecutions. New legislation and policies addressing these problems would raise the confidence of the business community.

Standardization of IPR enforcement procedures and penalties across all provinces is urgently needed for all types of infringements, particularly counterfeiting and copyright piracy cases. Further, depending on the urgency and seriousness of the infringement, rights holders should be able to petition local, provincial, or national authorities at their choice.

Below is a list of FAQ regarding to property rights protection

Source: http://www.sptl.com.cn/English/faq/faq.htm

What are the provisions of Chinese law regarding the enforcement of criminal law against infringement upon intellectual property rights?

The new Criminal Law of the People's Republic of China comes into effect on October 1, 1997. In the new Criminal Law, there is a chapter regarding crimes of infringing intellectual property. Before the new law is effective, there has been provisions in intellectual property legislation where certain activities are charged with criminal liability. The amendment of the Criminal Law shows the strengthening of protection of intellectual property.

The relevant provisions in the new Criminal Law are as follows:
1. Using a trademark which is identical with the registered trademark on the same kind of goods without a license from the owner of the registered trademark, where the situation is serious, will be punished for no more than three years fix-term imprisonment or criminal detention, and may in addition or separately be imposed a fine. Where the situation is severe, a fix-term imprisonment of no less than three years, no more than seven years will be imposed with a fine.

2. Knowingly selling counterfeiting goods, where the money amount of sale is comparatively large, will be punished for no more than three years fix-term imprisonment or criminal detention, and may in addition or separately be imposed a fine. Where the money amount of sale is huge, a fix-term imprisonment of no less than three years, no more than seven years will be imposed with a fine.

3. Forging or making without authorization of a registered trademark label of another person or selling registered trademark labels which are forged or made without authorization, where the situation is serious, will be punished for no more than three years fix-term imprisonment or criminal detention, and may in addition or separately be imposed a fine. Where the situation is severe, a fix-term imprisonment of no less than three years, no more than seven years will be imposed with a fine.

4. Counterfeiting of other's patent, where the situation is serious, will be punished for no more than three years fix-term imprisonment.

5. Anyone who, for the purpose of making profit, commits any one of the following acts of copyright infringement, where the illegal income is large or other serious situation exists, will be punished for no more than three years fix-term imprisonment or criminal detention, and may in addition or separately be imposed a fine. Where the illegal income is huge or other severe situation exists, a fix-term imprisonment of no less than three years, no more than seven years will be imposed with a fine:
1). reproducing and distributing a literary, musical, motion picture, television, audio-visual works, computer software or other works without the permission of the copyright owner;
2). publishing a book of which the exclusive right of publication is enjoyed by another person;
3). reproducing and distributing a sound or video recording produced by another person without the permission of that person; or
4). producing or selling a work of fine art with forged signature of another person.

6. Anyone who knowingly sells the abovementioned infringing works for the purpose of making profit, where the illegal income is huge, will be punished for no more than three years fix-term imprisonment or criminal detention, and may in addition or separately be imposed a fine.

7. Anyone who commits one of the following acts of trade secret infringement, when material damages are caused to the right proprietor of the trade secret, will be punished for no more than three years fix-term imprisonment or criminal detention, and may in addition or separately be imposed a fine. Where extremely serious damages are caused, a fix-term imprisonment of no less than three years, no more than seven years will be imposed with a fine:
1). obtaining a right proprietor's trade secret by stealing, luring, intimidation or any other unfair means;
2). disclosing, using or allowing another person to use the trade secret obtained from the right proprietor by the means mentioned in the proceeding paragraph; or
3). in breaching the agreement or against the right proprietor's demand for keeping confidentiality, disclosing, using or allowing another person to use the trade secret he possessed.

Anyone, who knows or should have known the acts listed in the above paragraph, obtains, uses or discloses the trade secret of another person, shall be dealt with as infringing trade secret.

The trade secret mentioned in the above paragraphs means any technology, information, or business operation information, which is unknown to the public, can bring about economic benefits to the right proprietor, has practical utility and about which the proprietor has adopted secret-keeping measures.

The right proprietor mentioned above means the owner of trade secret and the user of trade secret who is permitted by the owner of the trade secret.

When an institute commits any of the crimes listed above, the institute will be imposed a fine and the managing personnel directly responsible for the infringement or any directly responsible person will be punished according to the above provisions.

 

 How does Chinese law deal with so-called Cybersquatters, people who register trademarks of others as a domain name?

Within the last year China has seen a number of cases of Cybersquatting. People have registered trademarks as Chinese domain names with the "dot com dot cn" suffixes with the intent to sell this domain name to the trademark owner. Trademarks as domain names are valuable because they are easy to remember.

One of the first prominent cases was the dispute over ikea.com.cn. Ikea alleged that the registrant registered this name in bad faith with the intent to sell this name to Ikea. The registrant was not very credible when he argued that he had chosen the name Ikea, because "I" stood for Internet, and "Kea" was the name of an Australian talking parrot that should symbolize communication. The registrant could also not explain why he at the same time registered a significant number of other prominent trademarks.

 

How can I become the owner of a domain name on the Internet in China?

In China, an individual is not permitted to register a domain name. However, any representative office or branch of a foreign company, a nationally-registered company, or organization is free to register a domain name. The process, from application to registration, is relatively simple. In fact, one can even apply online at the China Internet Network Information Center's(CNNIC) website (www.cnnic.net.cn).

When choosing a domain name to register, the first thing one must do is check if it is already registered. This can be performed at the CNNIC website. Article 24 states that "registered domain names may be changed or canceled, but are not permitted to be transferred, sold or purchased". This means that if the owner of a domain name no longer wishes to own a domain name, he must cancel it because the sale to a third party is prohibited.

 

  Regulations and Laws on Internet