CHINA
He dismisses the notions that counterfeiting and piracy are anything other than development issues. “[IP infringement] is generally attributed to Chinese traditional culture, the economic system, the legal environment, and even nationalist sentiments of the Chinese populace. Tese ideas are making the situation too complex.”
He explains: “China’s [IP infringement] problem has nothing to do with morality or even xenophobia; it is purely a matter of poverty. Piracy was similarly rampant in other Asian countries such as Korea and Japan until people there got richer and domestic needs emerged to encourage their governments to take action to protect IP. With Chinese nationals getting wealthier, the situation will get better in the near future.”
Courting favour
Intellectual property enforcement in China is overseen by the country’s four-level court system. Te Supreme People’s court is the highest court in China. Local people’s courts make up the remaining three levels. Tey consist of high, intermediate and basic people’s courts that have jurisdiction over provinces, autonomous regions, prefectures, municipalities, autonomous counties, towns and municipal districts.
China’s people’s courts provide judicial protection for IP through civil, administrative and criminal procedures. From 1985 to 2009 (the official statistics of 2010 are still awaited), the courts concluded 166,408 civil, 6,387 administrative and 14,509 criminal cases at the first instance, concerning intellectual property. Te Supreme People’s Court has published 41 judicial interpretations, and more than 40 judicial guidelines have been issued to help instruct the lower courts.
Jiang says: “Issuance and implementation of judicial interpretations and guidance documents have provided courts with more concrete substantive and procedural bases on which they rely for adjudication of IP-related lawsuits. As a result, the judicial system has continued to see progress. According to statistics dated October 2008, China’s local courts had established a total of 298 separate IP divisions and 84 IP panels in civil divisions, and staffed 2,126 specialised IP judges.”
But Jiang says that the courts still need to find ways of steadily lowering the cost of protecting IP, increasing the cost of infringement and preventing infringement more effectively. “[It has been proven] that establishing a specialised IP tribunal in the people’s court agrees with the Chinese judicial system,” he says. “[It guarantees] the judgment quality of IP cases, [trains
“ AS CHINA BECOMES A MAJOR PLAYER IN THE GLOBAL ECONOMY, IT NEEDS TO STRENGTHEN ITS DIALOGUE AND EXCHANGES WITH FOREIGN COUNTRIES AND INTERNATIONAL ORGANISATIONS. [IT MUST ALSO] CO-OPERATE WITH OTHER MAJOR ECONOMIC POWERS BY ALL MEANS, PARTICULARLY IN THE AREA OF ENFORCEMENT AND DAMAGES.”
“IPR owners may get more compensation for their loss caused by the infringement in civil procedures. In civil procedures, IPR holders have opportunities to claim economic damages for the loss of market share and for lost income caused by infringements. By contrast, administrative and criminal procedures only provide opportunities to impose administrative penalties or criminal punishment on infringers in addition to fines. As a result, monetary compensation awarded by civil procedures is much more.”
Jiang adds: “Since civil cases are initiated by IPR holders themselves, they may file lawsuits against infringement more quickly. Comparatively, initiating criminal cases is more difficult, not only because they are generally initiated by prosecutors aſter an initial Public Security Bureau investigation, but also there exists a minimum value threshold for infringing to be eligible for a criminal case.”
people] for IP judgment and [allows] judgment experience [to be accumulated].”
He adds: “Sticking to [this] method, the courts should continue to explore establishing specialised IP tribunals [that accept] civil, administrative and criminal cases together, and to integrate and optimise judicial resources. Te court may also research the feasibility and necessity of establishing an IP appellate court to meet the requirement of perfecting the IP appeal procedure…”
Being civil
IP owners wishing to enforce their rights in Chinese courts may face civil, criminal or administrative procedures. Civil and criminal cases usually involve acts of infringement, while administrative cases tend to focus on invalidity disputes and judicial review. “In my experience, civil processes appear to be more effective in preventing IP infringements and [securing] compensation,” says Jiang.
He explains: “Judges of civil cases are more familiar with IP than those of criminal procedures. In China, first instance IP civil cases are heard by specialised IP tribunals, in an Intermediate People’s Court. However, IP criminal cases are first heard by criminal tribunals in the court with jurisdiction over the location of criminal offences; courts at the lowest level typically serve as the court of first instance. Terefore, judges of civil cases are better in terms of IP-related experience and expertise.”
18 World Intellectual Property Review May/June 2011
“However, the effectiveness of specific courts depends on the specific case and needs of the IP owner,” Jiang concludes.
Driving revenue
China offers plenty of ways of enforcing intellectual property, but it must also protect IP from the outset to allow businesses to properly plan and implement their IP strategies.
Foreign brand owners wishing to do business in China have to consider language issues when deciding how best to protect their IP. Te country’s population use languages with words that may not directly translate into other languages. As such, brands traditionally protected by word marks may suffer in a market such as China, so non-traditional marks for things like sound and three-dimensional images may offer an alternative.
Non-traditional trademarks are not registrable under China’s current Trademark Law, according to Jiang. “…Article 8 [of the law] provides that ‘any visual sign capable of distinguishing the goods or services of one natural person, legal person or any other organisation from those of others, including words, devices, letters or numerals, three-dimensional symbols, combinations of colours or any combination of the above elements may be applied for the registration of a trademark,” he says.
But these restrictions are being revised to modernise and harmonise China’s trademark system with other systems around the world, explains Jiang.
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