What are the causes of counterfeiting and piracy in China?
The causes of counterfeiting piracy in China include global outreach, industrial and technical development, inconsistent penalties on traffickers, special rules governing FTZ.
Which are the goods that most often face counterfeiting and piracy in China?
Footwear, clothing, leather goods, electrical equipment, watches, medical equipment, perfumes, toys, jewellery, and pharmaceuticals are the goods that most often face counterfeiting and piracy.
Does China have a well-established framework for the enforcement of Intellectual Property Rights (IPRs)?
What are the specific laws/orders/rules laid down in China for the enforcement of Intellectual Property Rights?
They are as follows:-
The Criminal Law of the People's Republic of China, 1997
The General Provisions of the Civil Law of the People’s Republic of China (the Civil Law General Provisions);
The Contract Law of the People’s Republic of China (the Contract Law)
The PRC Patent Law, 1984; amended in 1992, 2000, and 2008
The PRC Trademark Law, 1982; amended in 1993, 2001, 2014, and 2019
The PRC Copyright Law, 1990; amended in 2001 and 2010 and PRC Tort Liability Law, 2009
The Anti-Unfair Competition Law, 1993; amended in 2017 and 2019 and Administrative Licensing Law, 2003; amended in 2019.
What are the different types of IPRs protected by IPR enforcement in China?
The registered rights available are invention patents, utility patents, design patents, and trademarks. Copyright can also be recorded. There are unregistered rights derived from the law on trade secrets and unfair competition; however, these are difficult to rely upon, and it is therefore, advised that the rights owners register their IP assets with the relevant authorities.
What are the general IPR enforcement obligations in China?
Registration is a must for patents and trademarks. Copyright comes into being automatically.
What are the essential to-dos before an IP rights holder initiates the enforcement proceedings?
The essential to-dos before an IP rights holder initiates the enforcement proceedings are as follows:
a) Research about the potential infringement
B) Send a cease and desist notice before starting a litigation process or strategizing on it; and
C) Consider negotiation before going to court.
Is there any limitation period for filing an infringement action?
Yes (02 years)
Which of the following IPR enforcement channels is/are available in China?
A) Government Authorities - Yes
B) Police Officials - Yes
C) Judiciary - Yes
D) Customs - Yes
Are civil actions available for the enforcement of IPRs?
Is the IP rights holder required to present reasonable evidence to support his claims of infringement against the opposing party in civil litigation?
Which of the following types of civil remedies is/are available in China?
A) Injunctions - Yes
B) Monetary Compensation - Yes
C) Raids - Yes
D) Seizures - Yes
E) Destruction - Yes
Are there any other civil remedies available in China than the ones mentioned above? If yes, then kindly explain in brief.
The Chinese courts can award damages and may order interlocutory asset and evidence preservation orders. If infringement is found, the courts have the jurisdiction to order infringers to publicize their apology in the media, which is effective in deterring other infringers in the market.
Also, other administrative actions may be taken by making a case at the Intellectual Property Offices (IPOs) for patent cases, the Administrations for Industry and Commerce (AICs) for trademark cases, the Copyright Office for copyright cases, and the Quality and Technical Supervision Bureaus (QTSBs) (local divisions of the Administration for Quality Supervision Inspection and Quarantine) for goods breaching quality or safety standards.
What is the approximate timeline of civil litigation related to IPR enforcement in China?
The most straightforward cases require only 06 months to 01 year, and hence, could be less expensive than litigation in the US or Europe.
What happens if an IP rights holder abuses the enforcement measures in civil litigation?
Are there any disadvantages of civil litigation in China? If yes, then kindly give 2-3 points?
The disadvantages of civil litigation include forum-shopping and pretty low damages.
Is criminal prosecution available in China for the enforcement of IPRs?
Is the IP rights holder required to present reasonable evidence to support his claims of infringement against the opposing party in criminal prosecution?
Which is the responsible authority in China corresponding to the types of criminal remedies available? Also, mention the imprisonment term and the monetary fine.
A) Responsible Authority - Investigated by the Public Security Bureaus ("PSB"); case can be transferred to the Procuratorate
B) Imprisonment Term - usually not more than 03 years, but in grave cases may extend to 07 years
C) Monetary Fine - Depending on each case. A table attached below gives estimation of damages
Are there any other criminal remedies available in China than the ones mentioned above? If yes, then kindly explain in brief.
What happens if an IP rights holder abuses the enforcement measures in criminal prosecution?
Are there any disadvantages of criminal prosecution in China? If yes, then kindly give 2-3 points?
A) Although the frequency of damage awards in IPR cases in China has increased, the average amount awarded has not increase. It also appears that while damage awards tend to be low, IPR owners typically make low damages claims.
B) In the Chinese courts, damages are frequently computed based upon the infringer’s unjust enrichment. Since infringers usually sell their illegal copies at a small fraction of the price charged by the IPR owner, damage awards based on unjust enrichment are often modest compared to damage awards based on the IP owner’s lost profits from lost sales. Moreover, some infringers do not maintain complete transaction records and the full extent of their gain can be very difficult to determine.
Are there any alternative dispute resolution mechanisms which allow parties to resolve their dispute out of court?
Arbitration and non-governmental mediation has been developed a lot in China in recent years, which provided additional options to resolve IP disputes. However, there are many deficiencies of the current Arbitration Law. It has long been criticized by lawyers and scholars for not fully respecting the autonomy of the parties and limiting the freedom of the parties’ choice, which go against the general rules and tendency of international business arbitration.
Are border control measures (customs) available in China for the enforcement of IPRs?
Is the IP rights holder required to present reasonable evidence to the customs authority/department to support his claims of infringement against the opposing party/importer of counterfeit goods?
What are the remedies available under border control measures (customs) in China?
The infringing goods are destroyed, or de-branded and donated to charity, or purchased by the rights holder, or de-branded and auctioned. The importer/exporter will be fined an amount of approximately 30 % of the declared value of the infringing goods.
Who must bear the costs of customs intervention during enforcement?
The IP rights holder must bear the costs of customs intervention during enforcement.
What happens if an IP rights holder abuses the enforcement measures in Custom Recordal of IPRs?
Which are the best practices for enforcement of IPRs in China?
There are many options to choose from depending on the needs of the enforcer. These include negotiations, administrative actions, customs, civil litigation, take down procedure for online infringements, and criminal sanctions.
Are there any risks involved in the enforcement of IPRs in China? If yes, then kindly give 2-3 points.