China's Intellectual Property Protection in 2006

The year 2006 has seen unprecedented rise in importance of Intellectual Property (IP) in various tasks of the Chinese government and the remarkable progress China achieved in IP protection. The three kinds of patent applications received by the State Intellectual Property Office (SIPO) amounted to over 570,000, and the trademark registration applications received by Trademark Office (TMO) under the State Administration for Industry and Commerce (SAIC) totaled over 990,000. Significant results were also scored in copyright protection. The customs offices, public security authorities and the cultural administrations made remarkable achievements in combating IP infringement. New progress was made in the protection of new varieties of plants. Judicial protection of intellectual property maintained its momentum of constant improvement. International exchanges and cooperation in the IP field had higher level of engagement.

Unprecedented Rise in Importance of the Role of IP

President Hu Jintao, Secretary General of the Central Committee of the Communist Party of China (CPC), made an important speech on strengthening IP institutional building in the country and attaching importance to IP-related work during the 31 st Group Study of the Political Bureau of the CPC Central Committee on May 26, 2006. He pointed out, “we should fully leverage the important role that IP can play in increasing our economic and technological strengths and international competitiveness as well as in safeguarding our national interests and economic security so as to support the emergence of China as an innovation-driven country.”

In 2006 the formulation of China 's National IP Strategy has achieved important preliminary success, with the completion of 20 thematic researches. Significant progress has also been made in research and formulation of the Outlines for the National IP Strategy by initially putting forward proposals on the strategy's goal, priority and measures. Vice Premier Wu Yi presided over the second plenary session of the Leading Working Group for National IP Strategy Formulation and made a keynote speech.

Dramatic Growth in Patent Applications and Patents Granted, and Remarkable Progress in Patent-related Work

The year of 2006 has witnessed the improvement of patent related legislation. In July 2006, the amended version of the Patent Examination Guidelines came into effect, marking a new stage of development for China 's patent examination. In December 2006, the Draft Amendments of the Patent Law of the People's Republic of China (for adoption) was finalized, which was the third revision of the Patent Law after the first two respectively in 1992 and 2000.

Three kinds of patent applications maintained the momentum of dramatic increase in 2006. The SIPO received a total of 573,000 patent applications, an increase of 20.3 percent from the previous year. Of these applications, invention patent applications accounted for 210,000, an increase of 21.4 percent over the previous year; among which 58.1 percent of inventions applications were filed by domestic applicants and 41.9 percent by overseas applicants. In 2006, the SIPO granted a total of 268,000 patents, an increase of 25.2 percent from the previous year. Of these granted patents, 83.5 percent were granted to domestic applicants whereas 16.5 percent were granted to overseas applicants. In 2006, various courts in China accepted 3196 cases of patent disputes, of which 70 percent were disputes over patent infringement. In this year 3227 cases were tried and concluded. Local patent administrations in China accepted 1270 cases of patent disputes and concluded 973 cases during the same period.

Large Growth in Trademark Applications and Enhanced Trademark Protection

In 2006, the number of trademark applications continued to increase sharply in China , with the applications for all categories of trademarks totaling 996,000, an increase of 18.9 percent from the previous year. Among them, trademark registration applications accounted for 766,000, an increase of 15.4 percent from the previous year. It was the third year that the annual growth in applications exceeded 100,000 following 2002 and 2004. The number of trademark registration applications in China ranked the first in the world for the fifth consecutive year. In this year 313,000 trademark registration applications were examined.

In 2006, the State Administration for Industry and Commerce (SAIC) conducted intensive market regulation actions, with a focus on those wholesale and retail markets that attracted great domestic and international attention. The SAIC enhanced its supervision over the wholesale and retail markets in Beijing , Shanghai , Guangdong and Zhejiang , and investigated, punished or de-licensed many illegal business operations. The administrations for industry and commerce at various levels across the country investigated and concluded a batch of serious cases that had extensive negative impacts.

Statistics show that 50,534 trademark violation cases were investigated and handled in 2006, an increase of 2.27 percent over the previous year. Confiscated and destroyed illegal trademarks amounted to 30.36 million pieces (sets), with a fine of 398 million yuan imposed; 252 trademark criminal cases along with 263 suspects were transferred to the public security authorities, an increase of 6.78 percent and 22.33 percent from the previous year respectively.

Improved Mechanism of Administrative Law Enforcement and Effective Copyright Protection

In 2006, China 's copyright administrative authorities at all levels enhanced their communication and cooperation by establishing the working mechanisms of cross-region case transferals, information sharing and joint investigation.

The State Council promulgated the Regulations on the Protection of the Right of Communication through Information Network on May 18 th . On June 1 st , the National Copyright Administration of China (NCAC) issued the Notice on Launching the Crackdown on Illegal Pre-installation of Computer Software, initiating a three-month long campaign to crack down upon illegal pre-installation of computer software, with a focus on regulating and rectifying 60 large-scale computer markets in 20 major cities. The NCAC issued the Notice on Cracking Down on Infringement and Piracy via Internet, focusing on fight against illegal businesses that profited from provision of movies, music, software and textbooks for downloading via the Internet.

In 2006, 10,559 cases were received, and 10,344 of them, or 98 percent, were concluded by copyright administrative authorities at all levels across the country. Of all the concluded cases, 8,524 were concluded with administrative punishment, 1,585 were concluded with mediation arrangement, and 235 were transferred to judicial authorities. In this year, over 73 million pieces of various pirated products were confiscated, including over 18 million books, 1.1 million periodicals, 48 million audio-visual products, 2.01 million electronic publications, 3.79 million software discs and 240 thousand miscellaneous products.

Amplified Legal System and Continued Enhancement of Customs Protection

In 2006, China 's customs offices further reinforced the IP protection. The General Administration of Customs of PRC (GACC) promulgated the Announcement on General Guarantee System Relating to Customs Protection of Intellectual Property on May 30, 2006, in an effort to facilitate application by IP right holders for customs protection. The Ministry of Public Security and the GACC jointly issued the Interim Regulation on Enhancing the Coordination in IP Enforcement on March 24 with a view to tightening crackdown on IP infringement.

In 2006, customs offices across the country investigated and handled a total of 2,473 IP infringement cases at the process of import and export, involving nearly 200 million items of infringement goods with a worth of over 200 million yuan. The GACC launched the “Special Action on Cracking Down on IP Infringement via Express Mail Channels” in August and the “Special Action on Customs IP Enforcement in the Yangtze Delta” in September.

Nearly 2,000 IP right records were newly added to the GACC's IP right record database in 2006 alone, an increase of nearly 50 percent from the previous year. By the end of 2006, all valid records numbered 9,917.

Rigorous Crackdown on Infringement and Piracy to Create Orderly Audio-Visual Markets

In 2006, the Ministry of Culture (MOC) focused on reinforcing the supervision and regulation of audio-visual markets and protection of IP, with a view to pushing forward other aspects of its work. Cultural administrative authorities throughout the country adopted effective measures to crack down on illegal audio-visual sales and restored order to the audio-visual markets. These cultural administrative authorities dispatched 5.03 million enforcement officers/times, inspected over 1.02 million audio-visual sales outlets/times and confiscated around 110 million copies (discs) of pirated audio-visual products in this year, greatly improving the order of the audio-visual markets.

The MOC carried out the nationwide “Concentrated Law Enforcement Quarter” campaign and “100-Day Anti-Piracy Campaign” targeted towards cultural products markets from July to October of 2006. During these campaigns, the MOC dispatched 26 Inspection Teams to conduct overt and covert investigations and on-site inspections in 66 cities in 24 provinces, autonomous regions or municipalities under the direct jurisdiction of the central government. They inspected over 1,900 cultural products sales and service outlets such as audio-visual stores and internet bars, and supervised the handling of a number of serious or high profile cases. On December 8, under the centralized deployment of the MOC, all cities above the prefecture level launched a unified campaign to destroy illegal audio-visual products, during which 37.58 million copies (disks) of such products were destroyed.

100 -Day Anti-piracy Campaign Proven Effective

In 2006, public security authorities across China launched the “100-Day Anti-piracy Campaign” to crack down on infringement and piracy and to protect IP. During the Campaign, around 105,000 publication markets and sales outlets/times were inspected, over 28.316 million copies of pirated audio-visual products, pirated computer software and other illegal publications were confiscated, and more than 2,300 infringement or piracy cases were investigated and concluded. In 2006, 14 illegal CD production lines were confiscated.

In order to intensify the fight against infringement and piracy and to improve the interagency efforts between administrative enforcement and criminal law enforcement, the Ministry of Public Security worked with the NCAC to promulgate the Interim Measures on Enhancing the Transference and Cooperation in Crackdown on Copyright Violations and Crimes on March 26, 2006, which further defined the working mechanism of two-way transference of cases and meetings for seeking major case clues.

Enhanced Regulation System and International Cooperation and Better Protection of New Plant Varieties

The protection of agricultural new plant varieties has made headways. In 2006, the Ministry of Agriculture (MOA) received 883 applications for variety right, including 35 foreign applications, and granted altogether 201 variety rights. The applicants came from 30 provinces, autonomous regions and municipalities under the direct jurisdiction of the central government in China as well as 10 foreign countries such as the Netherlands , the USA , South Korea , Japan and Germany .

In 2006, the MOA promulgated the Draft Amendments of the Implementing Rules of the Regulation on New Plant Variety Protection, providing a regulatory system for a more standardized process of examination, test and granting of variety right and for balancing the interests of all stakeholders.

Intensified Judicial Protection and Punishments Inflicted on Infringement

The People's Courts at different levels across the country continued to strengthen judicial protection of IP. In 2006, local courts in China accepted 14,219 IP-related civil lawsuits of first instance and concluded 14,056 of them, an increase of 5.92 percent and 4.95 percent over the previous year respectively. The courts accepted 2,686 IP-related civil lawsuits of second instance and concluded 2,652 of them, a drop of 13.74 percent and 12.07 percent over the previous year respectively. They also accepted 42 new re-trial cases, 3 cases less than the previous year, and concluded all 42 cases.

In terms of lawsuits offending the criminal law, local courts in China tried and concluded 2,277 criminal cases involving IP infringement in 2006, in which verdicts on 3,508 suspects resulted in legal effect and 3,507 offenders were sentenced guilty.

By the end of 2006, 62 intermediate people's courts were conferred with jurisdiction over patent lawsuits, 38 over plant variety lawsuits and 43 over layout design of integrated circuits lawsuits, while 17 primary courts were conferred jurisdiction over civil IP cases.

Expanded Level and Scale of International Cooperation

In February 2006, Tian Lipu, the SIPO Commissioner had his first official meeting with Director of the United States Patent and Trademark Office (USPTO) in Washington, where they signed the Work Plan for Strategic Cooperation and formally established the regular meetings mechanism between the two heads. Commissioner Tian, as one member of the Chinese delegation led by Vice Premier Wu Yi, attended in April the 17th meeting of the Sino-US Economic and Trade Joint Committee. In September 2006, Commissioner Tian accompanied Premier Wen Jiabao to visit Germany where he attended the celebration of the 25th Anniversary of Sino-German IP Cooperation and signed the 2007 agreed minutes on bilateral cooperation with President Schade of the German Patent and Trademark Office. In December 2006, Commissioner TIAN and Professor Pompidou, President of the European Patent Office (EPO), held the 17th EPO-SIPO Joint Committee Meeting in Munich , which was conducive to further enhancing their cooperation. On December 4th , 2006, the 6th Heads-of-Offices Policy Dialogue between SIPO, Japan Patent Office (JPO) and Korean Intellectual Property Office (KIPO) was convened in Beijing, during which the mid-term goals for their cooperation was decided and a meeting memo was signed.

In 2006, international exchanges and cooperation in the field of trademark was further intensified. In March 2006, Hou Liye, Deputy Director General of the Trademark Office (TMO) under the SAIC headed the Chinese government delegation to attend in Singapore the Diplomatic Conference for the Adoption of a Revised Trademark Law Treaty (TLT) convened by the World Intellectual Property Organization (WIPO). She was selected as the vice chair of the conference and member of the steering committee, and singed on the final version of the Singapore Treaty on the Law of Trademarks. In September 2006, Li Dongsheng, Vice Minister of the SAIC attended the 42 nd Series of Meetings of the Assemblies of the Member States of WIPO. In November 2006, An Qinghu, Director General of the TMO, attended the 16 th Session of the WIPO Standing Committee on the Law of Trademarks, Industrial Designs and Geographical Indications (SCT) in Geneva , Switzerland .

In 2006, international exchanges and cooperation in the copyright field maintained its growing momentum. In May, the NCAC and the Asia/Pacific Cultural Center for UNESCO jointly sponsored the “National Seminar on Copyright in the Digital Environment”. Chinese and foreign experts respectively from the UNESCO, the WIPO, etc gathered to present their views on IP protection in the high-tech environment. In September, the NCAC and the WIPO jointly hosted the “2006 International Copyright Forum on the Development and Innovation of Copyright-related Industries”. Present at this Forum were delegates from the WIPO, the Walt Disney Company (US), Motion Picture Association of America, Business Software Alliance and famous domestic businesses to give valuable suggestions to the development of the copyright-related industry in China .