Since China promulgated the landmark Outline of the National IP Strategy in 2008, the State Council has issued annual action plans which identify the priorities, objectives and approaches that various departments, state administrations and judiciaries must address, deliver and use in order to execute the country's annual National IP Strategy.
On 9 November 2018 the Office of the Inter-ministerial Joint Meeting for Implementation of the National IP Strategy, which is subordinate to the State Council, promulgated the Action Plan for Furthering the National IP Strategy and IP Rights Powerhouse Initiative 2018.
The action plan offers few new proposals and instead reiterates the major IP initiatives which the government has promoted over the past two years, including:
- institutional and judicial reform;
- a legislative plan; and
- various national enforcement campaigns.
The reorganisation of the newly established China National IP Administration (CNIPA), formerly known as the State IP Office, is at the top of the action plan.
The legislature authorised the CNIPA in March 2018 and a September 2018 regulation clarified the agency's role and shed some light on the reorganisation progress. The agency is believed to be working closely with the State Commission Office for Public Sector Reform – a so-called 'super agency' that decides on the constitution and operations of other government agencies – to finalise various details, including its internal organisational structure and staff size.
Reorganisation will continue within the CNIPA and may include merging the China Trademark Office (CTMO), the Trademark Review and Adjudication Board and the Trademark Examination Cooperation Centre into a unified trademark office under the CNIPA. Similar mergers may take place on the patent side as well.
This possible integration would align China's IP practices with those of most IP offices worldwide, such as the US Patent and Trademark Office and the German Patent Office.
It remains to be seen whether the reorganisation will result in any significant change in personnel or practice in the near future.
The action plan proposes some new and existing judicial reform initiatives. For example, the action plan reiterates the establishment of a state-level IP appellate court. The Supreme People's Court (SPC) recently echoed this proposal by launching a three-year trial-period for its IP Court to hear appeals and retrials of:
- first-instance judgments handed down in highly technical civil IP rights cases, including those involving invention patents, utility models, new plant varieties, integrated circuit layout designs, technical know-how, computer software and monopolies;
- first-instance judgments handed down in highly technical administrative IP cases, including those involving patents, new plant varieties, integrated circuit layout designs, technical know-how, computer software and monopolies; and
- retrials or prosecutorial protests against first-instance judgments or mediation decisions that have come into effect (which the SPC may opt to designate to a lower retrial court).
The approach bypasses the high courts at the provincial level and essentially makes the SPC IP Court China's federal circuit. The plan leaves out civil design patent cases, but does not exclude administrative cases involving such patents.
Jurisdiction over IP criminal cases remains unchanged. Civil and administrative cases involving trademark, copyright and unfair competition matters which are not regarded as highly technical IP cases will follow the previous route of appeal and retrial to the higher courts. Further, if the trial court is a high court (provincial level) or the SPC itself, the SPC will remain the appeal or retrial court.
The action plan proposes to explore the possibility of granting the Beijing IP Court extended jurisdiction over technical suits from Beijing and the neighbouring areas of Tianjin and Hebei.
Notably, after a two-year trial run of the SPC's Opinion on Promotion of the 'Three in One' for the Trial of Civil, Administrative and Criminal Cases Involving Intellectual Property Rights in Courts Nationwide, the SPC is looking to extend this practice to the three IP courts of Beijing, Shanghai and Guangzhou. At present, these courts have jurisdiction over IP rights civil and administrative proceedings. IP rights criminal proceedings are currently decided by the local courts.
The action plan confirms that four more IP rights tribunals will be inaugurated in Xi'an, Zhengzhou and two other undisclosed locations. No further details or concrete timelines have been provided.
The action plan unveils the legislative plan of a number of major IP laws and regulations, including:
- the fourth amendment to the Patent Law;
- the third amendment to the Copyright Law;
- the revision to the Regulations on the Protection of New Varieties of Plants (which was promulgated on 20 March 1997 and entered into force on 1 October 1997); and
- the revision of five supporting departmental rules and regulations pertaining to the newly promulgated Anti-unfair Competition Law, including:
- the Regulations on Prohibiting the Acts of Trade Secret Infringement;
- the Regulations on Prohibiting Unfair Competition Acts in Premium Sales; and
- other regulations prohibiting market confusion and commercial bribery.
On 7 September 2018 the National People's Congress (NPC), China's top legislative body, released its five-year legislation plan, which prioritises legislative objectives and allocates limited resources to cover 69 Class I legislative projects and 47 Class II legislative projects, among others. The Patent Law and the Copyright Law are among the Class I projects that will be overhauled, and they are expected to be submitted for deliberation during the NPC's current term (which ends in March 2023). Despite the CTMO's four-month effort to solicit public opinion on the fourth amendment to the Trademark Law, the NPC's legislation plan is silent in this regard.
The action plan reiterates the proposal to:
- introduce punitive damages to both the Patent Law and the Copyright Law; and
- raise the ceiling of statutory damages for IP infringement.
In addition, the action plan proposes to "research the possibility of applying certain provisions of the Trademark Law in the cases involving granting and affirmation of trademark rights", which could be a positive sign that the good-faith principle, as introduced by Article 7.1 of the law, may be directly cited as a legal ground of action. The action plan also advocates for determining the parameters of bad-faith trademark filing and registration and ascertaining the application of the laws in different scenarios.
The SPC has been tasked with exploring the introduction of discovery procedure and legal devices to address the spoliation of evidence and alleviate litigants' burden of proof by assessing:
- the admissibility of certain evidence that has already been found tenable in another legal proceeding;
- the efficacy and credibility of judicial appraisal in different proceedings; and
- the function of expert witnesses.
The action plan vows to further the implementation of various national enforcement campaigns, including:
- 'Convoy' and 'Thunder', which the CNIPA launched to combat patent counterfeiting and infringement in the e-commerce, food and drug, environmental protection, work safety and high-tech industries;
- 'Sword Net', which the National Copyright Administration launched to combat the unauthorised:
- reprinting of copyrighted content through online news platforms and social networks;
- reproduction, performance and dissemination of copyrighted works through video apps; and
- dissemination or use of others' cartoon images;
- 'Dragon', which the General Administration of Customs launched to tackle IP rights infringement in exports; and
- 'Green Shield', which the State Post Bureau launched to address IP rights infringement in postal and courier services.
The CNIPA will promote joint patent enforcement in the Beijing, Tianjin and Hebei regions, as well as in the Yangtze River Delta and Pearl River Delta areas.
The Supreme People's Procuratorate and the Ministry of Public Security will prioritise their resources in prosecuting or investigating IP rights criminal cases involving:
- prospective fundamental studies;
- leading innovation; and
- disruptive technological innovation.
The General Administration of Customs will promote its portable IP rights customs protection recordal query system and launch an online IP rights customs protection portal.
The CNIPA will continue its efforts to facilitate the trademark registration procedure and expedite examination. While the revised law (2013) provides a nine-month time limit, the plan called to reduce this period to:
- six months in 2018 (in practice, it was reduced to slightly more than five months)
- five months in 2019; and
- four months in 2020.
The action plan envisages that local governments will be encouraged to abandon the recognition and financial incentive associated with 'famous trademarks', a concept that has created significant confusion with 'well-known trademarks', as provided for in the Trademark Law.
For further information on this topic please contact Gang Bai at Wanhuida Peksung by telephone (+86 10 6892 1000) or email ([email protected]). The Wanhuida Peksung? website can be accessed at www.wanhuida.com and www.peksung.com.
An earlier version of this article was first published in the International Trademark Association Bulletin Vol 74, No 1, 15 January 2019.
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