Premier Wen announces new IP enforcement plan

China
For several months the IP community has been speculating as to what would follow the State Council of China's nine-month-long Special IP Enforcement Campaign. On November 9 2011 the State Council held its executive session, following which a variety of IP enforcement measures were announced. Premier Wen Jiabao praised the achievements of the Special Enforcement Campaign, but also acknowledged that the enforcement of IP rights still faced substantial challenges.

The new IP enforcement plan includes the following measures:
  • Continue to strengthen the administrative enforcement of IP rights by focusing on key industries such as food, pharmaceuticals, cosmetics, agriculture, construction, mechanical-electronics and auto parts.
  • Focus on criminal enforcement - police must commence criminal investigations in a timely manner, while the administrative authorities must timely transfer cases to the police for criminal prosecution.
  • Local governments must be fully accountable for the enforcement of IP rights. The results will be taken into account in a leadership performance review. In particular, the State Council pointed out that software legalisation must be completed by the end of June 2012 at the provincial level and by the end of December 2012 at city level.
  • Records of IP infringements will be used to measure the credibility of companies and individual business owners.
  • Encourage the public to provide leads in counterfeiting and piracy cases. The local governments must fully disclose the information related to IP cases. The State Council also called for extended awareness through education.
  • On the legislative side, the State Council called for several interesting reforms:
    • look into the potential amendment of the Criminal Code to lower the criminal prosecution threshold;
    • raise the amount of the fines imposed on infringers and grant punitive damages in cases involving wilful infringements;
    • impose a higher burden of proof on infringers;
    • improve the standards for the examination and authentication of evidence; and
    • improve techniques for the examination of counterfeits.
  • Improve bilateral and multilateral cooperation on IP enforcement matters by following international best practice.
  • Establish an IP enforcement coordination office under the Ministry of Commerce of the People's Republic of China (MOFCOM).
The new IP enforcement plan is based on previous enforcement work, and some of the proposals are a continuation of the current programmes. The government has clearly prioritised those industries or sectors where health and safety are affected by counterfeiting. It is anticipated that the government will continue to focus its enforcement resources on the fight against counterfeit pharmaceuticals.

One of the most significant measures is the proposed research into the amendment of the Criminal Code. China has carried out a series of amendments of the Criminal Code in recent years, and it appears that IP crimes are finally on top of the agenda. Lowering the criminal prosecution threshold and clarifying the standards for prosecuting counterfeiters and pirates will make a substantial difference.

The proposed establishment of an IP enforcement coordination office will be welcome by many companies. The role played by MOFCOM during the Special IP Enforcement Campaign was widely praised by the international community. Many people were hoping that MOFCOM would continue leading and coordinating future enforcement work, and it seems that the State Council has listened.

However, the State Council did not directly respond to demands for increased police resources to fight IP crimes. A better allocation of police resources and the establishment of specialised IP divisions will be vital to improve the enforcement of IP rights.

He Jing, ZY Partners, Beijing

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