III. China Has a Complete Law
Enforcement System for
Intellectual Property Protection

China has formulated comprehensive intellectual property rights laws and regulations. Today, it is earnest and fair in executing these laws, and much has been accomplished in this regard.

These great achievements in the execution of the intellectual property rights protection laws and regulations are above all the product of comprehensive judicature and administration provided for in these same laws and regulations.

1. China's judicial institutions for intellectual property protection.

In China, any citizen, legal person or organization entitled to intellectual property rights whose rights and interests have been infringed may bring a lawsuit to the people's court in accordance with the law and receive practical and effective judicial protection.

The people's courts exercise judicial power independently according to law, are subordinate only to the law itself, and are not subject to interference by any administrative organ, public organization or individual.

Earnest execution of the law is the core of the administration of justice. The judicial activities of a people's court are carried out on the basis of facts, and with the law providing the criterion. Cases are tried strictly in accordance with substantive and procedural laws. Cases are heard in an open court, and a collegial system, a challenge system, a system whereby the court of second instance is the court of last instance, and a trial supervision system are practised. Judicial work, in accordance with the law, is also subject to supervision by people's congresses and people's procuratorates at all levels and by the masses, so as to ensure openness, impartiality, and seriousness.

The establishment and fortification of the judicial organs for trying intellectual property rights cases and the optimization of the judicial system are important guarantees for the people's courts correctly to handle such cases and conscientiously to protect intellectual property rights according to law. In recognition of the specialized nature of intellectual property rights cases and the advanced nature of the technology often involved, the higher people's courts in several provinces and municipalities directly under the central government such as Beijing, Shanghai, Guangdong, Fujian and Hainan have since 1992 established such intellectual property rights courts as their actual needs demand. The intermediate people's courts in all the special economic zones as well as Beijing and Shanghai have also established intellectual property rights courts. Intermediate people's courts in the capital cities of other provinces, municipalities and autonomous regions have set up collegial panels specializing in cases involving intellectual property rights protection. In this manner the hearing of intellectual property rights cases is centralized with the advantageous results that unity in executing the law is ensured, experience in dealing with the law is amassed, and the quality of judicature in intellectual property rights cases is strengthened.

With the implementation of China's law on intellectual property protection and the increasing improvement of the judiciary's protective power, people's courts at various levels in China have accepted and decided a large number of civil disputes concerning intellectual property rights. A total of 3,505 cases concerning intellectual property rights disputes were accepted and handled by people's courts throughout the country from 1986 to the end of 1993, 1,168 of which concerned copyrights, 1,783 patents, and 554 trademark rights. The people's courts in accordance with the law defend the legitimate rights and interests of the foreign and domestic intellectual property rights holders through trying cases concerning intellectual property rights disputes. For example, the inventor of a new "technique for sinking piling using drill holes," brought a suit against the Beijing Subway Foundation Engineering Company to determine ownership of the patent on the invention. After trying the case, the Beijing Higher People's Court held that this invention was not a service invention as described by the Patent Law, so the patent right belonged to the inventor and not to his employer. In another example, Hong Kong's Sendon International Co., Ltd. brought suit against Shenzhen's Huada Electronics Co., Ltd. for trademark infringement. After hearing the case, the Shenzhen Intermediate People's Court ruled that the trademark "SENDON" was registered in China mainland by the plaintiff and should be protected by law. The defendant's use of the trademark "SENDON" on the same commodity sold by the plaintiff under that name constituted infringement on the rights to exclusive use of a registered trademark. The court decided that the defendant should pay the plaintiff 468,314.4 yuan in compensation.

Intellectual property rights are important civil rights. In civil infringement cases, the people's court is empowered to order the infringer to bear civil responsibility for the cessation of the infringement, for the elimination of any negative effects caused by his actions, for offering apologies, and for compensation for any losses in accordance with the law. Furthermore, it is empowered to confiscate the infringer's illegal gains and/ or adjudge the infringer to criminal detention or a fine.

If the infringement of intellectual property rights is so serious that it has disrupted the economic order and constitutes a crime, the infringer's criminal responsibility is investigated and dealt with according to law. When a people's procuratorate institutes prosecution for a criminal act of infringement, if the evidence is sufficient to prove that the defendant has counterfeited another's trademark or patent right and the case is so serious as to constitute a crime, the people's court shall promptly and precisely impose punishment in strict accordance with the law. Between 1992 and 1993, people's courts accepted 743 criminal cases for counterfeiting trademarks, of which 731 have been tried with 566 people being sentenced to fixed terms of imprisonment, criminal detention or other punishments. The People's Court of Zhongshan City in Guangdong Province in separate cases imposed fines on five persons directly responsible for counterfeiting the American Mobil Oil Corporation's trademark "MOBIL," further sentencing the defendants to fixed terms of imprisonment from one year to two and a half years. This amply demonstrates that the people's courts of China are resolute in their stand towards punishing criminals and safeguarding intellectual property rights.

According to China's Administrative Procedure Law, if a citizen, legal person or organization wishes to contest a judgement or order of an administrative department for intellectual property protection in a dispute concerning intellectual property rights and to initiate administrative procedure litigation, the people's court shall try the case and shall, in accordance with the law, make a decision to maintain, rescind, or alter it.

When a people's court tries a case arising from intellectual property rights involving foreign nationals, it acts in accordance with Chinese laws and relevant international conventions to which China is a party, adhering to the principle of equity and reciprocity. In this way, the court provides the solid legal guarantees necessary for expanding international economic, technological and cultural exchange and cooperation. The Shenzhen Intermediate People's Court accepted the American E.F. Houghton Company's suit against the Shenzhen Hailian Chemical Co., Ltd. for the latter's trademark violations. Investigation proved the defendant's infringement and held it responsible. The two parties negotiated a settlement through mediation. The defendant promptly stopped its acts of infringement, offered public apology to the plaintiff, and handed over 130,000 yuan as a compensation for the plaintiff's economic loss. The court, in addition, adjudged the defendant a civil sanction fine. Ten days passed from the court's acceptance of the case to its resolution, expeditious remedy much appreciated by the American plaintiff. In acknowledgement of this, the E. F. Houghton Company presented the court with a silk banner reading: "Chinese law is just; judges try cases expeditiously."

Over the past few years, in an effort to raise the level of the administration of justice, the people's courts have adopted a series of potent measures to improve their quality and efficiency in handling cases. In order to amplify their impact, the people's courts have selected typical cases and tried them publicly, conducting information campaigns through the various public media. Undeniable social effects have been achieved through the use of specific cases in the popularization of legal education and the dignity of the socialist legal system has been maintained.

2. Administrative channels for intellectual property protection in China.

In addition to judicature in accordance with international practices, China's system for the protection of intellectual property rights comprises the Patent Law, the Trademark Law, and the Copyright Law and other administrative channels designated in intellectual property laws, all proceeding from China's actual conditions.

Under the Patent Law, the competent authorities in the State Council and local people's governments have the right to establish patent offices. Today, China has more than 50 patent offices established by local governments and more than 20 patent offices established by various ministries and departments under the State Council. The State Copyright Administration and local copyright administrative organs have been established in accordance with the Copyright Law. Trademark administration calls for unified registration of trademarks by the central government and level-by-level administration by the various local governments. Trademark administrative departments under the administrative bureaus for industry and commerce have been established at the central, provincial, city, prefectural and county levels; below the county level, there are administrative offices for industry and commerce. Today, there are well over 7,000 full-time trademark administration personnel throughout China, in addition to 300,000 part-time personnel.

Chinese intellectual property rights administrative departments exercise their legally stipulated powers and functions to safeguard law and order within the field of intellectual property, encourage fair competition, mediate disputes, settle cases involving violations of intellectual property rights, and protect the interests of the broad masses of the people by maintaining a good social and economic environment.

In China the administrative procedures for solving disputes concerning intellectual property rights are simple and convenient. Cases can be quickly filed for official examination and possible prosecution, investigation follows promptly, and efficiency in handling the case is high. This is advantageous to the owners of the rights. The patent administrative organs in China always treat patent violation claims seriously and deal with them without delay in accordance with the law.

Since the Copyright Law was put into force, local administrative organs responsible for copyright affairs investigated and dealt with more than 150 cases involving pirated books and video products from June 1991 to the end of 1993. They have confiscated and destroyed the pirated goods and levied administrative sanctions on the infringers. In 1994, the Chinese government has organized the departments concerned to launch an assault, investigating and dealing with the illegal duplication of laser discs and illegal reproduction of books. In April 1994 in Guangdong Province, the administrative departments in charge of copyrights, cultural affairs, broadcast, film and video-tapes, the administrative departments for industry and commerce, and public security departments took joint action to deal with the illegal duplication of laser discs. Subsequently, Shanghai, Jiangsu and Hunan also took actions to deal with these problems. These measures dealt a heavy blow to the production and selling of pirated products. Over this same period, relevant departments of the Chinese government took steps to strengthen administration over the establishment of enterprises manufacturing compact discs and supervision over their production in accordance with the law.

The Trademark Law of China has been in effect for more than ten years. During this time, the administrative departments for industry and commerce have dealt with 130,000 cases of trademark violation and counterfeiting, including a number of particularly serious cases, e.g. trademark violations or counterfeited trademarks for "Zhonghua" cigarettes, for "Forever," "Phoenix" and "Flying Pigeon" bicycles, for "Guizhou Maotai" wine, and for "Xingkaihe" ginseng. Effective protection was thus given to the lawful rights and interests of the registered trademark owners.

China's intellectual property rights administrative organs, in accordance with Chinese laws and relevant international treaties to which China is a party, adhering to the principle of equal treatment for nationals and non-nationals and reciprocity, give protection to foreigners' intellectual property rights in accordance with the law. For instance, the Zhejiang Provincial Patent Administration Office recently reached a just settlement in a complaint brought by a foreign plaintiff concerning unlicensed production of a cigarette lighter to which he held patent. The competent authorities ordered the factory concerned to cease all acts of infringement and compensate the foreigner for his losses. The State Copyright Administration investigated and then dealt with a series of cases in which a dozen odd arts and crafts factories in Fujian and Guangdong had manufactured pirated toys copying several foreign companies' toy designs, and a case in which an electronics enterprise in Jiangsu was illegally producing compact discs. Administrative departments for industry and commerce have investigated and dealt with 3,000 cases involving the counterfeiting and other violations of such foreign trademarks as TDK, Toshiba, Sony, IBM, 3M, ESSO, P&G, Head & Shoulders, Xiaotiancai, and Philips.

A large proportion of the cases concerning violations of foreigners' intellectual property rights were investigated and dealt with by China's intellectual property protection administrative offices on their own initiative, acting in accordance with their prescribed functions and powers.

China's administrative departments for industry and commerce have undertaken the responsibility of maintaining economic order and can make market investigations on their own initiative so as to effectively protect the rights of the registered trademark owners. Since 1988, administrative organs for industry and commerce at various levels in Guangdong Province have investigated and dealt with 301 cases concerning the violation of US-owned trademarks. Out of these 301 cases, one third were filed by the American trademark owners, with the remaining cases being the product of market investigations by the administrative organs for industry and commerce or consumer complaints. China's intellectual property rights administrative offices are impartial, and firmly safeguard the lawful rights and interests of those who hold such rights. This has earned them praises from many foreign enterprises and joint ventures. Some of these companies presented the administrative departments for industry and commerce silk banners or gilt boards, bearing words of praise such as "Upright and honest, firm as a rock in administering justice," "Impartiality in enforcing the law, support right, eliminate wrong," "Just settlement, protection of commerce," "Strict and impartial justice, conquerer of fakes and frauds," and "Strict and impartial in executing the law, consummate impartiality." They praised the personnel handling the cases as "conscientious in work and resolute in action," "Such speed in handling a case is seldom encountered anywhere in the world," etc.