Dr.zhipei jiang answering the overseas reporters on China’s judicial protection for IPR on the eve of the World IP Day: 11 questions

1. What is your current role and how have you been involved in Chinese IP law in the past?

Dr Jiang: I’m currently Senior Advisor of Fangda Partners in Beijing as well as Professor of several universities.  What I have been and am involved in Chinese IP law comprise legislation, judicial academic activities and so on. First of all, I took part in the legislation on Copyright Law, Patent Law, Trademark Law, and IP Customs Regulation, as well as judicial interpretations on copyrights, patents, trademarks, new varieties of plants, layout-design of integrated circuits, technology contracts, unfair competition, domain names and IP Crimes. Being a judge of China’s Supreme People’s Court (SPC), I was presiding judge of 3rd Civil Division for around ten years and heard quite a lot IP cases which had significant impact on Chinese IP law development. In addition, I published numerous essays and papers as editor-in-chief, author or co-author, including Intellectual Property Action, Network and Electronics Commercial Law, China’s Legal Protection of Intellectual Property after WTO Entry, Guidance and Reference of Intellectual Property (Volumes 1-8), Judicial Protection of China Intellectual Property and so forth. In order to facilitate transparency of China’s IP judicial protection and provide a platform for ideas exchange, I personally established the China Juridical Protection Website of Intellectual Property in 1999 which can be accessed at www.chinaiprlaw.cn.  It’s one of the earliest legal academic websites in China and the amount of visits has numbered at least around 3 million.

2. How is the Chinese court system organised?  How does China select its IP judges and what experience/qualifications do they need to become judges?

Dr Jiang: According to China’s Constitution Law and Organic Law of the People's Courts, Chinese courts are divided into a four-level court system: (1) At the highest level is the Supreme People's Court located in Beijing, which supervises the administration of justice by all subordinate ‘local’ and ‘special’ people's courts. (2) Local people's courts handle civil, criminal and administrative cases. These courts make up the remaining three levels of the court system and consist of ‘high people's courts’ at the level of the provinces, autonomous regions, and special municipalities; ‘intermediate people's courts’ at the level of prefectures, autonomous prefectures, and municipalities; and ‘basic people's courts’ at the level of autonomous counties, towns, and municipal districts. (3) Courts of Special Jurisdiction (special courts) comprises the Military Court of China (military), Railway Transport Court of China (railroad transportation) and Maritime Court of China (water transportation), and forestry. The court system is paralleled by a hierarchy of prosecuting offices called people's procuratorates, the highest being the Supreme People's Procuratorate (SPP). Hong Kong SAR and Macau SAR which are British-descended common law jurisdiction and Portuguese-descended civil law jurisdiction respectively, have separate judicial systems.

In China, any person who wants to work as a judge including IP judge will need to pass China’s unified State Judicial Exam (SJE) to obtain a Certificate of Legal Profession Qualification. Once law students graduate from university and pass the judicial exam and also pass a civil-service exam organized by China’s central or local governments, they are qualified to enter the judiciary. They don't have to get first working experience as a lawyer or law professor as is more common in the Untied States and Europe. But after recruiting outstanding by the court in such candidates, to accept training of the judge’s college, another 3-5 years after the clerks working practice after checking is possible as assistant judges.  After 2-5 years, or even longer, passing an examination to become a judge. To be IP judges need more special professional training and more practice experience in the IP fields that they can perform.

3. How much experience does the current judiciary have in dealing with IP cases? What can be done to improve this experience?

Dr Jiang: The development of China’s IP protection parallels the introduction of the country’s reform and opening-up policy since the late 1970s and early 1980s. Over the past 30 years, China’s people’s courts provided judicial protection for IPRs through civil, administrative and criminal procedures. From 1985 till 2009 (the official statistics of 2010 is still pending), the courts had altogether concluded 166,408 IP-related civil cases of first instance, 6387 IP-related administrative cases of first instance and 14,509 IP-related criminal cases of first instance. Since 1985, SPC has published 41 judicial interpretations relating IP, 29 of which are currently in force. More than 40 judicial guidelines that helped instruct the lower courts were also issued. Issuance and implementation of judicial interpretations and guidance documents have provided courts with more concrete substantive and procedural bases on which they rely for adjudication of IP-related lawsuits. As a result, the judicial system has continued to see progress. According to statistics dated October 2008, China’s local courts had established a total of 298 separate IP divisions and 84 IP panels in civil divisions, and staffed 2,126 specialised IP judges.

To improve this experience, Chinese courts need to steadily lower the cost to protect IP vigorously, enhance the infringement cost considerably and stop the infringement effectively. The courts shall actively explore and perfect the IP judicial system, realize uniform and high efficient IP judicial protection according with the Outline of the National Intellectual Property Strategy. The practices have proved that establishing a specialized IP tribunal in the people’s court agrees with the Chinese judicial system, and it benefits guarantee of the judgment quality of IP cases, training persons for IP judgment and accumulating judgment experience. Sticking to the said basic method, the courts should continue to explore to establish specialized IP tribunals accepting civil, administrative and criminal cases together, and to integrate and optimize judicial resources. The court may also thoroughly study the feasibility and necessity to establish an IP appellate court to meet the requirement of perfecting the IP appeal procedure, gradually realize the efficient connection between IPRs confirmation and infringement litigation procedures, actively promote the simplification of patent and trademark confirmation and grant, as well as study the transformation of patent invalidation and trademark appeal organizations to quasi judicial organizations.

4. How has Chinese IP law evolved during your career?

Dr Jiang:  During my career, China’s progress in the field of IP law has been remarkable. As mentioned above, China’s IP journey only takes 30 years or so. The last three decades mark a period of continuous development for China's IP protection system, which has grown from scratch. In that time, China has set up a fully-fledged legal framework and operational system for IP protection which is compatible with domestic development needs and consistent with international rules. The Patent Law has been revised three times. Its latest amendment was adopted on 27 December 2008 and entered into force from 1 October 2009. The third revisions of Copyright Law and Trademark Law are also in progress. Moreover, IP-related supplementary laws, regulations and judicial interpretations also underwent major revisions in line with the changed IP laws to facilitate its implementation. Along with continuous perfection of its IP legal framework, China now not only has a sound legal system under which judicial protection and administrative law enforcement work in tandem to remedy IP-related disputes, but also witnesses rapid growth in the application of the laws, experiencing dramatic increases in the number of applications for IPRs. Copyrights, patents and trademarks play an increasingly prominent role in China’s national economic development, and IP awareness throughout the whole society has also been raised considerably. I am very happy that my whole careers have participated in the construction of the IP law and the judicial mechanism.

5. In your opinion, what reform does Chinese IP law require and why?

Dr Jiang: In my opinion, Chinese IP law should bring China closer to international norms of IP protection & enforcement and stimulate further innovation throughout the whole country. And it is also should be closer to the people, in particular, the invention of the ordinary people, and innovation. Let them easier and more fully obtain and protect their intellectual wealth. As China becomes a major player in the world economy, it needs to strengthen its dialogue and exchanges with foreign countries and international organizations, and to cooperate with them by all means in order to accord with other major economic powers in the area of IP protection, particularly in the area of enforcement and damages. Only doing in this way can China continue to make more positive and practical contribution to the development of the international IP system. On the other hand, as Chinese Premier Wen Jiabao said at a press conference following the conclusion of the annual session of the National People's Congress on 14 Mar 2011 that ‘During the next five years, we will make the transformation of the economic development pattern our priority. The Chinese economy should depend on scientific advancement and the improvement of labor quality for future growth. We must make concrete efforts to improve the quality and efficiency of China's economic development.’ IP protection is at the heart of China's endeavor to achieve these goals. There is still a long way to go before China becomes an innovation-oriented nation. The IP system should be further brought into full play to enhance innovation in the whole society, to transform modes of economic development and to increase core national competitiveness.

Here, I must stress that several words. Reasonable IP judicial system is very important in the effectively protection of IP rights. All of these relay on the reform and perfection of IP law.  The Chinese court should actively explore and perfect the IP judicial system, realize uniform and high efficient IP judicial protection according to the Compendium of China National IP Strategy.

The practice proves that establishing specialized IP tribunal in the people’s court agrees with the Chinese judicial system, and it benefits and guarantees the judgment quality of IP cases, training persons for IP judgment and accumulating judgment experience.  Sticking to the said basic method, Chinese courts will continue to explore to establish specialized IP tribunals accepting civil, administrative and criminal cases together, and to integrate and optimize judicial resources. 

6. How well equipped is Chinese IP law to deal with emerging issues such as software patents and non-traditional trademarks?

Dr Jiang: The current Patent Law provides in Article 2 that invention for purposes of Patent Law means any new technical solution relating to a product, a process or improvement thereof. According to Article 25(2), rules and methods for mental activities are not patentable subject matter. Both Articles 2 and 25 underpin the legal basis for determining whether computer software-implemented inventions can be patented in China. Therefore computer software is generally considered to constitute rules and methods of mental activities and cannot be protected by Patent Law. However, as there is no definition of what constitutes a ‘technical solution’, in practice the technical requirement standard has been loosened and patent examiners have some leeway in dealing with that. According to the Guidelines for Patent Examination published by State Intellectual Property Office of China (SIPO), a software-related invention is patentable if it resolves a technical problem, uses a technical measure, and reaches a technical result. But unlike rulings in the U.S. and Europe, claims to media containing computer software (e.g. a storage medium only defined by a program recorded on it) are not allowed in China.

As for non-traditional trademarks, they are not registrable under the current Trademark Law as its Article 8 provides that ‘any visual sign capable of distinguishing the goods or services of one natural person, legal person or any other organization from those of others, including words, devices, letters or numerals, three-dimensional symbols, combinations of colours or any combination of the above elements may be applied for the registration of a trademark’. But the ongoing third revision of Trademark Law proposes some changes to modernise and harmonise China’s trademark system with other advanced systems around the world which will allow IP owners to apply to register non-conventional trademarks such as colors, moving images, holograms, sounds, scents, tastes etc. Apparently those changes will be an extraordinary welfare to trademark owners competing in the Chinese and world marketplaces.

7. Under what circumstances can a civil infringement case become a criminal one?

Dr Jiang: Criminal IP Protection in China is primarily governed by the Criminal Law and the Criminal Procedure Law which are supplemented by a number of judicial interpretations and ministry rules. Under the current legal system, not all IP infringements automatically constitute criminal offences. The Criminal Law stipulates an exclusive list of specific IP infringements in its Section 7 (Crimes of Infringing on Intellectual Property Rights) of Chapter 3. The listed IP crimes include: (1) Using an identical trademark on the same merchandise without permission (Article 213); (2) Knowingly selling merchandise under a faked trademark (Article 214); (3)  Forging or manufacturing without authority or selling or manufacturing without authority other's registered trademarks or identifications (Article 215); (4) Counterfeits other people's patents (Article 216); (5)  Copyright infringement (Article 217); (6) Knowingly sells the duplicate works described in Article 217 (Article 218);(7) Encroaches upon commercial secrets (Article219).

According to the mentioned provisions, criminal liability can only arise for the infringer in case of serious infringements. The Interpretation by SPC and SPP on Several Issues of Concrete Application of Laws in Handling Criminal Cases of Infringing Intellectual Property 2004 clarify the thresholds for conviction and sentencing, and interpret ambiguous terminologies in the legislation.

In addition, certain IP laws also make reference to the Criminal Law with a stipulation that when an infringement ‘constitutes a crime, criminal responsibility shall be investigated and dealt with in accordance with the law.’ e.g. Art.54, 59 & 62 of Trademark Law, Art.63, 71& 74 of Patent law, Art.48 of Copyright Law, Art.24 of Regulations on Computer Software Protection, etc.

8. In your experience, what type of infringement case has proved more effective at preventing IP infringement, and why?

Dr Jiang: In general speaking, IPRs holders may have three options to protect their rights by Chinese courts: civil, criminal and administrative procedures. Civil and criminal cases are more concerning infringement cases; administrative cases are more focused on disputes over patent and trademark invalid and judicial review. Which channel is effective for IP owner? It’s depending on the case and hard to say which way is best, I think.

In my experience, civil processes appear to be more effective in stopping IP infringements and compensation. There are three reasons to explain that.

Firstly, judges of civil cases are more familiar with IP knowledge than that of criminal procedures. In China, civil cases are heard by specialized IP tribunals, with an Intermediate People's Court typically serving as the ‘court of first instance’ IP tribunals exist in both Intermediate People's Courts and Higher People's Courts. However, IP criminal cases are heard first by Criminal Tribunals in the court with jurisdiction over the location of criminal offences; courts at the sub-provincial level typically serve as the court of first instance. Therefore, judges of civil cases are better in terms of IP-related experience and expertise.

Secondly, IPR owners may get more compensation for their loss caused by infringement. In civil processes, IPRs holders have opportunities to claim economic damages for the loss of market share and for lost income caused by infringements. By contrast, administrative and criminal cases only provide opportunities to impose administrative penalties or criminal punishment on infringers in addition to fines. As a result monetary compensation awarded by civil cases is broadly more.

Finally, procedures of civil cases are simple in comparison with administrative and criminal ones. Since civil cases are initiated by IPRs holders themselves, they may file lawsuits against infringing at earliest time. Comparatively, initials of criminal cases are more difficult not only because they are generally initiated by prosecutors after an initial Public Security Bureau (PSB) investigation, but also there exists a minimum value threshold for infringing to be eligible for a criminal case. And the administrative penalties etc. may be facing the complex procedures of judicial review. In addition, IPRs owners are more easily in civil processes to present evidence to the presiding judge and respond to queries allowing them to better explain and clearer illustrate complicated IP-related issues.

9. What can the judiciary do to enforce its judgements?

Dr Jiang: China’s courts have been taking effective measures under the Civil Procedure Law to enforce their decisions including IP-related ones. There is a strong desire to enforce a judgement on behalf of IPRs holders, though there are a few cases where enforcement may not be satisfactory. In addition, SPC has formed a national network last year with 19 central organizations to ensure that court decisions are enforced in a timely manner. While announced the establishment of the network, SPC also released a document entitled Opinions Pertaining to Issues in Building and Improving Linked Enforcement Mechanism.

The 25-article document says the network covers organizations such as:

- The SPC and the SPP.

-The Communist Party of China (CPC) Central Commission for Discipline Inspection, the CPC Central Committee's Organization Department, Publicity Department and the Political and Legal Affairs Commission.

-National Development and Reform Commission, the Ministries of Public Security, Supervision, Justice, Civil Affairs, Land and Resources, as well as Housing and Urban-Rural Development and the People's Bank of China.

-The State Administration of Taxation and the State Administration for Industry and Commerce.

-The regulatory commissions for banking and securities.

The above organizations will actively assist courts in enforcing their decisions, which had previously not always been done in a timely manner thus causing public complaints. And those who hinder or intervene in the enforcement of court decisions would be subject to investigation. The assistance provided by relevant departments, such as local law-making and political advisory bodies, will be considered in assessing local governments' performance with regard to their ‘comprehensive management of social security’.

The document also specifies duties of real estate, tax, land and resources and banking regulatory bureaus, among others, in enforcing court decisions, which is partly aimed to stop people from hiding property to avoid paying compensation or engaging in luxury consumption.

10. How well equipped is the judiciary to deal with piracy and counterfeiting?

Dr Jiang: Since the implementation of China’s first criminal law, courts were able to offer protection against criminal violations of registered trademark rights under the law. The current Criminal Law further enhances judicial powers in criminal protection against violation of the various IPRs, including the imposition of severe punishment against serious IP violations, such as counterfeiting and piracy. Following the Interpretation on Several Issues of Concrete Application of Laws in Handling Criminal Cases of Infringing Intellectual Property jointly issued by the SPC and SPP in 2004, the number of IP-related criminal cases admitted and decided by the courts increased substantially; between 1997 and 2009, 14,509 IP-related criminal cases of first instance were decided by the courts. 

A few months ago, the SPC, SPP and the Ministry of Pubic Security jointly promulgated the Opinions on Certain Issues Concerning Application of Laws for Handling Criminal Cases of Infringement of Intellectual Property Rights (hereafter Opinions) which went into effect on 10 January 2011. The Opinions consist of 16 articles, setting out provisions for the jurisdiction of criminal cases of IP infringements, the efficiency of administrative and law-enforcement departments in collecting and utilising relative evidences, sampling inspection, evidence verification, and the determination of constitutive elements of crimes.

The Opinions also set out specific and workable provisions for dealing with the increasing number of crimes of IP infringement on information networks. The promulgation of the Opinions is of great importance to fully bringing into play the leading role of the judicial protection of intellectual property rights, raising the standards of the judicial protection of IPRs against crimes, and maintaining a fair and orderly market environment.

11. In your opinion, how serious is piracy and counterfeiting in China, and what is causing this problem?

Dr Jiang:  On the current situation of piracy and counterfeiting in China, we frankly admitted that the crime of IP infringement is quite serious and rampant in certain areas and sectors, especially looking at the aggregates. However, measures showing China is the leading violator do not take into account China's size. When figures are adjusted for population, China's rates of IP violation are much lower than those of many other countries, including the U.S.

When talking about reasons behind IP infringement, they are generally attributed to Chinese traditional culture, economic system, legal environment, even nationalist sentiments of the Chinese populace. These points are making situation too complex. IP piracy and counterfeiting, I think, is primarily a development issue. China's piracy problem has nothing to do with morality or even xenophobic but is purely a matter of poverty. Piracy was similarly rampant in other Asian regions such as Korea, Japan until people there got richer and domestic needs emerged to encourage their governments to take action to protect IP. With Chinese nationals getting wealthier, the situation will get better in the near future. Actually, the Chinese government never stops to realize that. In late 2010, the government launched a new national campaign to crack down on IP violations and on the production and distribution of fake and shoddy products which lasts for half a year or much longer. In particular, the campaign targets pirated publications, software products, DVDs, designs and other products as well as violations of registered trademarks and patents, both at the production and distribution levels. It also enhance China's scrutiny over the import and export of fake goods and mete out stern punishment to businesses involved in the import and export of such goods. Moreover, the campaign is also focused on decreasing IP violations online, targeting Internet piracy and the sale of pirated and fake goods over the Internet. Regularly enforcement of the IP law and the special national campaign are combined each other working continuously and the situation will be changed in the next five years, I think.