WORLD TRADE  
ORGANIZATION  IP/C/W/502 
11 October 2007 
 (07-4367) 
Council for Trade-Related Aspects 
of Intellectual Property Rights Original:   English 
 
 
 
TRANSITIONAL REVIEW MECHANISM OF CHINA  
 
Communication from the United States  
 
 
 By means of a communication from the delegation of the United States, dated 7 October 2007, the Secretariat has received th e following contribution in the context of the 
transitional review mechanism under Secti on 18 of China's Protocol on Accession. 
 
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I. GENERAL 
1. The United States appreciates China's efforts to im prove the transparency of its legislative and 
rule making process.  Please explain how China implem ents its system for "ensuring the participation 
of the people in lawmaking" under the Law on Legisl ation in the intellectual property (IP) context.  
The United States would particularly be interested in  an explanation as to whether China requires that 
the public be formally provided with draft IP-re lated laws and regulati ons for comment, and how 
China takes comments from the public into account be fore it finalizes and implements those laws and 
regulations. 
2. Please provide details about the notice and comme nt periods used by the Legislative Affairs 
Office of the State Council and other Chinese agencies during the past year as they relate to draft IP-
related laws and regulations.   
3. Please explain how China seeks to avoid inconsistencies among the different IP-related 
agencies as to when and from whom they solicit comments, and how they take into account 
comments, when more than one agency is drafting and issuing a particular measure.   
4. Please explain whether the public will have th e opportunity to comment on IP-related laws 
such as the recent draft amendments to the patent and trademark laws.   
II. LEGISLATION 
5. We appreciate that China has provided a summary  of legislative priorities in China's 2007 
Action Strategy on intellectual property rights (IPR)  protection.  Could China provide an update on 
the progress of its legislative initiatives, particularly with regard to reform of patent, trademark and 
copyright measures?  Is China considering any fu rther new IPR measures not mentioned in the Action 
Strategy? IP/C/W/502 
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  III. ENFORCEMENT 
6. With regard to case initiation standards for crim inal IP investigations, are there uniform 
guidelines/procedures applicable to Public Security  Bureaus (PSB) throughout the whole country?  If 
so, please identify them. 
7. We understand that in certain jurisdictions th e PSB and the Procuratorates have adopted case 
initiation standards that allow for a certain latitude  in investigating potential crimes, such as by 
investigating on suspicion or on the basis of stat istical sampling.  One such example is Jiangsu 
province.  Is China considering making these pilot programs more comprehensive?  If so, please explain. 
8. Has there been any further discussion of clarif ying the role of private investigators in 
obtaining evidence to be used in ci vil court proceedings?  We note that  there has been a trial effort in 
Shenzhen to compel exchange of evidentiary material in intellectual property cases and we are 
interested in knowing of further efforts in that area.  
9. Are there any legislative proposals under discussi on that would enhance the power of Chinese 
judges to enforce judicial orders? 
10. The United States appreciates that China has provi ded a summary of enforcement priorities in 
China's 2007 Action Strategy on IPR protection.  Could China provide further information on specific enforcement initiatives that are under way or under development regarding (a) counterfeit products 
that pose health and safety threats, such as fake pharmaceuticals, agricultural chemicals, electronics, 
etc., (b) piracy and counterfeiting on the Intern et, (c) commercial production and sale of pirated 
optical disks, and (d) acts of unfair competition in volving the intentional registration of infringing 
company names and the misuse of such registrations in China? 
11. US customs data shows that China is by far the largest source of counterfeit goods seized at 
US borders.  The United States is pleased to have re ached a bilateral customs agreement with China to 
enhance cooperation in this area.  Could China iden tify any new efforts that it is undertaking to reduce 
the outbound flow of counterfeit goods across China's borders? 
12. On 1 March 2006, China provided the following data on criminal cases in 2005, broken down 
by article of the Criminal Law.  Please fill in the missing information and provide the corresponding 
data for 2006 and, to the extent available, for 2007. 
China 2005 Criminal Enforcement Data  
Article of 
Criminal Law Court 
cases 
initiated Court 
cases 
resolved Persons 
convicted 
or 
acquitted Persons 
receiving 
suspended 
sentences Persons 
receiving 
imprisonment 
less than 5 yr Persons 
receiving 
imprisonment 
more than 5 yr 
213 
(manufacture of 
counterfeit TM goods) 
 221 213 324 * 149 9 
214 
(sale of 
counterfeit TM goods) 
 93 94 124 * 54 3  IP/C/W/502 
 Page 3 
 
 
  Article of 
Criminal Law Court 
cases 
initiated Court 
cases 
resolved Persons 
convicted 
or 
acquitted Persons 
receiving 
suspended 
sentences Persons 
receiving 
imprisonment 
less than 5 yr Persons 
receiving 
imprisonment 
more than 5 yr 
215 
(manufacture of 
counterfeit TM 
labels) 
 134 128 214 * 110 1 
217 
(reproduction 
and distribution of pirated 
copyright 
works)  28 25 29 * 8 1 
218 
(distribution of 
pirated 
copyright works) 
 6 6 8 6 2 0 
219 
(violation of 
trade secrets)  41 38 41 * 28 0 
142-149 
(offenses 
relating to fake and shoddy 
goods) 1117 1121 1942 * 1074 174 
* data to be provided by China  
 
13. On 25 October 2005, in document IP/C/W/461, the United States requested certain 
information regarding specific cases that China h as identified through statistics as reflecting its 
application of criminal, administrative, and civil remedies for IPR infringement in China for the years 
2001 through 2004.  On 22 December 2005, we recei ved a letter from China (IP/C/W/465) concerning 
our request.  On 20 January 2006, in document IP/C/W/461/Add.1, the United States replied to China's letter and indicated that  the United States looked forward to China's full response to our 
request for information.  To date, the United Stat es has received no further response from China.  The 
United States takes this opportunity to reiterate the US request for information contained in document 
IP/C/W461, and requests that China also provide information for the years 2005, 2006 and, to the extent available, for 2007. 
IV. PATENTS 
14. Because the State Intellectual Property Office (SIPO) does not provide for the substantive 
examination of utility model and design patent a pplications, many companies have complained that 
their utility model or designs have been misappropria ted by unscrupulous entities that take the models 
and designs, file for and obtain patent rights, an d then use these rights to bring infringement actions 
against them.  Please explain how the recently issued  administrative rule on the Standardization of 
Patent Applications and other actions undertaken  by SIPO and other relevant IP agencies will 
alleviate these concerns.  IP/C/W/502 
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  15. With regard to Article 48(2) of the draft thir d amendments to the Patent Law of the People's 
Republic of China, what will be the standards used  to determine when the exercise of a patent is 
conduct that "eliminates [or] restricts competition" that would justify the issuance of a compulsory 
license? 
16. Is consideration being given to any changes to the scope of patentability of software 
inventions?  Please explain. 
V. COPYRIGHT 
17. Have there been any court decisions, judicial in terpretations, judicial notices or guidance, law 
enforcement guidance, State Council regulations, ad ministrative rules, including local legislative 
enactments or regulations, or other legal documents interpreting Article  4 of the Copyright Law of the 
People's Republic of China, which was adopted at the 15th Session of the Standing Committee of the 
Seventh National People's Congress on 7 September 1990, a nd amended according to the Decision on 
the Revision of the Copyright Law of the People's Republic of China, adopted at the 24th Session of the Standing Committee of the Ninth National People's Congress on 27 October 2001?  If so, please identify them, and indicate whether China has made translations of them available to WTO Members 
in accordance with China's comm itment in paragraph 334 of the Working Party Report accompanying 
China's Protocol of Accession. 
18. With regard to copyright piracy on the In ternet, please provide a detailed description of: 
(a) the legal steps necessary to expeditiously take down infringing content and/or links 
after receiving proper notice from recogni zed right holders' representatives;  
(b) all remedies available to suspend or te rminate the accounts of repeat infringers and 
the consequences of recidivism;  and  
(c) the remedies available to provide identi fying information about direct infringers to 
right holders or their representatives. 
19. Please provide examples of cases where copyright pi racy on the Internet has been addressed 
using the above-referenced legal procedures, includi ng specific efforts taken to protect foreign right 
holders and the results of those efforts. 
20. With regard to internet piracy, please clarify how, if at all, the criminal 
prosecution/conviction thresholds established in the j udicial interpretations i ssued in 2004 and 2007 
apply to copyright infringements committed or taking place in the Internet environment. 
21. Right holders have noted that recent guidance from the National Copyright Administration of 
China (NCAC) suggests that notices of claimed infr inging material on the Internet be sent in hard 
copy rather than electronic form.  Right holders ar e concerned that this procedure is less timely and 
efficient than electronic notices.  Could China clar ify the acceptability of electronic notices of claimed 
infringement under Chinese law? 
22. Please describe any campaigns currently under wa y or planned to combat textbook piracy on 
university campuses that might augment actions by  NCAC, the General Administration of Press and 
Publication and the Ministry of Education in Shanghai and Wuhan.  Will responsible authorities 
undertake other enforcement efforts timed to coincide  with the start of university terms?  Please 
provide concrete examples of these campaigns and ot her enforcement efforts, including specific steps 
taken to protect foreign right holders against textbook piracy.  IP/C/W/502 
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  23. Please describe what remedies, if any, are availa ble, or will be available, for unauthorized 
internet retransmissions and/or transmissions of coverage of 2008 Summer Olympic events in 
Beijing? 
VI. TRADEMARKS/GEOGRAPHICAL INDICATIONS 
24. The United States notes that China has not yet fully responded to questions posed by the 
United States in connection with last year's trans itional review before this  Council regarding programs 
of SAIC, AQSIQ, and MOFCOM that appear to provide certain benefits to designated Chinese 
trademarks, which are variously termed "famous tr ademarks," "famous brands ," "renowned brands," 
"export brands," etc.  The United States would a ppreciate full responses to these questions, including 
China's position regarding their compliance with  China's TRIPS Agreement national treatment 
obligations. 
25. There have been reports of an increasingly la rge number of abusive trademark applications 
filed by unauthorized entities for other companies'  recognized brands, particularly in the case of well-
known brands and up-and-coming brands.  Please describe the steps the State Administration for Industry and Commerce is taking to address this  issue at the examination and opposition and 
cancellation stages. 
26. The United States appreciates China's response to  question 18 of document IP/C/W/482.  The 
United States would like to clarify that response.  Would a trademark for "gloves" (in group 2510) be cited against an application for the identical trad emark for "scarves" (in group 2511)?  If not, is it 
because "gloves" and "scarves" fall into two separate groups?  Please explain. 
27.  In accordance with China's Trademark Law, a geographical indication (GI) can be protected 
as a certification trademark or collective trademark.   The China Trademark Office (CTMO) therefore 
is the regulatory agency in charge of registration and management of GIs.  However, according to the 
Regulations on the Protection of Geographical Indication Products, issued by the State Administration of Quality Supervision, Inspection and Quarantin e (AQSIQ) effective 15 July 2005, AQSIQ is the 
government agency in charge of GIs, which should examine and confirm the registrations of GIs. 
With regard to this type of situation, Article 87 of the Law on Legislation of the People's Republic of 
China prescribes in relevant parts that:  
If any of the following circumstances occurs concerning a law, administrative 
regulation, local regulation, autonomous regulation, special rule, administrative rule or local rule, the relevant body shall ame nd or repeal it in accordance with the 
authority specified in Article 88 of This Law: ...  
 
(ii)  A law on a lower level contravenes the law on a higher level;   (iii)  Discrepancies exist between different rules concerning a similar  matter, and one of the rules should be amended or w ithdrawn pursuant to a ruling made by the 
relevant body; . . .  
 
As an administrative rule, it would appear th at AQSIQ's Regulations on the Protection of 
Geographical Indication Products conflict with the hi gher level law, the Trademark Law.  When will 
this administrative rule be amended or repealed to  conform with the higher level Trademark Law, or 
will appropriate harmonizing legislation be adopted to  reflect AQSIQ's concerns and interests in this 
area?  
28. What exactly are the GIs that should be register ed?  Is it a certification/collective trademark at 
the CTMO or other distinguishing indication of source at the AQSIQ? What are the differences IP/C/W/502 
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  between these two types of registrations, especially in respect of enforcement, i.e., administrative 
(including Customs) enforcement, civil enforcement and criminal enforcement?  
29. Due to the different administrative manageme nt procedures between the CTMO and AQSIQ, 
there exist conflicting GIs at CTMO and AQSIQ because they were registered by different registrants.  Under the co-existence of China's Trademark La w and the AQSIQ Regulations on the Protection of 
Geographical Indication Products, how can the problem  of conflicting registrants be solved?  Which 
right takes priority and under what circumstance?  
30. Is it necessary for a registered GI (certification trademark or collective trademark) to be 
registered at the AQSIQ?  
31. Is it necessary for a licensed GI (certification trademark or collective trademark) user to 
register the license with the AQSIQ?  
32. Please explain whether national treatment is applied for foreign GI's?  
33. Is there a public database for GIs at the AQSIQ, such as the one that exists for trademarks? 
VII. DATA EXCLUSIVITY 
34. Please advise how China's drug registration regul ation is administered and what are the 
requirements of SFDA for clinical test data  to be afforded data exclusivity.  
35. Please advise the manner in which data exclusiv ity is granted including if there are forms to 
complete, and if there is a record of an admini strative decision where data exclusivity has been 
granted.  Please provide copies of any such forms or approvals.  
36. Please advise of the total number of data excl usivity grants provided by SFDA including the 
numbers of data exclusivity grants provid ed to foreign and domestic companies. 
 
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