WORLD TRADE  
ORGANIZATION  IP/C/W/482 
6 October 2006 
 
 (06-4808) 
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 5 October 2006, the Secretariat has received the 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 ISSUES 
 
1. China's 2006 Action Plan on IPR Protection describes China's plans to draft certain new 
judicial interpretations related to intellectual pr operty rights (IPR), and to improve certain existing 
interpretations.  Please provide an update on the draf ting of any new or revised judicial interpretations 
related to IPR, including the criminal judici al interpretation issued in November 2004. 
2. Please provide data for the first six months of 2006 on IPR criminal cases initiated involving 
foreign right holders.  Please indicate (a) when the crim inal complaint was filed, (b) with which court, 
(c) the identities of the defendants, (d) the provisions of law alleged to have been violated, (e) current 
disposition, (f) if concluded, whether the case resulte d in acquittal or conviction, and (g) if it resulted 
in conviction, the sentence 
3. Please provide the number of administrative cases in trademark, copyright and IP-related 
customs matters that were undertaken  on an ex officio basis in 2005, as well as in the first six months 
of 2006.  Please also provide the number of such cases that were undertaken in those time periods on 
the basis of a right holder's complaint.   
4. In 2006, China introduced a number of measures aimed at improving the process of referring 
administrative cases of intellectual property infringeme nt to criminal authorities.  Please provide data 
for the first six months of 2006 on the numbers  and percentages of cases referred from trademark, 
copyright and IP-related customs administrative en forcement to criminal enforcement through the 
revised transfer mechanisms developed by the Supreme People's Court, Supreme People's 
Procuratorate, Ministry of Public Security (MPS), and General Administration of Customs.  Please indicate (a) when the case was tr ansferred, (b) within which locality, (c) the identities of the 
defendants, (d) the provisions of law alleged to ha ve been violated, (e) current disposition, (f) if 
concluded, whether the case resulte d in acquittal or conviction, and (g ) if it resulted in conviction, the 
sentence.  
5. The State Administration for Industry and Co mmerce (SAIC) regulates and provides licences 
to companies offering content on the Internet.  Th e United States understands that licences issued by 
the SAIC provide that, if the licensed entity is o ffering illegal content on the Internet, a complaint IP/C/W/482 
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  should be filed with the appropriate local Admi nistration for Industry and Commerce (AIC).  The 
United States would like to unde rstand better the process by which right holders can challenge the 
offering of counterfeit/pirated products on  Internet sites in the .cn domain. 
(a) What actions do the SAIC/AICs and local Copyright Bureaus currently take with 
respect to illegal content on a website in the .cn domain − whether counterfeit or 
pirated goods or other illegal content?   
(b) For example, can and does the SAIC revoke business licences of companies offering 
illegal content?  Please provide data on the number of websites shut down and 
business licences revoked due to discovery by Chinese authorities of illegal content.  How many of these cases have been referred for criminal prosecution in the first six 
months of 2006?  
(c) What other remedies or steps can a right holder use to challenge the advertising of 
counterfeit products on a website in the .cn domain?   
(d) What other remedies or steps can a right holder use to challenge the advertising of 
pirated products on a website in the .cn domain?   
II. ENFORCEMENT 
 
6. With regard to the procedures regarding destru ction of goods and materials used in producing 
counterfeit, pirated and other in fringing goods pursuant to civil, criminal or administrative 
enforcement, for patent, trademark and copyright  infringement, the United States has the following 
questions: 
(a) Are the goods or materials that are seized or  confiscated those that are "principally" 
used, or "exclusively" used, for produc ing counterfeit or pirated goods?  Or, does 
another standard apply? 
(b) Are such goods or materials thereafter destroyed or auctioned off?  How is their 
re-introduction into channels of commerce restricted , if at all? 
(c) Please provide relevant statistical inform ation on the destru ction of goods and 
materials used to produce infringing goods in civil, criminal and administrative cases 
in 2005 and the first six months of 2006.   
7. Please describe the procedures for obtaining a preliminary injunction, especially procedures 
to "establish" a case (li-an) before the request  for a preliminary injunction is considered. 
8. For cases involving alleged infringement of inte llectual property rights, please provide data 
for 2005 and the first six months of 2006 on pre liminary injunction requests, ex parte preliminary 
injunction requests, and evidence preservation order requ ests, together with the rate of grant or denial 
of such requests.   
9. Please provide data on the results of the Blue Sky Campaign to combat infringing goods from 
being displayed and sold in trade fairs, includi ng numbers of resulting administrative and criminal 
cases, and the following case details:  (a) when the case was filed, (b) with which court or agency, 
(c) the identities of the defendants, (d) the provisions of law alleged to have been violated, (e) current 
disposition, (f) if concluded, the result in  the case, and (g) the penalties imposed.    IP/C/W/482 
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  10. Please provide data on the results to date of  the Mountain Eagle 2 Campaign, particularly 
with regard to cracking down on Internet sales, including numbers of resulting administrative and criminal cases, and the following case details:  (a) when the case was filed, (b) with which court or 
agency, (c) the identities of the defendants, (d) the provisions of law alleged to have been violated, 
(e) current disposition, (f) if concluded, the r esult in the case, and (g) the penalties imposed.   
11. Please provide data on the results to date of Chin a's campaigns against copyright piracy on the 
Internet, including numbers of resulting administrative and criminal cases, and the following case details:  (a) when the case was filed, (b) with which court or agency, (c) the identities of the 
defendants, (d) the provisions of law alleged to ha ve been violated, (e) current disposition, (f) if 
concluded, the result in the case, and (g) the penalties imposed.   
12. Please provide an update on data collected to date by the 50 new IPR Complaint Centers 
established as part of the 2006 IPR Action Plan.  Have any of the complaints received by these Centers resulted in arrests or criminal prosecution? 
13. Please describe any campaigns currently under wa y or planned to combat textbook piracy on 
university campuses that might augment NCAC succes sful actions in Shangh ai and Wuhan.  Will 
responsible authorities undertake enforcement efforts timed to coincide with the start of university 
terms? 
14. How many localities in China have, to date, in itiated "trademark authorization systems" as 
Beijing did to intensify efforts to rid consumer markets of infringing goods and punish violators? 
III. COPYRIGHT  
 15. For each provision of law under which criminal copyright infringement may be prosecuted, 
please provide information on the number of prosecuti ons that have been initiated in the first six 
months of 2006.  Please indicate (a) when the criminal complaint was filed, (b) with which court, (c) the identities of the defendants, (d) the provisions of law alleged to have been violated, (e) current 
disposition, (f) if concluded, whether the case resulte d in acquittal or conviction, and (g) if it resulted 
in conviction, the sentence.  
16. Article 225 of the Criminal Law concerns  illegal business operations.  Please provide 
information on the number of prosecutions under Artic le 225 initiated in 2005 and the first six months 
of 2006 in which the underlyi ng offence by the illegal business operation involved copyright 
infringement.  Please indicate (a) when the criminal complaint was filed, (b) with which court, (c) the 
identities of the defendants, (d) the provisions of Artic le 225 alleged to have been violated, (e) current 
disposition, (f) if concluded, whether the case resulte d in acquittal or conviction, and (g) if it resulted 
in conviction, the sentence.  
17. Please provide us with the results of the "Number 2 Sunshine Ac tion to Improve the 
Operation of Audio and Video Markets" that ran from 1 July to 30 August, and the "100-day 
Anti-Piracy Activity" campaign that ran from 15 July through the end of October 2006.  What steps 
will China take to maintain enforcem ent efforts after these campaigns end? 
IV. TRADEMARKS AND GEOGRAPHICAL INDICATIONS 
 
18. The United States appreciates the continuing efforts of the China Trademark Office to 
maximize use of its limited resources and pers onnel to improve examination and pendency of 
applications and opposition proceed ings.  The United States also applauds the China Trademark 
Office's efforts to increase transparency through circ ulating its draft trademark examination guidelines 
and its proposed amendments to China's Tradem ark Law and soliciting feedback and encourages IP/C/W/482 
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  China to continue these efforts to seek input from brand owners and other st akeholders in improving 
China's protection and enforcement of trademark rights.   
(a) What kind of information is a trademark applicant required to provide in an 
application regarding its goods and/or servi ces?  Is the applicant required to provide 
its own specific description of the goods and/ or services with which the mark is to be 
used?   
(b) What classification system(s) does the China Trademark Office use for trademark 
applications?  We understand that the Chin a Trademark Office uses two systems of 
classification, including a further classification system of "sub-groups".  What role, if any, does each of these classification system s play in examining an application for 
likelihood of confusion with registered  marks and prior pending applications?
  Please 
explain where these classification sy stems are publicly accessible.   
(c) How does the China Trademark Office exam ine an application for likelihood of 
confusion against registered marks and pr ior pending applications in other classes 
and/or sub-groups?  For example, please e xplain how the application would be treated 
in the following situation:  An applicati on for "gloves" is filed in Class 25.  How 
would it be evaluated against a registered mark or prior pending application, owned 
by another party, for "scarves" in Class 25?  
19. The Trademark Law and the implementing regul ations issued in 2001 and 2002 tripled the 
amount of damages that could be awarded for trademark infringement, but removed the minimum 
amount of damages that could be awarded.  As  a result, the overall level of fines imposed on 
counterfeiters has dropped in the last few years.  In order to ensure that the administrative 
enforcement system functions well, it is critical that penalties sufficient to provide a deterrent to future infringements are imposed.   
(a) Why was the minimum removed?   
(b) What steps is SAIC taking to ensure that  administrative, civil and criminal penalties 
actually have a deterrent effect?   
(c) What can a trademark owner do if it believes that the administrative fine or 
civil/criminal penalties imposed on an infringer is too low?   
20. Has China considered requiring local AICs to publish their decisions, thereby becoming more 
transparent in their enforcement activities, and se nding a strong message to counterfeiters that their 
activity will not be tolerated at any level of the Chinese government?   
21. Please provide information for 2005 and the first six months of 2006 on the rate of affirmance 
or reversal of appeals from the Trademark Revi ew and Adjudication Board (TRAB) to the Beijing 
High Court of final decisions regarding trademark validity.   
22. The United States supports the protection of geogr aphical indications (GIs) using certification 
or collective marks, as is currently required by China's Trademark Law and its implementing 
regulations.  In particular, the United States apprec iates the exchange of information on our shared 
trademark-based systems for the protection of GIs that occurred at a recent GI symposium in Beijing 
sponsored by the U.S. Patent and Trademark O ffice and the China Trademark Office (CTMO).    IP/C/W/482 
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  (a) Please indicate the grounds that CTMO uses when refusing protection of a 
geographical indication.  Please also include references to the specific articles in the 
Trademark Law or implementing regulations that apply.  
(b) Please describe the independent qualificati on documentation that is required when 
applying for GI protection at CTMO.  Woul d this documentation include quality and 
inspection information concerning the GI?  What other documentation is required? 
23. Please respond to questions 38-40 submitted by the United States in document IP/C/W/453.  
These questions concern China's measures and pro cedures for designating so-called "famous brands" 
and "famous trademarks."  V. PATENT  
 
24. With regard to proposed provision A4 of the th ird revisions to the Patent Law, the current 
proposed text states that when the proper authoritie s consider infringement to be established, they 
"may order the infringer to stop the infringing act immediately;  where the infringing act is serious, 
the infringing products and the equipments specially  used for carrying out the infringing act shall be 
confiscated." (Emphasis added.)  Similarly, the lang uage in proposed provisi on A5(4) allows the court 
to seize "equipments that are specially  used for carrying out the infringing act." (Emphasis added.)  
Article 46 of the TRIPS Agreement states that the judi cial authorities have the authority to dispose of 
materials and implements "the predominant use of which has been in the creation of the infringing 
goods."  (Emphasis added.)   
(a) Please explain whether China believes there is  a difference between the terms used in 
proposed A4 and A5 ("specially used") and Article 46 of the TRIPS Agreement ("the 
predominant use of which").   
(b) Please define "specially" as used in A4 a nd A5 and "serious" in proposed A4.   
(c) The United States notes that proposed A4  and A5 cover only "products and 
equipments" and "equipments," respectively, whereas Article 46 of the 
TRIPS Agreement covers "materials and im plements," which would appear to be 
broader than products and equipment.  Please explain the difference between this 
proposed language and the Article 46 language. 
 25. With regard to amended Article 48 of the thir d revisions to the Patent Law, a compulsory 
licence may be granted if the patent holder does not  exploit the patent for three years and does not 
have a justified reason for doing so.  What are the crit eria to be used in considering whether or not to 
grant the licence?  
26. In the third revisions to the Patent Law, there is  no mention of the judicial authority to destroy 
infringing goods or implements that are used in infringing activity.  In proposed provisions A4 and 
A5, the court is only given the authority to "s eize" or "confiscate" infringing materials and 
implements used in infringement.  Please explain wh ether the court would also have the authority to 
order such goods and/or equipment to be "destro yed or disposed of outside the channels of 
commerce," as required by Article 46 of the TRIPS Agreement. 
27. During the transitional review before this C ouncil in 2004, China explained that the State 
Food and Drug Administration was conducting an inv estigation into the linkage between patent 
approval and drug approval processes.  (See WTO IP/C/M/46, para. 25.)  What were the results of this 
investigation?  Was a written report produced, and if so, is it available to WTO Members?  Please 
explain. IP/C/W/482 
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  28. Please provide information for 2005 and the first six months of 2006 on the rate of affirmance 
or reversal of appeals from the Patent Appeals Board to the Beijing High Court of final decisions 
regarding patent validity.  
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