WORLD TRADE  
ORGANIZATION  IP/C/34 
9 December 2004 
 (04-5451) 
Council for Trade-Related Aspects 
of Intellectual Property Rights  
 
  
TRANSITIONAL REVIEW UNDER SECTION 18 OF THE PROTOCOL ON THE 
ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA  
 
Report to the General Council by the Chair
 
 
 
 
1. At its meeting of 1-2 December 2004, the Co uncil undertook the third annual transitional 
review of the implementation by China of its WTO commitments pursuant to Section 18 of the 
Protocol on the Accession of the People's Republic of China (WT/L/432), and agreed that the Chair, acting on his own responsibility, woul d prepare a brief, factual report  on the review to the General 
Council. 
2. Written comments and questions in  connection with the review were submitted in advance of 
the meeting by Japan, the United States, the Eu ropean Communities.  These submissions were 
circulated in documents IP/C/W /430, 432 and 435, respectively. 
3. In a communication, dated 26 November 2004, China provided information as specified in 
Annex 1A to the Protocol.  This submissi on was circulated as document IP/C/W/436. 
4. An annex to this document contains the relevant part of the minutes of the Council's 
December meeting
1 that reflects the statements made under the review. 
 
_______________ 
  
                                                     
 
1 To be circulated as IP/C/M/46. IP/C/34 
Page 2  
 
ANNEX 
Item P of the minutes of the Counci l's meeting of 1-2 December 2004  
to be circulated as IP/C/M/46
2  
 
P. TRANSITIONAL  REVIEW  UNDER  SECTION  18 OF THE  PROTOCOL  ON THE  
ACCESSION  OF THE  PEOPLE'S  REPUBLIC  OF CHINA 
1. The Chairman  recalled that paragraph 18 of China's Protocol on Accession required the 
TRIPS Council to review the implementation by Ch ina of the TRIPS Agreement each year for eight 
years and report the results of such review promptly to the General Council.  He further recalled that 
paragraph 18 required China to provide relevant information, including information specified in 
Annex 1A, to the TRIPS Council in advance of th e review.  He informed the Council that the 
information submitted by China to it as required und er Annex 1A of the Prot ocol of Accession, dated 
26 November 2004, had been circulated in document IP/C/W/436.  In addition, the Chinese 
Delegation had made available two room documents entitled "White Paper on Intellectual Property 
Rights Protection in China in 2003" and "Status of China's Intellectual Proper ty Rights Protection".  
Questions and comments in connection with the tran sitional review had been submitted by Japan, the 
United States and the European Communities, which had been circulated in documents IP/W/430, 432 
and 435, respectively.   
2. The representative of China , briefing the Council on China's implementation of the TRIPS 
Agreement and the relevant commitments since the la st review, said that the Chinese Government had 
always attached much importance to the protection of  intellectual property rights and would fulfil its 
international commitments in a serious and positive manner.  Since the introduction of opening up and 
reform polices in the late 1970s, China had esta blished an advanced legislation framework, an 
administrative network and enforcement mechanism, which were sophisticatedly structured and were 
consistent with international rules.  Moreover,  China had participated  in and ratified major 
international treaties and conventions on IPR protect ion.  This remarkable process, which had taken 
developed economies over 100 years, had been completed by China in around two decades.  She said that the Chinese Government was fully aware that resolute and effective enforcement was the 
essential link for the legislation to exert its protective functions. 
3. With respect to law enforcement, she said that China's IPR protection featured both 
administrative and judicial channels which operated in a complementary way simultaneously.  China 
had investigated and dealt with in fringement cases, combated offences and protected interests of right 
holders through administrative enforcement, criminal proceedings as well as closer cooperation 
between administrative departments, public securi ty authorities and people's procuratorates.   
4. To further step up IPR protection, China's Government had set up, at a national level, an IPR 
protection working group consisting of all judi cial and administrative enforcement authorities 
involved in IPR protection.  This working group was mandated to coordinate national IPR protection 
work and supervise the handling of major violatio n cases.  The State Council had also laid out a 
year-long special campaign across the country for strengthening IPR protection commencing from 
September this year. 
5. Recognizing the legitimate concerns and intere sts in IPR protection of foreign companies and 
entities operating in China, the Chinese Government  had institutionalized a coordinating mechanism 
for regular communication and exchange with fore ign enterprises and trade associations.  This 
mechanism had recently been expanded to include re presentatives of foreign commercial chambers in 
                                                     
 
2 The paragraph numbering of this excerpt will not correspond with that of the minutes of the TRIPS 
Council meeting but has been included for the convenience of users. IP/C/34 
Page 3 
 
 
China to better attune to comments and opinions from  representatives of a broader range of interests 
in a timely manner.  These concerned foreign partie s had played a positive role in cooperating with 
enforcing authorities by reporting infringing acts  and making suggestions and also by jointly 
promoting the protection of IPR.  These policies and measures were in line with  the specific situation 
of China and had achieved concrete results.   
6. During a special IPR protection campaign in the first half of this year, which mobilized 
several authorities concerned, industrial and commer cial authorities had investigated and dealt with 
4,036 trademark infringement cases with a total fine of nearly 30 million RMB.  12,000 copyright 
enforcement personnel had inspected over 8,000 so ftware and audiovisual product dealers and had 
confiscated over 1.5 million pirated discs.  In this respect, she referred to the Xiushui  market in the 
city of Beijing, as an example.  This market ha d been a place renowned for fake goods, especially 
clothes, and had almost became a sign of Beijing.  In the transitional revi ew of last year, some 
Members had raised questions concerning this partic ular market.  Nevertheless , if one went to that 
market now, one would find that things had changed dramatically.  On 20 July 2004, the Beijing 
Administration of Industry and Commerce had publis hed a decree banning all clothes and accessory 
markets from selling commodities bearing 25 trademar ks such as Prada, Burberry etc.  Vendors 
continuing to sell such commodities would be inve stigated as suspected trademark infringers.  
Vendors with repeated offences would be evicted from the market and vendors suspected of criminal 
activities would be transferred to the judicial auth orities for investigation.  This measure indicated 
China's strong commitment to combating IPR offences and a serious regard to Members' concerns and 
at the same time served as a testimony to enhanced competence and accumulated experience. 
7. China's IPR protection was getting more systemat ic in terms of organization, more extensive 
in terms of territory, more regular in terms of time and more institutionalized in  terns of enforcement.  
She pointed out that IPR protection was not a passive response to fulfil China's accession 
commitments, but that it responded to an increasing need to build a sound trade and investment 
environment, promote scientific and technical inno vation and to speed up economical development of 
China.  She said that China's Government spared no effort in establishing a strong and effective IPR 
protection system, which was in the interest of both China and other Members.  However, the Chinese 
Government hoped that Members could understand that , given that China had started  building its IPR 
protection only 20 years ago, it still had a long way to go before it could have a highly advanced 
protection system.  Lastly, she said, Members sh ould view the IPR situation of China from a 
developmental perspective and should continue to provide support and assistance for China's painstaking efforts to improve IPR protection. 
8. She said that China had prepared two documents  for this meeting, namely: "White Paper on 
Intellectual Property Rights Protection in China in 2003" and "Status of China's Intellectual Property 
Rights Protection" which had been made available as  informal room documents.  She expressed her 
hope that these documents could put together the big picture for Members and help them better understand the measures and achievem ents of China on IPR protection.  Although the communication 
from the European Communities had reached the Chin ese delegation only three working days before 
the review, as a cooperative gesture, China had provided answers to the European Communities' 
questions. 
9. In answering the specific questions from Member s, the representative of China first took up 
the general issues.  With regard to on-line applicat ion and information disclosure, he said that the 
office of the national working group on intellectual pr operty protection was set up in the Ministry of 
Commerce, namely MOFCOM.  Its website at ip r.mofcom.gov.cn provided a great deal of 
information on IPR protection in China. 
10. He said that the e-filing of patent applica tions was in a trial operation phase.  Patent 
examination deadlines and public information such as  published patent applications, patent rights and IP/C/34 
Page 4  
 
the register on layout-designs were available on the website of the State Intellectual Property Office 
("SIPO") at www.sipo.gov.cn. 
11. The Trademark Office had already realized on-line trademark publication and had publicized 
all the opposition decisions on the website of the State Administration for Industry and Commerce 
("SAIC").  At present, China was making efforts to speed up the automation process of trademark 
registration.  In China, the acquisition of patent and trademark rights was subject to a registration 
procedure, while the copyright subsisted when a work was created, without prior examination by a 
governmental agency.  Accordingly there was no plan concerning on-line applications for or 
examination deadlines on copyright protection.  He said that the on-line application and search system 
for registration of IPR protection of the General Administration of Customs of China ("GCA"), had 
come into use in September 2004.  Anyone could browse information on all registered IPRs in the 
GCA website at www.customs.gov.cn/ipr/ipr2001c/default.asp.  The detailed information of a 
registered IPR contained the name of the registered holder, name of the product, type and the content 
of the right etc., by the registration system.  The right holder could submit his application for a 
registration on-line, find out the process of verification for IPR in the GCA and managing or 
maintaining its registration information. 
12. According to China's Copyright Law, works by a foreigner may be protected under an 
agreement concluded between China and the country or Member to which he belonged or under an 
international treaty, to wh ich both Members were parties, even if they had not obtained marketing 
approval.  For instance, in 2004, the National Copyright Administration of the People's Republic of 
China ("NCAC"), at the right owners' request, had undertaken special measures to confiscate pirated audio-visual products of the US film "Shrek 2", which had not yet gained access to China's market at 
that time.  The relevant Articles stipulating punish ment were Articles 5, 10, 21 and 25 in the Law on 
Unfair Competition. 
13. Regarding changes in polices or restrictions on  representation of intellectual property rights, 
he said that there had been no change in the rules on  the qualification of patent  agents.  Pursuant to the 
regulations on patent representations issued by the State Council in 1991, law firms seeking to practise patent representation were required to have  at least three attorneys at law with patent agent 
qualifications and approved by SIPO.  China had no t so far established any special requirement in 
respect of copyright representation.  The representa tive also suggested that the legal consultant firms 
should be asked for help regarding useful information for foreign right holders to lodge complaints 
directly to Chinese officials. 
14. Regarding legislation and the judicial interpretation, he said that the enactment of a 
systematic and universal civil code had always been an important legislative task for China.  In the 
ninth National People's Congress ("NPC"), a draft ci vil code had been filed an d reviewed while in the 
tenth NPC the enactment of a civil code had been de emed an extremely important task.  However, the 
universality and complexity of issues concerning ci vil codes made it difficult to tell the exact time for 
promulgation.  Moreover, as China's economy and society developed, some detailed articles of the 
draft civil code would need further rectification and modification.  More research ought to be done to 
find out how and what to do with the modification.   
15. As to judicial interpretation  regarding IP that were currently planned for enactment or 
revision, the Supreme People's Court and the Su preme People's Procuratorate had discussed the 
"Judicial Interpretation and Applic ation of the Laws dealing with Criminal Offences of IPR" 
(hereinafter the "Interpretation"), which would be promulgated soon.  In drafting the Criminal 
Interpretation to IPR, the Supreme Court and th e Supreme Procuratorate had solicited the comments 
and questions from the standing committee of the NPC, public securities court, procuratorates, 
administrative bodies for enforcement and the academy. Moreover, comments and the 
recommendations from enterprises, chambers and associations of the US, EU and Japan had been  duly considered.  After the comments and questions  had been summarized, the Interpretation would IP/C/34 
Page 5 
 
 
carry out clearer and more definite standards fo r verdicts and lower the threshold for criminal 
acquisition.  When the new Interpretation took effe ct, the provisions of the relevant judicial 
documents that were inconsistent with the new Interpretation would automatically be nullified. 
16. The Anti-Monopoly Law was on the legislative agenda of the tenth NPC.  Since the 
organization of the State Council in 2003, the Ministry of Commerce was responsible for checking 
monopolies.  Therefore, it had the mission of drafting Anti-Monopoly Law, which had been the 
mission of the former state economy and the trade committee. 
17. Based on the legislative research and suffic ient discussion, MOFCOM had completed the 
draft of the Anti-Monopoly Law and had submitted it to the State Council in March 2004.  The draft 
contained articles regulating monopoly agreements , abuse of dominant market status, large scale 
concentration of enterprises, authority and legal du ties.  Due to China's situation, the draft also 
included the articles regulating administrative monopo lies and abuse of intellectual property.  After 
the deliberation of the State Council's legislat ive affairs office, the draft of Anti-Monopoly Law 
would be submitted to the State Council.  If the State Council approved, the draft would be submitted 
to the standing committee of the NPC for further deliberations. 
18. Regarding the amendment of the Law to Counte r Unfair Competition, since 1998 SAIC had 
already done a lot of research about the amendment of the law to counter unfair competition and was 
now starting to draft the amendment. 
19. The regulations on the protection of the right of communication through information network, 
mentioned in Article 58 of China's Copyright Law, ha d been brought into the 2005 legislative agenda 
of the State Council.  Currently, this task was carried out in an orderly way. 
20. He said that China consistently attached gr eat importance to public participation in 
legislation.  Article 5 of the Law on Legislation, which had come into effect on 1 January 2000, stipulated that legislation should embody people's  will, develop socialist democracy and protect the 
people's right to participate in legislation through various ways. 
21. On 22 March 2004, the State Council had published the guidelines for implementation of the 
promotion of legitimate administrative activities, am ong which paragraph 16 had stipulated that "the 
present way of legislation by the government shou ld be changed and the government should extend 
public participation into governme ntal legislation.  Legislators, juristic enforcers and law 
professionals should communicate with each ot her and thus a professional consultation and a 
reasoning system should be established.  In draftin g laws, regulations, rules and documents as a basis 
for administrative management, the government should solicit comments through various channels, 
such as hearing, documentation, symposium, discussion or publishing the draft.  The will of the 
majority was to be respected and people's own g ood should be embodied.  After drafts of laws, 
regulations, rules and documents as a basis for admi nistrative management are passed, they should be 
published in a governmental gazette, popular newspapers and governmental websites.  Citizens, cooperations and the corporate body should ha ve easy access to the governmental gazette". 
22. Regarding questions on patents, in 2003, the number of patent applications filed by US 
applicants had been 12,221, while the number of Chinese applicants had been 251,238, among which 
56,769 had been for inventions, 127,842 for utility models, while 86,627 had been for industrial 
designs.  The statistics relevant to foreign applications in China was av ailable in SIPO's annual report.  
The report could be browsed on the SIPO website.  SIPO did not collect and compile data on foreign 
patent applications by types.  No work was done on examination duration of foreign applications 
alone. 
23. Pursuant to Article 23 and 45 of the Patent La w, any entities or individuals, including foreign 
nationals, could request a patent right to be declared  invalid on the grounds that the patent for design IP/C/34 
Page 6  
 
was identical or similar to any design before the date  of filing.  In addition, pursuant to rule 79 and 
rule 86 of the implementing regulations of the Chin ese Patent Law, where there was a dispute over the 
ownership of patent rights, the parties concerned could request administrative authority for patent 
affairs to mediate or institute legal proceedings w ith a People's Court.  Where a People's Court or an 
administrative authority held that the ownership of the patent right should belong to the plaintiff, the 
plaintiff could request SIPO to ma ke a registration of change in ownership of the patent right by 
producing an effective judgement or decision. 
24. As for legal protection for layout-designs of in tegrated circuits, the regulations on protection 
of layout-designs of integrated circuits and its implementing rules had been promulgated and had 
come into effect a long time ago.  The Supreme People's Court had also formulated a notice on trial of cases concerning layout-designs of integrated circ uits, which provided the legal basis on the way of 
relief to protect the layout-designs of integrated circuits.  Up to the present, there had not been any 
lawsuit on layout-designs of integrated circuits and SIPO had not received any request for settlement 
on disputes relating to them. 
25. A State Food and Drug Administration (SFDA) was now conducting an investigation into the 
linkage between patent approval and drug approval pr ocesses.  As for measures taken to protect 
undisclosed data, pursuant to paragraph 2 of Article 35 of the Implementation Rules on the Drug Law, 
the SFDA would not approve an application that  was based on other applications' undisclosed 
experimental data.  Pursuant to Article 14 of the Methods on Administration of Registration for 
Drugs, applicants should make a commitment that all the data to be provided had been obtained by 
themselves, when an application for drugs registra tion was submitted.  Pursuant to Article 21 of the 
Method on Administration of Registration for Drugs, proof of legitimacy of source would be needed 
for submission of application for dr ugs registration if the data had been obtained abroad.  Pursuant to 
Article 22 of the Method on Administration of Re gistration for Drugs, the SFDA had reserved the 
right to request the applicant to re-experiment, to pr ove that the data had been obtained by himself.  
Pursuant to Article 52, during the verifying period of approval for new drugs, technical requirements for new drugs would not be lowered even if the drug had already entered into the foreign market.  That was to say there would be no dependence on data.  The SFDA was obliged to keep secret only 
the experimental data which had been obtained by the applicant alone.  Punishment would be 
exercised pursuant to Article 72 for the leakage of unreleased experimental data.  Pursuant to 
paragraph 3 of Article 35 of the Implementatio n Rules on the Drug Law, the SFDA would accept 
applications concerned when public interests were involved or measures  had been taken to ensure that 
the data would not be used for unjustified commercial purpose. 
26. One of SIPO's key tasks was to tackle examin ation backlogs.  After adoption of measures 
such as recruiting a large number of examiners on a continuous basis, updating the automation system and optimising the examination process etc., the averag e period of examination for patent applications 
for inventions by SIPO in 2003 had been 30 months., while from January to July in 2004, the average period had been further reduced to 28 months.  Otherwise, SIPO had no statistics on the average 
period of examination in specific technical fields.   
27. Regarding the protection of plant varieties, th ere was no specific plan to implement the 
UPOV 1991 Act.  China had always been increasing  the number of new varieties of plants under 
protection and expanding the scope of  new varieties of plants under protection.  This list of newly 
added varieties was available to the public on the we bsite of the Ministry of Agricultural and the State 
Forestry Administration. 
28. Regarding the prevention of misappropriated a pplications, pursuant to Article 23 and 45 of 
the Patent Law, any entity or individual including fo reign nationals, could request a patent right to be 
declared invalid.  In addition, pursuant to rule 79  and rule 86 of the implementing regulations of the 
Chinese Patent Law, where there had been a disput e over the ownership of patent rights, the parties IP/C/34 
Page 7 
 
 
concerned could request the administrative authority for patent affairs to mediate or institute legal 
proceedings with the People's Court. 
29. Regarding the improvement of  licensing regulations, Articles 24 and 25 of the Regulation on 
the Administration of Import and Export Technology were reasonable and did not contradict the 
TRIPS Agreement.  Article 28.2 of the TRIPS Agr eement provided that patent owners should also 
have the right to assign or transfer by succession a patent and to conclude licensing contracts.  This 
provision granted the right of licensing patents to the patent owner.  However, it did not mean that the 
licensor did not need to undertake any obligation and that he could license the patent without any 
restriction.  As the transferor held the technolo gy and should know the ownership and the capacity of 
the technology, it conformed to the principle of equity  that the transferor was required to guarantee his 
legitimate ownership over the technology provided and to guarantee that the technology provided was 
capable of obtaining the contracted goal.  It was also consistent with the principle of tort law that the 
transferor should bear tort liabilit y if the transferee infringed legitima te rights and interests of others 
due to use of technology according to the contract .  The laws on transfer of technology in many 
countries had similar provisions, so the said provis ions conformed to the international usage and did 
not impose unreasonable restriction to the honest and bona fide transferor. 
30. Turning to protection of trademarks and enterprise names, he first took up the issue of 
pending opposition and can cellation proceedings at the Tradem ark Office and their respective 
pendency.  Currently, the Trademark Office of China had over 2,100 pending cancellation 
proceedings involving registered trademarks that had not been used for over three years and that the 
pendency was about one year.  The office had 29,000 pending opposition proceedings and, in 
2002-2003, the average pendency had been about two years.  China was now revising its examination 
guidelines and would publish them after the revision. 
31. Regarding the related goods and services in tr ademarks examination, the Office had adopted 
the concept of similar goods and services in this  process.  When examiners made a substantive 
examination on prior trademark rights, they made cross examination on similar goods or services in different classes.  In determining whether they were  similar goods or services, factors as the purpose, 
function and sales channel of the goods or serv ices would be taken  into consideration. 
32. Turning to the determination of well-known marks,  he said that, for the People's Court, the 
recognition of well-known trademarks was essentially the determination of the facts of the case which 
was a constituent part of jurisdiction exercised by the People's Court.  The decisions made by the 
People's Court to determine a well-known trademar k was in conformity with the international 
conventions.  The Interpretation by the Supreme Peop le's Court of the Application of Laws Dealing 
with Cases Concerning Dissension on Internet Doma in Name and the Interpretation by the Supreme 
People's Court to the Application of Laws Dealing with Civil Cases Concerning Dissension on 
Trademark Rights made clear regulations on the issues above.  According to statistics, since the 
amendment of the Trademark Law, Chinese courts had determined 17 well-known cases, three of which concerned foreign brands.  According to Ar ticle 22 of the Interpretation by the Supreme 
People's Court on the Application of Laws Dealing with Civil Cases Concerning Dissension on 
Trademark Rights, the recognition of well-known trad emarks should be based on the rules made in 
Article 14 of the Trademark Law.  The People's Court would not verify the trademark when one party 
of the previous applied to protect a well-known trad emark that had been determined by the concerned 
administrative authorities or by the People's Court,  if the other party had no dissension on the well-
known trademark concerned.  If the other party su bmitted its dissension, the People's Court would 
make a re-verification according to Article 14 of the Trademark Law. 
33. The Customs of China had no right to dete rmine a well-known trademark if Courts or 
authorities of the SAIC had already determined a well-known trademark.  On a request to the Customs 
to help enforcement, the Custom s would assist in enforcement. IP/C/34 
Page 8  
 
34. There had not been a commonly accepted practice in the recognition of well-known 
trademarks.  However, the revised Trademark Law and its subsequent regulations made clear and 
detailed prescriptions on this matte r, which were completely in confor mity with the requirement of the 
TRIPS Agreement.  Therefore, pursuant to these regulations, two factors would be taken as the 
standard for recognition of well-known trademarks wh en authorities of public security were dealing 
with the concerning criminal cases.  First, pursuant to the provisions on the determination and 
protection for well-known marks by the SAIC and th e Interpretation by the Supreme People's Court to 
the Application for Laws Dealing with Civil Cases Concerning Dissensions on Trademark Rights, the 
status of well-known trademarks should have been granted by the authorities of the SAIC or 
determined by the People's Court.  Second, pursuant to Article 213-215 of the Criminal Law, a well-
known trademark in the sense of the Criminal Law s hould be registered in the Trademark Bureau in 
China. 
35. Turning to the protection of geographical indicat ions ("GIs"), he said that the AQSIQ System 
of GI protection and the system of GI protection es tablished by the China's Trademark Office in the 
form of collective and certification trademark we re different intellectual property rights protection 
measures and that applicants could chose either of the two systems voluntarily for GI protection. 
36. The State Council had endowed AQSIQ with both the function of general administration and 
law enforcement.  AQSIQ had enforced GI protectio n for registered GIs (PDOs) in the light of the 
Law on the Quality of Products, the Law on Standardisation, the Regulations on the Product of 
Destination of Origin and a compulsory national standard entitled "The Ge neral Specifications on 
Product of Destination of Origin".  Supervision and spot checks as well as other law enforcement 
measures had been taken against counterfeiting of such domestic GIs as Chinese Longjing tea, 
Shaoxing  wine and Longkou Vermicelli.  Sanctions were taken against the counterfeiting of Cognac 
wine in China. 
37. In the light of the Law on the Quality of Products, quality and a technical supervision 
agencies could impose punishment on counterfeiting GI products, while consumers could impose civil liabilities on the misfeasor only in the light of the Law on the Quality of Products, and the Law on the 
Protection of Consumers' Rights. 
38. The application for protection under the GI system of AQSIQ had been carried out on a 
voluntary basis.  Applicants already possessing a trademark, certification or collective mark could 
also apply for GI protection under the GI system of AQSIQ voluntarily. 
39. AQSIQ would follow an active and pragmatic ap proach to strengthen the communication and 
the cooperation on GI protection with other countries .  Based on consensus between the two parties, 
AQSIQ and the Ministry of Productive Activities of Italy had signed a memorandum on bilateral 
cooperation regarding GI protection with a view to enhanced information exchanges and technical 
cooperation between the two parties. 
40. The representative of China said that, since last  year's transitional review, there had been no 
new rules on the protection of enterprise names.  Ever since joining the Paris Convention, China had 
been strictly observing the principle of national treatment providing equal protection for domestic 
companies' trademarks and marks registered in China by foreign companies.  He said that the saying 
that "foreign enterprises in China did not enjoy the same protection for their well-known marks as 
domestic enterprises in China" did not have any factual grounds.  Since the implementation of 
provisions on determination and the protection of  well-known marks on 1 June 2003, the Trademark 
Office and the Trademark Review and Adjudication Board had totally determined the status of 153 
well-known marks, among which 24 were from abroad, 12 from the US, 12 from other Members.  He 
said that if the registrant of a well-known mark ne eded a competent authority to determine his mark as 
well-known based upon the provision of Article 13 of  the Trademark Law, he or she should, in line 
with Article 14 of the Trademark Law and the relevant provisions on the determination and the IP/C/34 
Page 9 
 
 
protection for well-known marks, submit written evid ence which he or she be lieved could prove that 
his or her mark was well-known.  Moreover, ther e was no uniform requirement for the content or 
formats of written documents.  He said that recently  a court in Tianjin had determined the Japanese 
mark YAMAHA as a well-known mark  in a civil case ruling.   
41. Turning to copyright issues, the representativ e of China said that, according to China's 
Copyright Law, copyright protection was the same even for works appearing in different media.  
Thus, whether distributed as hard publications or co mmunicated as soft Internet content, all of them 
could be protected under the Copyright Law.  At present, China was actively working on increasing 
the personnel involved in copyright enforcement.   
42. In the Notice on 2004 Special Control Action of fighting against software piracy,  the NCAC 
had explicitly demanded that the administration of enterprises' commercial use of software should be 
strengthened and that the enterprises which installe d, or used pirated software in their computer 
system or which installed software beyond the sc ope prescribed in the purchaser's sale contract, 
should mend their act within a specific time.  Otherwise they would be severely punished by the 
operation of law.  Consequently, in case of usi ng pirated software by a commercial institute, the 
copyright administrative department may impose pena lty without a prior judgement of whether the act 
impaired public rights and interests or not.  Ac cording to China's Copyright Law the use of pirated 
software in a Internet cafe was an infringing act,  which was also prohibited by law.  The "temporary 
reproduction" issue was being studied by the Chin ese Government at present and would be properly 
dealt with in the Measures for the Protection fo r the Right of Communication through Information 
Network, which had been brought into the 2005 legislative agenda of the State Council.   
43. Where an ISP did not remove the relevant content regardless of a copyright owner's notice or 
knowing that the Internet content provider infringed another copyright through network and where 
this omission impaired public rights or interest s, the ISP should be liable for administrative 
infringement.  The National Copyright Administ ration NCAC and the Ministry of Information 
Industries were drafting the Administrative Measures on the Protection of the Rights to Communication through Information Network, in whic h the administrative procedure of notice-and-
take-down would probably be included to reduce network piracy.  It was expected that these 
departmental rules would be issued by the end of 200 4.  According to China's laws and regulations, as 
well as future Administrative Measures on the Protection of the Right of Communication through 
Information Network, which was still in draft, the Ministry of Information Industries had the authority 
to revoke ISPs' business licences.   
44. He said that, undoubtedly, China was cautious as well as active about the accession to the two 
new treaties, the WIPO Copyrigh t Treaty ("WCT") and WIPO Perfor mances and Phonograms Treaty 
("WPPT") and China had made great efforts for this goal.  The Administrative Measures on the 
Protection of the Right of Communication through Information Network was being drafted by the 
NCA and the Ministry of Information Industries and would be issued by the end of this year.  In addition to effectively implementing the two new treaties to which China would accede, the State 
Council had brought these measures in to its 2005 legislative agenda.   
45. It was known that the obligation regarding th e removal and alteration of electronic rights' 
management information ("RMI") stemmed not from the TRIPS Agreement but from the WCT and 
WPPT.  Nevertheless, this problem was being actively taken into account.  Currently, the State Council was doing the legislation planning on thes e matters so that the protection of RMI would be 
properly dealt with. 
46. Regarding the payment of royalties for copyright the NCAC and the State Administration of 
Radio, Film and Television were working on broad casting payment measures.  At present, the task 
was in the process of investig ation, study and drafting.   IP/C/34 
Page 10  
 
47. In respect of retroaction, he said that Article 9 of the Implementing Measures on Copyright 
Administrative Penalty entirely conformed with the Article 29 of the Law on Administrative Penalty, 
which prescribed "Where an illegal act is not discovered within two years of its commission, 
administrative penalty shall no longer be imposed, except as otherwise prescribed by law.  The period 
of time prescribed in the pre ceding paragraph shall be counted from the date the illegal act is 
committed;  if the act is of continuing or continuous nature, it shall be counted from the date the act is 
terminated".  Therefore, the prescription of admi nistrative penalty was different from that of civil 
procedure.  The latter was counted from the date on which the injured party had known or should have 
known the infringement of its rights, while the former was counted from the date on which the illegal 
act had been committed or terminated.   
48. Regarding some further copyright questions, he said that China had recently indicated that it 
would join the 1996 WIPO Internet treaties, the WCT and WPPT, but neither had it indicated joining 
before 2005, nor had it intended to complete a draft for the Internet-related im plementing rules before 
the end of 2004.  According to the Copyright Law of China, the measures on the protection of the 
right of communication through information network had been brought into its 2005 legislative agenda. He said that currently  this task was being carried out in an orderly way.   
49. Regarding the protection of sound record producers' rights, he said that the Chinese copyright 
legislation was totally consistent with the TRIPS Agreement and that China would provide the rules 
on collecting societies to Members concerned once these were ratified. 
50. Turning to the issue of enforcement, he said that the State Council had promulgated a special 
action plan for the protection of IPRs this year and SAIC had issued its action plan for the campaign 
of exclusive trademark rights protection in June. All these plans were being made available on the 
website of the state office of the IPR working group at ipr.movcom.gov.cn or on the website of SAIC.  
One may also refer to the NCAC's Implementing Plan on Special Action for the Protection of IPRs of 
September 2004, which would be available at www.ncac.gov.cn.   
51. Regarding the case numbers of administrative en forcement, according to statistics, in 2003 
and in the first half of 2004, the people's courts at various levels throughout China had completed trials of 220 cases of fake registered trademarks, 85 cases of selling commodities with fake registered 
trademarks, 167 cases of illegal production and sa le of registered trademarks, 22 of copyright 
infringement, 4 cases of selling copyright infringing  duplicates and 69 cases of commercial secret 
infringement.  
52. The statistics in 2003 showed that 37,489 la w-breaking cases of various kinds had been 
handled by Administrations for Industry and Commerce ("AICs") at all levels throughout the country, 
among which there had been 11,001 general tradem ark offences and 26,488 trademark infringement 
and counterfeiting cases.  Besides, 84,755,000 pieces or sets of illegal representations of trademarks 
had been seized and/or removed.  15,597 mould plates and other tools directly used for the 
infringements had been confiscated and 5,754.92 to ns of infringing goods had been destroyed.  The 
fine had totalled 242m RMB and 52 persons involved in 45 cases had been transferred to judicial organs for criminal liability.   
53. In the first three quarters of 2004, 13,922 law- breaking cases of variou s kinds had been dealt 
with, among which there had been 3,407 general trademark offences and 10,515 trademark 
infringement and counterfeiting cases.  In addition, 12,232,900 pieces and sets of illegal 
representations of trademarks had been seized and/or removed.  16,894 mould plates and other tools 
directly used for the infringements had been confiscated and 10,952 tons of infringing goods had been 
destroyed.  The total value involved had reached 452m RMB, the fine had amounted to 99m RMB 
and 16 persons involved in 14 cases had been transferred to judicial or gans for criminal liability.  In 
2003, SIPO at various levels throughout China had accepted 1,527 patent dispute cases among which 
1,237 cases had been completed.   IP/C/34 
Page 11 
 
 
54. Further, in the enforcement against producin g and selling fake commodities and infringing 
IPRs, the Supreme People's Procuratorate this year  had required a particular supervision by the 
People's Procuratorate at various levels over criminal cases of this kind.  From January to 
October 2004, the People's Procuratorate at various levels had approved the arrest of 2,118 criminal 
suspects involved in the production and sale of  fake commodities and prosecuted 1,522 of them.  
There had also been approval of the arrest of 483 criminal suspects and the prosecution of 488 
involved in other IPR infringements.  70 more cas es had been marked as priority cases by the 
Supreme People's Procuratorate, either monitored direct ly by itself or required to be monitored by the 
High People's Procuratorate at the provincial level.   In the first three quarters of 2004, 6,275 unfair 
competition cases on the infringement of IPR had been investigated into and dealt with by AICs at all 
levels throughout the country.  The total value involved had been 385.61m RMB, among which 6.94m 
had been confiscated and 35.58m had been the fine.   
55. In 2003 the copyright administrative departments at all levels had accepted 23,013 cases and 
had settled 22,429 of them.  21,032 cases had resulted in penalty.  1,173 cases had led to mediation 
and 224 had been removed to judicial departments.  In the same year, the local copyright administrative department had captured 67.97m of various kinds of pirated products, including 24.75m pirated books, 1.78m pirated periodicals, 26.45m pirated audiovisual products, 6.62m pirated 
electronic publications, 7.22m pirated so ftware and 1.14m other pirated products. 
56. He said that China had always attached great importance to IPR protection and fighting IPR 
infringement and that China was also prepared to cooperate with other Members, either in the bilateral 
or the multilateral legal framework.  He said that fo r criminal actions, the foreign affairs bureau of the 
Supreme People's Court coordinated the contacts with foreign members and the hearing of the IPR-
related cases was undertaken by the third civil court of the Supreme People's Court.  At present, the 
National Copyright Administration (NCAC) had established a good relationship of interactive 
cooperation with BSA, MPA, IFPI, Customs of Hong Kong SAR and MPIA.  As China believed that 
striking piracy was an unshirkable international duty for the governments of all Members, including developed Members, China was ready to continuously consult and cooperate with the relevant departments of other governments in this respect, so as to jointly crack down on piracy.   
57. With respect to patents according to Article 57  and 68 of the Patent Law, he said that 
administrative enforcement was to be carried out by  the administration responsible for patent-related 
work.  Therefore, there was no mechanism for c oordinated action with foreign governments.   
58. On the customs enforcement front, the Ch inese Customs authorities and the Customs 
authorities in Hong Kong, China had established an excellent cooperation relationship, which 
included joint enforcement action, information exch ange, investigation assistance, personnel training 
etc. The Chinese customs authorities enjoyed good cooperation with the Asean-Pacific Regional 
Intelligence Liason Offices ("RILO s") of the World Customs Organization ("WCO") in respect of 
information exchange. In recent years, quite a number of cases had been disclosed with the information provided by the Asean-Pacific RILOs of the WCO.  An agreement between China and the EU on customs administrative mutual assistance would also be signed at the end of 2004, which 
would initiate the cooperation between the Customs au thorities of the two sides with respect to IPR 
protection.   
59. According to China's laws, regulations and departmental rules, copyright owners could seek 
relief at the enforcement department of the place where the infringer had its seat of business or its 
principal operative office, or where the infringe ment was committed or the infringing result took 
place.  The People's Procuratorate, at its four leve ls from supreme down to the local county, internally 
had all special bodies or relatively fixed personnel to  deal with IPR-related cr iminal cases.  He said 
that, in the Supreme People's Procuratorate, the examination, prosecution and appearing in court of 
IPR cases was undertaken by the prosecution office.  The prosecution office was also responsible for providing coordination, guidance and personnel traini ng for the prosecution offices at various levels IP/C/34 
Page 12  
 
of the People's Procuratorate when dealing with cases of this kind.  The prosecution office also had an 
inter-agency meeting mechanism with the investigat ing authorities dealing with cases of this kind to 
exchange information, start crime prevention measures and also comment on the evidence 
establishing work of the investigating authorities.  In the People's Procuratorate at all local levels it 
was also the prosecution offices that were respon sible for the examination, prosecution and appearing 
in court for cases of this kind.  They accepted guidance from the higher level, the People's 
Procuratorate, on application of law and criminal penalty criteria etc. in cases of this kind and also had 
inter-agency coordinating mechanisms with the investigating authorities at the same level.   
60. With regard to the issue of private investigating firms, he said that the Ministry of Public 
Security of China was taking active steps to consid er it.  However, there was still no new regulation 
being issued. 
61. Regarding the elimination of localism, he said that in order to fight against and eliminate local 
protectionism, the State Council had issued, on 21 April 2001, stipulations on the prevention of local 
blockades in market economy activities.  This  was a special regulation fighting against local 
protectionism.  On IPR protecti on specifically, a special action programme on IPR protection had 
been issued by the State Council on 26 August 2004, in which the elimination of local protectionism was also an important content. 
62. Turning to administrative enforcement, he sa id that the NCAC was the government body 
responsible for copyright administrative protectio n in the Internet environment.  Data on the 
administrative enforcement showed that, in the first three quarters of 2004, 20,371 unfair competition 
cases of various kinds had been investigated and dealt with by AICs at all levels throughout the 
country.   
63. According to the Law on Administrative Procedure, if an administrative punishment decided 
by the enforcement department was obviously unreasonable, the People's Court could modify it by 
verdict.  According to the Law on Administra tive Procedure and Articles 44 and 56 of the 
Interpretation on Issues Concerning the Implementation of the Law on Administrative Procedure by the Supreme People's Court, the People's Court could make an order or a verdict to reject the lawsuit 
or the claims of the lawsuit.   
64. According to the aforesaid law and interpretation,  all the parties of a law suit had an equal 
right to entrust a lawyer and all the evidence needed  to be shown and enquired in the court hearing.  
Evidence which had not been enquired by the opposi ng party in a court hearing was never adopted for 
the grounds of deciding the case, except if the evidence involved confidential information of the 
country, commercial secrets, individual privacy or wa s to be kept secret based on definite provisions 
of laws.  He said that the People's Court had to de liver the judicial documents including the verdict, 
order and decision to the relevant parties of the la wsuit, otherwise these judicial documents would not 
go into effect.   
65. Regarding obligations of administrative ag encies to provide wr itten decisions with 
interpretations for their enforcement decisions, he said that his delegation believed that this question 
was not relevant to the IPR system and that hi s delegation was not obliged to answer it here. 
66. Regarding the degree of deference extended to administrative case decisions, he said that his 
delegation believed this question to be about how th e court made its judgement  upon facts recognized 
and laws applicable in administrative enforcement.  He said that in the administrative lawsuit system 
of China, the principle of validity review of spec ific administrative behaviour was applied.  In case 
administrative behaviour needed to be carried out upon case notes pursuant to the relevant law, the 
court practised the principle of "records exclusivity", that was to say that the court would not 
introduce or accept evidence beyond the record. In other cases, the court would conduct an overall IP/C/34 
Page 13 
 
 
review on the recognition of the facts and laws ap plicable in administrative enforcement.  Under 
special circumstances, the court could collect evidence by authority.   
67. According to the Law on Administrative Punishment of China, the amount of fines of 
administrative punishment was prescribed by la ws or administrative regulations.  Competent 
authorities of copyright administration on various levels were obliged to conduct their administration 
legally and were not allowed to lower or raise the amount of the fine.   
68. Turning to civil enforcement, he said that pursu ant to the Law on Civil Procedure, the period 
of first instance of civil law cases was six months, while the period of second instance of civil law 
cases was three months.  The period could be extended and the procedure for extension would have to 
be followed.  In practice, most IPR cases could be finished within the trial period, though some 
complicated cases could take longer time.  When circumstances appeared for lawsuits to be suspended 
according to the law, the court would suspend the lawsuit.  The compensation amount was determined 
by the court on the basis of the principle of comp lete compensation prescribed in laws and judicial 
interpretations and of the specific case including th e reasonable amount of money paid to stop the 
infringement.  The retaining fee for lawyers, which was consistent with the re levant regulations, could 
be calculated in the compensation on the basis of the request of the plaintiff and the specific case.  If 
one party had dissensions on the compensation amount, he or she could appeal to a court of a higher 
level. The court of the second instance would veri fy all the requests, but in practice, hardly any 
changes were made to a compensation amount dete rmined by the court of the first instance.   
69. The present Patent Law, Trademark Law and Copyright Law and corresponding judicial 
interpretations all contained regula tions concerning judicial injunc tions before the lawsuit.  The 
concerned right holder could file to the court.  After the court had accepted the application, it would 
actively and with caution determine whether judicial  injunctions would be implemented.  Actually, 
statistics showed that the Chinese courts had awar ded injunctive relief to right holders in several 
hundred cases.  Courts that awarded injunctive relief  before lawsuits were mainly those situated where 
the defendant was or where the infringement had oc curred.  Even if some injunctions had to be 
enforced in places other than where the court was situated, the concerned court would assist in the enforcement.  Meanwhile, China's courts were tryi ng hard to ensure the enforcement of verdicts. 
70. Turning to criminal enforcement, he said that in legal terms, it was possible that both civil and 
criminal IPR cases were heard by courts of the same level, but this was really rare.  According to 
Article 20 of the Law on Criminal Pr ocedure of China, criminal cases by foreigners were heard by the 
middle level People's Court.  Pursuant to Article 23 of the Law on Criminal Lawsuits of China, the 
upper level People's Court could, if necessary, hear  the case which should be heard by a court on a 
lower level; if the court on the lower level regarded  the case as extremely serious, it could request to 
transfer the case to an upper level People's Court.   
71. Article 7 of the General Administration of Customs Notice No. 742 of 1998 had stipulated 
that, once the People's Procuratorate thought that there was enough evidence for a suspicion of smuggling and cases should be heard by the lowest le vel People's Court, the People's Porcuratorate 
could sue the case at the local intermediate People 's Court according to Article 23 of the Law of 
Criminal Procedure.  This meant that it was the in termediate People's Court that would hear part of 
the IPR criminal cases concerning accusations of smug gling.  Investigations conducted last year by 
the concerned bodies of the Supreme People's Court had shed some light on this issue.  However, given the complexity of responsibilities within diff erent authorities, the issue whether the hearing 
level of IPR criminal cases should be adjusted, required more research.  
72. Turning to customs border enforcement, he sa id that at present, measures taken by the 
General Administration of Customs to protect IPR in cluded establishing more laws and regulations on 
IPR protection, training more enforcers of GCA, strengthening cooperation with right holders, 
participating more in cooperation and communicati on with foreign counterparts, and employing more IP/C/34 
Page 14  
 
advanced technology to find more pirated produc ts.  All these measures had proven effective to 
prohibit exportation and importation of pirated goods.   
73. According to old regulations, once the consigner or the consignee of the goods apply to the 
Customs for dissension on their goods that are susp ected of piracy, the Customs could no longer 
conduct an investigation on whether the product was pirated or not.  However, a new regulation 
stipulated that, in response to an application from right holders, once the Customs had found products 
suspected of piracy, the goods would be detained by the Customs, no matter whether the consigner or 
the consignee filed to the Customs for dissension.  The Customs could conduct investigations on 
whether the goods were pirated or no t.  Therefore, the enforcement by the Customs was strengthened 
while efficiency of enforcement was improved.   
74. In a passive protection mode, right holders would have to pay a deposit equivalent to the 
worth of the products, but in an initiative protectio n mode by the Customs of China, the Implementing 
Rules of GCA stipulated, firstly, that deposit equivalent to the worth of the goods had to be paid if the 
goods were worth less then 20,000 RMB;  secondly, th at a deposit equivalent to half of the worth of 
the goods had to be paid if the goods were worth between 20,000 and 200,000 RMB, with the deposit being no less then 20,000 RMB;  thirdly, that a deposit of 100,000 RMB had to be paid if the goods were worth more then 200,000 RMB.  In either mode, right holders could choose to pay the deposit in 
cash or to show the Customs the insurance letter provi ded by a bank or a financial organization other 
than a bank.   
75. According to the law, only the consigner or th e consignee of the imported or the exported 
goods were subject to Customs administration.  Therefore, the Customs could not extend its 
jurisdiction to other companies involved in piracy.  However, in real practice, Customs would provide 
the information on the detained goods to the ri ght holder and concerned authorities of the 
administrative enforcement.  The right holder an d the concerned authorities of the administrative 
enforcement could exercise punishment on the companies involved in piracy on the basis of the 
information provided by the Customs.  From 2001 to 2003, there had been altogether 5,000 cases where the Chinese Customs had exercised protection measures, while in 1,700 of these cases pirated products had been found.  The value of the confiscated products had been 198m RMB. 
76. Customs enforcement was categorized as admi nistrative enforcement.  The products had 
already been deemed by the Customs as pirate d and the Customs would exercise administrative 
punishment to the violator, including confiscating goods and forfeiture.  Since 1996, there had been 
5,800 cases where the Customs had exercised administ rative punishment to violators.  Therefore, it 
was unnecessary for the Customs to f ile an administrative lawsuit in IP R cases.  As for civil lawsuits, 
it had to be filed by the right holder to the court.  In criminal lawsuits, as there had not been clear 
prescriptions on criminal obligations for piracy in exportation and importation, neither were there any 
judicial interpretations, the Customs so far had not tr ansferred the cases for criminal obligations.     
77. In recent years, cooperation in IPR enfor cement between the Chinese Customs and the 
international community had been strengthened.  Statistics showed that, since 2000, by joint 
enforcement with the Customs of Hong Kong, China,  the Chinese Customs had dealt with more than 
200 IPR cases where the information had been prov ided by the Asean-Pacific RILO of the WCO. 
78. Regarding the cost burden for right holders for infringing products that had been stopped at 
the border, he said that it was in conformity with the present situation in China to let the right holder 
pay the storage fee and the Chinese Customs had realized that this practice was impeding IPR 
protection.  However, it had to be admitted that it was unaffordable for the government to solve this 
problem.  Therefore, with the right holder unde rtaking part of the financial burden of the 
counterfeiting actions, the enforcement by competen t authorities was facilitated in a sense.  The new 
regulation and its implementation stipulated clearly  the investigating period  and the period to deal 
with examining the product.  According to this re gulation, the pendency of customs clearance would IP/C/34 
Page 15 
 
 
not be long.  Therefore, the storage fee for products  would be reduced shortly and finally right holders 
would undertake the charges concerned.  Pursuant to the new regulation, once the suspected goods 
were determined as piracy, IPR right holders could take the storage fee and concerned charges as part 
of the fees to stop piracy which the right holder could request the violator to compensate for.  
Therefore, the right holder only paid the deposit temporarily and could be compensated by way of 
repayment from the violator.   
79. Regarding confiscated goods, he sa id that if these were all to be destroyed, it would cause not 
only waste of natural resources but also environmen tal pollution.  Therefore,  the Customs would sell 
such products that could be reutilized at auction to make full use them.  Meanwhile, pirated indicators 
on a product would be erased to protect the interests of the right holder.  So far, the implementation of 
the regulation was satisfactory so that no revision to the regulation would be made. 
80. The representative of Japan  thanked the Chinese delegation for its comprehensive statement.  
He said that, at the transitional review in 2002 and 2003, his delegation had raised questions regarding 
the "further improvement of enforcement in judici al procedures", "patent examination procedures", 
and other issues.  He said that his delegation ap preciated the fact that the Chinese Government had 
made considerable efforts to improve its intellectual property protection in response to these questions 
by, for example, drafting new judicial interpretation on criminal thresholds, and launching a 
nationwide campaign to step up its protection of intellectual property rights. 
81. He said that, in spite of such efforts, it appeared that China's intellectual property protection 
and enforcement was still insufficient in the light of  the high level of counterfeiting and piracy that 
continued to exist in China.  In document IP/C /W/430 submitted by the Japanese delegation, the 
following four issues had been recognized as highly important: "active pursuit of criminal 
prosecutions", "strengthening of sanctions through alteration of criminal prosecution standards", 
"pendency of patent examinations", and "preventi on of misappropriated appl ications", about all of 
which the Japanese industry had serious concerns.  He  said that due to time constraints, China might 
not be able to prepare detailed responses to all the questions immediately, but his delegation would greatly appreciate China's providing such responses through future discussion. 
82. The representative of the United States
 expressed her appreciation of China's answers to 
Members' questions.  China deserved recognition for the extensive IPR-related legislative changes it had made at the time of accession.  The United States also appreciated China's efforts to improve its 
IPR enforcement and protection environment, includi ng the growth of China's Trademark Office and 
Patent Office and the increasing dockets of the Chinese courts and enforcement agencies.  Under the 
leadership of Vice Premier Wu Yi, China had committed to address a number of problems in its IPR 
regime and to significantly reduce IPR infringe ment levels. She said that China had announced 
various action plans in this regard, only some of which had been made publicly available to date. The 
United States was watching China's follow-through on these commitments closely. 
83. She said that, as China's own official reports had noted, IPR infringement in China was 
rampant and the magnitude of IPR infringement in China was harming the interests of right holders 
not only in China but around the world. China's increasing exports of counterfeit and pirated goods 
posed dangers to consumers throughout the developed and developing world.  In light of China's 
obligations under the TRIPS Agreement to provid e adequate and effective IPR enforcement, the 
United States noted a number of continuing problems.  Administrative enforcement was weak. Administrative enforcement processes typically afford ed no meaningful relief to right holders:  fines 
were non-deterrent; the decision-making process was not transparent; and too few administrative 
cases were referred to criminal prosecution.  As an example of this problem, she said that while new 
border measures implemented earlier this year had provided for some improvements, they had 
significantly reduced the level of customs penalties from 300% to 30% of value.  China's civil, 
administrative and criminal enforcement systems continued to suffer from local protectionism.  She said that structural changes, such as providing an immediate right of appeal to
 non-local courts or IP/C/34 
Page 16  
 
agencies, requiring mandatory penalties, and instit uting mandatory sentencing practices would help 
address these problems.  Instituti onal challenges remained.  Although China had created an expert 
civil IPR court, its criminal and administrative courts lacked the same level of expertise in IPR 
matters. 
84. In addition, she said, the United States had serious concerns about certain aspects of China's 
IPR legal framework, although China had done much legislative work at the time of its WTO 
accession.  In particular, China's Criminal Law raised serious TRIPS issues by requiring a showing of 
profits for certain types of offences;  failing to address commercial-scale trafficking of infringing 
goods;  and criminalizing counterfeiting only when the infringing mark was "identical" rather than 
confusingly similar.  She said that the United St ates appreciated China's commitment to issue a 
judicial interpretation by the end of this year to immediately address these issues, and was looking 
forward to its implementation. 
85. However, she said that the United States greatl y regretted that China had not released a draft 
of the long-awaited criminal judicial interpretation for widespread public comment.  Both the US 
Government and right holders had waited anxiously for the opportunity to comment on the draft prior to its final promulgation.  Last year at the TRIPS Council, China had pledged to increase transparency 
by making judicial interpretations on IPR matters available for public comment.  While the 
United States was pleased with th e positive trend in this regard and noted the release during the 
present week of three draft civil IPR-related judicial interpretation s for public comment, nevertheless 
the drafting of this critical criminal judicial in terpretation had been opaqu e with the draft being 
disclosed only to selected entities and industry associations. 
86. She said that the United States appreciated th at China had committed in the near term to 
address some of the problems highlighted above and looked forward to real results from China's 
efforts. The coming months would be a critical period, particularly in the light of the issuance and 
implementation of the judicial interpretation and implementation of the IPR action plans.  The United 
States looked forward to continuing efforts on issues  that remained of concern to both countries as 
well as to other Members, with a view towards improving the overall IPR enforcement environment in China. 
87. With respect to the specific answers provided by the Chinese delegation, she said that the 
United States appreciated very much the informa tion provided on administrative enforcement cases.  
As a matter of clarification, she requested the Ch inese delegation to confirm that, under Chinese law, 
there was no obligation requiring administrative d ecisions in IPR cases to be issued in writing. 
88. The representative of the European Communities
 thanked China for updating the TRIPS 
Council on its efforts to improve IP protection in China.  He said that his delegation was taking note 
with satisfaction of the progress that had been ma de so far and of positive on-going initiatives to 
tackle the problems. However, the European Co mmunities remained concerned by the level of 
counterfeiting in China and urged China to continue  its efforts towards an effective IP enforcement 
system.  In this respect, his delegation was comm itted to working with the Chinese authorities to 
improve the situation.  With regard to the questions that had been submitted very recently by his 
delegation, he said that his delegation would apprec iate it if China could respond to them as soon as 
possible. 
89. The representative of Australia  thanked China for the very comprehensive and informative 
responses to the many questions posed to them.  He said that Australia attach ed particular importance 
to its bilateral cooperation with China in intelle ctual property matters and was looking forward to 
continuing to work closely with China to the mutual benefit of both countries on intellectual property 
issues.   IP/C/34 
Page 17 
 
 
90. The representative of Chinese Taipei  thanked China for its statement and the information 
provided by its delegation.  Although Chinese Taipei had not submitted questions in writing in 
advance, his delegation shared some of the views regarding intellectual property issues mentioned by 
other delegations.  His delegation attached great importance to the transparency requirement under 
Article 63.1 of the TRIPS Agreement.  Chinese Ta ipei was of the belief that transparency of 
administrative rulings as well as laws and regulations  in the national system was of crucial importance 
both to local and foreign IP owners.  In this light , he wished to draw attention to the issue of well-
known marks.  According to China's recent communication in document IP/Q/CHN/1/Add.1, dated 
9 June 2004, the State Administration for Industry and Commerce (SAIC) was revising the "Rules on 
the Determination and Protection of Well-Know Marks".  He said that his delegation would 
appreciate it if China could advise if there were any developments in this regard.  In addition, he was 
interested in having a list of well-known marks curren tly applicable in China for reference.  He asked 
if the Chinese delegation could advise where to locat e such a list if it was publicly available on the 
Internet.  In conclusion, he said that his delegation had noticed that China had already made good 
progress in several areas of intelle ctual property and would like to encourage China to continue in its 
relentless endeavour in the time ahead. 
91. In response to the remarks made by other delegations, the representative of China  said that, 
with regard to the written questions posed by th e European Communities on 26 November 2004, most 
of these concerns had already b een covered by China's initial statement.  His delegation had given 
answers regarding the Chinese intention to join the WIPO 1996 Internet Treaties and had pointed out 
that China had never indicated that it would join th ese treaties before the end of 2005 and had said 
nothing about a completion of the draft for the Intern et-related implementing rules before the end of 
2004.   With regard to the Copyright Law of China, the measures on the protection of the right of 
communication through information networks had al ready been put onto the 2005 legislative agenda 
of the State Council and this task was currently being carried out in a smooth and orderly way.   
Regarding the protection of the rights of producers of sound recordings, he said that the Chinese 
copyright legislation was totally consistent with the TRIPS Agreem ent.  Regarding the rules on 
collecting societies, he said that these would be  made available by the Chinese delegation to the 
European Communities and any other Members con cerned once the rules had been ratified.  In 
reaction to prevalent interests and requests from industries, local communities and other sectors, 
SAPO of China was engaging in a preliminary asse ssment of the national IP strategy.  Regarding the 
follow-up question from the delegati on of the United States, he said that his delegation would discuss 
with experts in the capital and would hopefully be  able to come back with further information. 
92. Turning to the preparation of the TRIPS Council's report to the General Council, the 
Chairman  suggested that, given that the TRIPS Council would not have another meeting before the 
General Council's next meeting scheduled for 13  and 14 December 2004, the TRIPS Council agree 
that that he, acting on his own responsibility, prepar e a brief and factual report to the General Council.  
The content of the cover page to the report would be similar to that submitted by the TRIPS Council 
in 2003, and the part of the minutes of the meeting reflecting the discussions held under this agenda 
item would be attached.  
93. The Council took note  of the statements made and agreed  to proceed with the preparation of 
the report as suggested. 
__________