WORLD TRADE  
ORGANIZATION   
IP/C/60 
17 November 2011  
 
(11-5973) 
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 24 and 25 October 2011, the C ouncil undertook the fina l 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 (W T/L/432), and agreed that the Chair, acting on his 
own responsibility, would prepare a brief, factua l 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.  This submission was circulated in document IP/C/W/556. 
3. In a communication dated 20 October 2011, China provided information as specified in 
Annex 1A to the Protocol.  This submis sion was circulated as document IP/C/W/564. 
4. The annex to this report contains the relevant  part of the minutes of the Council's October 
meeting
1 that reflects the statements made under the review.  
_______________ 
 
                                                      
1 To be circulated as IP/C/M/67. IP/C/60 
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  ANNEX 
 
Item C of the minutes of the Council's meeting of 24-25 October 2011 
to be circulated as IP/C/M/672 
 
 
1. The Chair recalled that paragraph 18 of Chin a's Protocol on Accessions required the TRIPS 
Council to review the implementation by China of  the TRIPS Agreement each year for eight years 
and report the results of such review promptly to the General Council.  Thereafter there was to be a 
final review in year ten, which was the year of the present meeting.  He further recalled that 
paragraph 18 required China to provide relevant information in cluding information specified in 
Annex 1A, to the TRIPS Council in advance of th e review.  The information submitted by China 
pursuant to this requirement, dated 20 October 2011 , had been circulated as document IP/C/W/564.  
Questions in connection with the review had been submitted by Japan (document IP/C/W/556). 
2. The representative of Japan said that his dele gation appreciated China's efforts to address 
intellectual property problems through various measu res including the development of new laws, but 
that counterfeiting and piracy remained a significant problem. 
Counterfeiting and Piracy 
3. As a large number of Japanese companies conti nued to face counterfeit and piracy problems 
in China hoped that the Chinese Government would make further efforts to enhance intellectual 
property rights protection and to provide effectiv e enforcement against any act of infringement of 
IPRs in China.  His delegation was particularly co ncerned with three issues:  first, the disposal by 
administrative authorities of counterfeiting goods outside the channel of commerce did not work in an effective manner (IP/C/W/556: paragraph 4).  Second, the possibility of a judicial authority ordering a 
party to produce evidence, that was prescribed by Article 43.1 of the TRIPS Agreement, was not used 
in an appropriate manner (IP/C/W/556:   paragraph 3).  Lastly, thresholds for the criminal prosecution 
of counterfeiting cases were not applied in an effective manner, especially in cases where an infringer 
kept the amount in question below a legal threshold for criminal enforcement by destroying the 
evidence (IP/C/W/556: paragraph 5). 
Technology Transfer Contracts 
4. He said that a further concern related to China's Regulation on the Administration of Import 
and Export of Technology was the discriminatory natu re of clauses for Chinese and foreign licensors 
(IP/C/W/556: paragraph 7) and discretionary restricti ons applied by administrative officers to royalty 
provisions in contracts (IP/C/W/556: paragraph 8).  His delegation believed that these measures were 
contrary to the principle of freedom to license by intellectual property right holders. 
Government Procurement 
5. His delegation further maintained a conti nued interested in the National Indigenous 
Innovation Product Accreditation Syst em and its relation to govern ment procurement, and was 
looking forward to receiving any revised version of that System (IP/C/W/556: paragraph 11). 
6. The representative of the United States said that fo r this final transitional review of China his 
delegation wished to share with Members its observations on China's first 10 years of WTO 
membership. 
                                                      
2 The paragraph numbering of this excerpt will not co rrespond with that of the minutes of the TRIPS 
Council meeting but has been included for the convenience of users.  IP/C/60 
 Page 3 
 
 
7. He recalled that the transitional review mech anism (TRM) had been created largely because 
China had joined the WTO before it had revised  or adopted laws and regulations necessary to 
implement its WTO obligations, and had been allo wed a variety of transition periods before full 
implementation.  The annual TRM meetings ther efore had provided Members with opportunities to 
review with China, in a multilateral setting, the efforts it had taken to implement specific 
commitments made in its Protocol of Accession, as  well as obligations it had assumed under the many 
agreements that make up the WTO Agreement and its efforts to comply with those obligations. 
8. Since the beginning of the transitional reviews,  he said that the focus of the reviews had 
changed over time.  While for the first five y ears of China's WTO membership the transitional 
reviews had focused predominantly on the scheduled  phase-in of key commitments that China had 
made in its Protocol of Accession, the focus of th e TRM had shifted and had focused more on China's 
compliance with its full range of WTO obliga tions, once the phase-in period had ended.   
9. During the initial phase-in period, China had im plemented a set of sweeping commitments, 
including reducing tariffs, eliminating non-tariff barrier s that had been identified in its working party 
report, and had made legal improvements in IPR pr otections and in transparency.  These actions had 
deepened China's integration in to the international trading system, and had facilitated and 
strengthened China's rule of law and economic re form.  Trade and investment had also expanded 
dramatically between China and its  many trading partners.      
10. He said that, since its accession, China had put in place a framework of laws and regulations 
which were aimed at protecting the IPR of domestic and foreign right holders, as was required by the 
TRIPS Agreement.  However, some critical reform s were still needed in a few areas such as: the 
further improvement of China's measures for the protection of copyright and trademarks in the context 
of the Internet, correction of continuing deficienci es in China's criminal IPR enforcement measures, 
and the provision of rem uneration to authors for the broadcast  of their works that had occurred 
between 2001 and 2009 - the period when Chin a had finally set default licensing rates for 
broadcasting recorded works. 
11. His delegation was also concerned about the ex tent to which China had provided effective 
protection against unfair commercial use and unauthori zed disclosure of undisclosed test or other data 
generated to obtain marketing approval for pharmace utical products.  In its accession protocol, China 
had agreed to provide six years of protection agai nst unfair commercial use for undisclosed test or 
other data that had been submitted to authorities in  support of applications for marketing approval of 
pharmaceutical and agricultural chemical products wh ich had utilized new chemical entities.  This 
protection was to prevent any person other than th e original applicant from relying on the submitted 
data for subsequent approvals for at least six year s from marketing approval of the original product.  
He said that examples of marketing approval granted to applications for follow-on products prior  to 
the expiration of the six-year period, and in so me cases even before approval of the originator 
product, indicated that further work needed to be do ne to ensure consistent and effective application 
of this obligation.  The delegation looked forward to continued work with China on this and related 
matters.  
12. While China's laws on the books had been extensively overhauled to better reflect 
international standards for IPR protection, he said the inability or lack of political will in China to 
enforce these laws and to deter continued IP theft ha d led to sustained and unacceptably high levels of 
retail and wholesale counterfeiting, online piracy, and so ftware theft with severe adverse effects in the 
United States and third-country markets to whic h Chinese IPR-infringing goods were exported.  
Widespread IPR infringement continued to affect products, brands, and tec hnologies of a wide range 
of industries, which included movies, music, publishing, entertainment and business software, 
apparel, athletic footwear, tex tile fabrics and floor coverings, c onsumer goods, chemicals, electrical 
equipment, industrial products, information technology, and clean energy technology, among many 
others.    IP/C/60 
Page 4  
 
  13. He said that the United States was, however, en couraged by focused efforts to improve IPR 
enforcement in China in the past year.  His dele gation had closely followed the efforts made under 
China's "Special Campaign on Combating IPR Infringement and Manufacture and Sales of 
Counterfeiting and Shoddy Commodities" (Special  Campaign), and he believed that the new 
coordination and leadership structure which ha d been developed for the Special Campaign had 
enhanced the effectiveness of IPR enforcement dur ing the period of the campaign.  The delegation 
urged China to create a high-level management team that could drive lasting  improvements in IPR 
enforcement by making permanent the temporary lead ership structure created to manage the Special 
Campaign, including the key role of the Vice Premie r.  Institutionalizing this structure would give 
greater credibility to China's efforts to make a sust ained, long-term improvement in IPR enforcement. 
14. As a result of the Special Campaign, his de legation understood, several websites and online 
portals had been shut down, and three website operators had been arrested, convicted, and sentenced 
to prison terms and assessed significant fines.  Th e United States urged China to sustain its work on 
stemming piracy over the Internet.  With respect to  the use of the Internet to distribute counterfeits, 
the United States noted several positive developments in the past year, including new measures issued 
by the State Administration of Industry and Commerce that required Internet Service Providers to verify the identity of online traders and to take "n ecessary measures to protect registered trademarks."  
Reports indicating that local Administrations of Industry and Commerce (AICs) had demonstrated 
greater willingness to intervene directly against online advertisements of  counterfeit and pirated 
products were also encouraging. 
15. To effectively stem the manufacture of count erfeits, the United States urged the Chinese 
Government to ensure that equi pment used to manufacture counte rfeit products was also seized and 
destroyed, as counterfeiters could otherwise r esume their operations as soon as law enforcement 
officers had left their premises.  In addition, he  said, it was important for China to permit direct 
acceptance of serious IPR infringement cases by the Public Security Bureau (PSB) which could 
search and arrest counterfeiters, while administrativ e agencies such as the local AICs could only seize 
counterfeits.  Following the Special Campaign, the PSB should be given the authority to directly 
accept all cases involving manufacturers of  counterfeit and pirated products.   
16. In addition to the need for significant progress to fight counterfeiting and piracy, effective 
IPR enforcement in China also required attention to  the protection and enforcement of patents, trade 
secrets and other IP rights.  For example, the United States was troubled by several recent media 
reports of major cases of trade secret theft which had affected U.S. firms doing business in China.  His 
delegation was further concerned about the enforcem ent implications of a range of challenges which 
had affected patent quality in China.  Patents that were of low quality, or unexamined, or both, could 
pose obstacles to Chinese and foreign innovators who sought to protect and enforce rights in 
legitimate inventions.  The delegate stated that e ffective enforcement of patents and trade secrets was 
not only key to the success of foreign companies, but was an essential for a business climate 
necessary to support investment from the kind of innovative industries that China would hope to 
attract and build. 
17. He said that China's goal of becoming an innovative society by fostering "indigenous 
innovation" had created a troubling trend toward in creased discriminatory policies which were aimed 
at coercing technology transfer. While his delegation recognised the critical role of innovation in the 
development and the improvement of  living standards in the United States and China, he remained 
concerned with regard to China's innovation-related industrial policies that had discriminated against 
or otherwise disadvantaged US exports or US inv estors and their investments.  The United States had 
been following the development of China's indi genous innovation and othe r intellectual property-
related industrial policies and had pa id particularly close attention to China's policies that required or 
compelled US parties to transfer their IPR to Chines e parties or to Chinese subsidiaries of US firms.  
Chinese regulations, rules and other regulatory me asures frequently called for technology transfer,  IP/C/60 
 Page 5 
 
 
and in certain cases, conditioned, or proposed to c ondition, the eligibility for government benefits or 
preferences on intellectual property being owned or developed in China, or being licensed, in some 
cases exclusively, to a Chinese party. 
18. In view of the IPR-related developments ove r the past ten years and looking towards the 
future he said that that China's legal framework for the protection and enforcement of IPR had been 
improved, but there were still many areas where fu rther progress was required.  While there was a 
growing awareness in China of the critical role of IPR protection and enforcement to China's long-
term economic developm ent, it was important that this awarenes s be translated into sustained efforts 
to protect and enforce IPRs of both domestic and fore ign right holders.  It was equally important that 
China's desire to develop an innovative and IP -intensive economy did not drive policies that 
discriminated against foreign IPR holders, either by according preferences to firms with indigenous 
IPRs and thereby limiting participation by fore ign IPR holders, or by implementing government 
policies to compel technology transfer or terms a nd conditions of IPR licenses, which should instead 
be left to the commercial considerations of th e parties without undue government interference. 
19. The United States would continue to work with Ch ina in the future, both bilaterally and at the 
WTO, on IPR protection and enforcement strategi es, innovation policies, and a range of other 
important IPR-related matters to ensure that Chin a would fully comply with its WTO obligations, to 
the benefit of the United States, China and their trading partners. 
20. The representative for the European Union said that his delegation acknowledged China's 
efforts and improvements in the protection of intell ectual property rights such as Special Campaign on 
the Enforcement of IPRs or the removal of certa in circulars on indigenous innovation.  Since 2004, 
the European Union and China had established a solid cooperation on intellectual property issues 
through, in particular, an intellectual property dial ogue and an intellectual property working group.  IP 
was a topic that was always raised in the global economic dialogues or during the annual EU-China 
summits.   
21. He said that the European Union's cooperation with China had addressed a wide range of IPR 
issues and progress had been noted in a number of those areas.  In particular, China had made concrete efforts to improve IPR protection and en forcement.  Despite these efforts, European 
businesses continued to face serious intellectual prop erty problems in China. Further improvement 
was still needed, especially regarding the specificities of the digital world.  The lack of effective 
protection and enforcement of IP in China conti nued to undermine the European Union's legitimate 
interests in areas such as high tech, quality and bran d name products.  IP rights violations remained a 
considerable problem for European businesses, with  85 per cent of all counterfeit goods seized at the 
European borders in 2010 coming from China, an d seven in ten European businesses operating in 
China reporting that they had been victim s of intellectual property violations.   
22. He said that access to the Ch inese enforcement system, in particular, remained complicated 
and costly for foreign companies, notably small and medium-sized industries.  In addition, apart from 
the concerns mentioned by the United States, th e legalisation and notarisation requirements for 
litigation, the high thresholds for criminal enforcemen t and the failure of sanctions to pose a deterrent 
remained areas of grave concern for his delegation.  
23. With respect to the Trademark Law, he said th at the current revision process should be used 
to make further improvements.  The European Union was submitting comments on the latest Chinese 
draft law, which included comments on the rela tionship between trademarks and geographical 
indications, and remained concerned with the practi ce of bad faith registrations in China by Chinese 
owners of European trademarks.   
24. Further improvements should also be brought to the Copyright Law during the announced 
revision process.  The European Union continued to consider that the introd uction of broa dcasting and IP/C/60 
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  public performance rights for sound recording prod ucers and performers in the Chinese Copyright 
Law was a necessary and welcome step.   
25. He said that the Chinese patent system, c overing invention patents, utility models and 
industrial designs, was growing fast and had reach ed the accumulated number of five million patent 
applications in March 2009, with domestic appli cations growing 20 per cent faster than foreign 
applications.  But the merit of patent registrati on policy should not be measured only by the number 
of patents registered per inhabitant, but should rath er focus on the quality of the rights granted.  The 
European Union was working together with China in this area, putting together a task force on patent 
quality, and his delegation hoped to see benefits from this joint exercise soon.   
26. His delegation was also concerned by non-vol untary technology transfers through excessive 
standardization requirements, the requirement to disclose trade or business secrets, or other similar policies.  The so-called indigenous innovation issu e had also been a major concern vis-à-vis China 
over the last years, but the European Union be lieved that a breakthrough had been reached in 
December 2010, when China had indicated that it would not discriminate between products 
manufactured in China by foreign invested ente rprises and those manufactured by Chinese domestic 
enterprises.  He said it would be important now to monitor the implementation of this commitment both at the national as well as at the provincial level, and  that this issue would remain very much at 
the top of European bilateral and multilateral discuss ions with China.  His delegation would continue 
to work together with China with the aim of pu tting in place an effective system of intellectual 
property protection and enforcement. 
27. The representative of India said that his de legation attached great importance to the 
transitional review under Section 18 of the Protocol on Accession of the People's Republic of China.  
With respect to China's rules prohib iting the grant of patent rights in respect of scientific discoveries, 
his delegation wished to request clarification of the meaning of the term "scientific discoveries" in 
Articles 5 and 25 of the Chinese Patent Law. 
28. The representative of Korea said that the TRM ha d been a useful mechanism that had helped 
to provide transparency in Ch ina's IPR regime, and had allowe d Members to better understand and 
assess China's progress in implementing and complying with its WTO obligations. 
29. His delegation noted in particular  the progress that had been made  by China in the area of IPR 
during recent years, and appreciated China's con tinuous efforts to improve IPR enforcement and 
protection.  It was his delegation's understanding that China had developed a detailed national IPR 
strategy which reflected its commitment to address IP R-related issues at the highest levels of China's 
Government.  China's positive initiatives in IPR legisl ation included the action plan for IPR protection 
for 2008, the National Intellectual Property Strate gy, and the revision of its copyright law in 
February 2011, and his delegati on looked forward to seeing China c ontinuously pursue and intensify 
its efforts for an effective IP protection and enforcement system. 
30. Despite China's efforts, he sai d, Korean industries had continued to report high rates of 
copyright infringement within China and had requ ested further improvements of copyright protection 
measures by China.  In particular, it had been re quested that an adequate system of equitable 
remuneration to be paid to performers and prod ucers of phonograms for commercial uses would be 
introduced.  Given the fact that in 2007 China ha d acceded to WPPT which provided that contracting 
Parties may provide for remuneration for broa dcasting and communication to the public, his 
delegation looked forward to further efforts by  China to ensure reasonable compensation to 
performers and producers. 
31. The representative of Canada welcomed the ma ny positive steps and improvements that had 
been outlined in the communication, and noted the recent large-scale enforcement operations against  IP/C/60 
 Page 7 
 
 
counterfeit products, the promotion of the use of  genuine software by both the government and 
enterprises, as well as efforts to enhance the tran sparency of the intellectual property rights 
adjudication process. 
32. Her delegation appreciated challenges that Chin a's size had posed in enforcing intellectual 
property rights, and was therefore pleased to note that China communication reported a high level of co-operation between government ministries and agencies at the central, provincial and local levels, in 
addition to the coordinated partic ipation of police departments and the judicial system.  Canada 
greatly valued China's participation in the Council as  well as their bilateral discussions on intellectual 
property matters, and looked forward to seeing furt her similar reports of continued improvements in 
China's administration and enforcemen t of intellectual property rights. 
33. The representative of Mexico said that his delegation wished to express some concerns 
relating to paragraphs 256 and 342 of  the Report of the Working Party on the accession of China.  He 
said that while China had made significant progress in the area of IPRs by having put in place national plans and strategies, there remained concerns about  the conformity of China's legislation with its 
TRIPS obligations, specifically with Articles 22, 23  and 24 of eth TRIPS Agreement.  The lack of 
protection for geographical indications  and denominations of origin ga ve rise to serious concerns for 
Mexico as this could affect Mexican products protected  by appellations of origin such as, for example, 
TEQUILA and MEZCAL. 
34. He said that his delegation had detected c ounterfeit beverages that were not TEQUILA and 
which falsely indicated Mexico as their origin. A further case was the counterfeiting of the trademark 
"CORONA", which had still not been settled.  "C ERONO", a Mexican beer, was produced by Beijing 
Cerono Trade Limited Company, using bottles that were labelled with logos , lettering, colours and 
graphics identical to those used for the Mexican beverage. 
35. In other WTO fora, his delegation had also expressed its concern over China's lack of 
compliance with the Memorandum of Understanding which had been signed by Mexico as part of 
China's WTO accession process.  In that Me morandum China had committed to protect the 
denominations of origin of TEQUILA and MEZCAL, a nd to limit their use to products that originated 
from Mexico or from specific regions of the c ountry and which had been manufactured under the 
rules applicable to these beverages.  China had recently notified to the Committee on Sanitary and 
Phytosanitary Measures a draft regulation which reduced the maximum level of methanol for 
alcoholic beverages in a category which would pr event the commercialization of some types of 
TEQUILA and MEZCAL in the Chinese market.  Hi s delegation believed that this would violate 
obligations which China had assumed upon accession w ith regard to these two Mexican products. 
36. The representative of China said that his delegation had submitted the information required in 
the Annex 1A of its Accession Protocol in document  IP/C/W/564 which, he hoped, would help keep 
Members up to date with the latest development in both the legislative work and the enforcement 
efforts in China regarding the protection of intell ectual property rights.  His delegation had prepared 
detailed responses to the questions from Japan and w ould also touch on some of the issues raised by 
other previous speakers.  
Trademarks 
37. With respect to a service trademark which retailers  would use in stores, he said that the Nice 
Agreement Concerning the International Classificatio n of Goods and Services for the Purpose of the 
Registration of Marks ("Nice Agreement"), in his de legation's understanding, did not include the retail 
industry in the scope of service trademark protecti on, as what was being provided by retailers to 
consumers were tangible commodities rather than serv ices.  Therefore, like other members of the Nice 
Agreement, China did not accept serv ice trademarks applications for retail services for the time being, 
but was currently examining whether or not such applications for regist ration could be accepted. IP/C/60 
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  38. With respect to third party access to trademark documents, he said that documents concerning 
administrative decisions, the status of trademarks under review, or the opposition procedure, could be 
viewed at the official website of the trademark authorities ( http://www.ctmo.gov.cn ).  He specified, 
however, that the trademark review decisions or the rulings on trademark opposition itself were not 
yet open to the general public.  In the cases of review and adjudication of trademarks, since 
administrative decisions involved business informa tion of the parties to the case, the Trademark 
Review and Adjudication Board, in dealing with  applications of third party access to relevant 
administrative decisions concerning a trademark, would examine whether such access would damage 
the interests of the parties to the case.   Only if the third party had obta ined the consent of the parties to 
the case, or if there were other circumstances in wh ich the interests of the parties to the case would 
not be affected, would the Board allow the thir d party to consult an administrative decision. 
39. As to documents in judicial procedures, he sai d that judgments were pronounced in public by 
the Courts on all cases, and judgment documents including in trademark cases were open to the 
general public.  Any third party could view tradem ark-related judicial documents at the website 
sponsored by the IPR Court of the Supreme People's Court ( http://ipr.chinacourt.org ), in addition to 
other websites for judicial documents sponsored by lo cal Courts.  For documents that had not yet been 
uploaded to the Internet, there were othe r channels available for consultation. 
Enforcement  
40. With regard to the consistency of the Civil Procedure Law of the People's Republic of China 
with Article 43 of TRIPS Agreement, he said that in the relevant judicial interpretations of the 
Supreme People's Court, namely the Several Pr ovisions of the Supreme People's Court on the 
Evidence for Civil Actions, Article 17 stated that "if one of the following requirements is satisfied, a 
party concerned and his agent ad litem may apply to the Court for investigating and collecting 
evidence, the requirements are (1) the evidence under the application for investigation and collection 
belongs to documentary materials that shall be kept by the relevant authority of the State and must be 
transferred by the Court ex officio ;  (2) the evidence belongs to materials concerning State secrets, 
commercial secrets, or individual privacy;  or (3) the evidence belongs to other materials that cannot 
be collected by the party concerned and his agent ad litem  themselves due to impersonal cause."  
Therefore, if "the document held by the opposition party" in question met any of these requirements, 
an application could be made to the Court for investigation and evidence collection.  Otherwise, he 
said, the Court would refuse such an application. 
41. In relation to criminal procedures for inves tigating and handling IPR criminal cases, he said 
that according to the Criminal Procedure Law of th e People's Republic of China, the police authority 
was to keep for examination any property and valuab ly items of the criminal suspects that had been 
seized, as well as the fruits accrued therefrom.  Thin gs that served as tangible evidence were to be 
transferred together with the case.  After a judgmen t rendered by the Court had become effective, the 
police authority was to handle the items involved in  the case in line with the judgment.  In law 
enforcement practices, the police authorities follo wed these requirements seriously and destroyed a 
large amount of IPR-infringing products. 
42. With respect to administrative la w enforcement, he said that Article 53 of the Patent Law of 
the People's Republic of China provided that the Administrative Author ity for Industry and 
Commerce could, upon having determined that an in fringement had taken place, order the infringer to 
immediately stop the infringing act, confiscate and destroy the infringing goods and any implements that had been specifically used to manufacture th e infringing goods and counterfeit representations of 
the registered trademark, and impose a fine. 
43. With regard to the issue that a person carrying out IPR infringements may escape criminal 
punishment by keeping the amount in question below the relevant threshold, has said that at present  IP/C/60 
 Page 9 
 
 
for any one act of trademark or copyright infringeme nt that did not reach the threshold of criminal 
punishment, the infringer could only be held res ponsible under civil liability or administrative 
responsibility to the IPR holders, and the relevant  administrative authorities could investigate and 
handle the case in accordance with th e law.  However, if an infringer had carried out multiple IPR 
infringement acts and had kept the amount of each  infringing act under the statutory threshold of 
criminal law enforcement with the aim of avoidi ng administrative handling or criminal punishment, 
the IPR holder could incur criminal responsibility u nder Article 14 of the Opinions of the Supreme 
People's Court, the Supreme People's Procuratorate and the Ministry of Public Security on Certain Issues of Application of Law in Handling the Criminal Cases of Intellectual Property Rights Infringement, which had been prom ulgated on 11 January 2011.  That  Article provided that "for 
anyone who has carried out multiple IPR infringeme nt acts without administrative or criminal 
punishment, the illegal business amount, illegal pro ceeds or sales amount shall be accumulatively 
calculated.  Anyone who has carried out multiple  IPR infringement acts within 2 years without 
administrative punishment and whose accumulative am ount constitutes a crime shall be convicted and 
punished according to the law, and the period fo r prosecution shall be subject to the relative 
provisions in the Criminal Law without being limited by the aforesaid two-year period." 
44. Regarding repeated IPR crimes, he said that police authorities in China dealt with multiple 
IPR infringement acts in accordance with paragraph 2 of Article 12 of the Interpretation of the 
Supreme People's Court and the Supreme People' s Procuratorate on Issues Concerning the Specific 
Application of Law in Handling Criminal Cases of  Infringement of Intellectual Property Rights, 
which had been issued in 2004.  If such an act reac hed the "criminal threshold" stipulated by relevant 
laws or judicial interpretations and the infringer ha d been suspected of a cr ime, the police authority 
would crack down on such an act.  In the meantime, Article 3 of the Interpretation II of the Supreme 
People's Court and the Supreme Pe ople's Procuratorate on Issues Concerning the Specific Application 
of Law in Handling Criminal Cases of Infringement  of Intellectual Property Rights issued in 2007 
stipulated that suspended sentences generally did not apply to perpetrators of IPR crimes. In addition, 
it was stipulated in Article 65 of the Criminal Law of the People's Republic of China that "if a 
criminal commits another crime punishable by fixe d-term imprisonment or heavier penalty within 
five years after serving his sentence of not less than fixed-term imprisonment or after receiving a 
pardon, he is a recidivist and shall be given a h eavier punishment.  However, this shall not apply to 
cases of negligent crime."  The police authorities ha ve also followed these stipulations when handling 
criminal cases of IPR infringement. 
Regulations on Administration of  Technology Import and Export  
45. Concerning the relationship between certain provi sions in the Regulations on Administration 
of Technology Import and Export and the national tr eatment principle, he said Article 24 of the 
regulation stipulated that "the t echnology supplying party shall ensure  that he or it is the legitimate 
owner of the technology supplied, or one who has the right to assign or license the technology.  
Where the receiving party infringes another person' s lawful rights and interests by using the 
technology supplied by the supplying party, the s upplying party shall bear the liability therefore." 
Such provisions were consistent with Article 349 and Article 353 of the Contract Law of the People's 
Republic of China.  Article 349 stated that the tran sferor in a technological transfer contract should 
guarantee legitimate ownership of the technology provided, and guara ntee the technology provided to 
be complete, without fault, effective, and capable of attaining the contracted objective.  Article 353 
said that the transferor was liable for any infringe ments upon the legitimate rights and interests of 
others that occurred through the exploitation of th e patent or utilization of the technological know-
how by the transferee in compliance with the cont ract.  Consequently, Article 24 of the Regulations 
on Administration of Technology Import and Expo rt was not an obligation imposed only on the 
foreign right holder of technology. 
46. He said that Article 27 of the Regulations  on Administration of Technology Import and 
Export required that "within the term of validity of  a contract for technology import, an achievement IP/C/60 
Page 10  
 
  made in improving the technology c oncerned belongs to the party making the improvement."  As the 
party making the improvement might be either the tran sferee or the transferor, the issue of a foreign 
holder of technology not enjoying national treatment did not exist.  In addition, in accordance with 
Article 2 of the Regulations on Administration of  Technology Import and Export, the criterion for 
judging whether a technology was imported or exported was the cross-boundary transfer rather than the nationality of the transferee or the transferor. 
47. As to whether the Government could interfere w ith contract licensing fees, he said that under 
the Regulations on Administration of Technol ogy Import and Export, imported and exported 
technologies were classified as prohibited, restrict ed, or those that could be imported and exported 
freely.  In relation to the latter category, the c ontract for import or export was only required to be 
registered with the competent authority without s ubstantive examination and there was no provision in 
the regulation to authorise the competent authority  to change licensing fees.  In practice, for 
technologies that could be imported freely, licensing  fees were determined through consultations of 
the parties to the contract.  As long as there ha d been no violation of law, the Chinese government 
would neither interfere nor demand enterpri ses to change prices in the contract.   
48. With respect to the China IPR Protection Ac tion Plan 2011, he said that the competent 
authority would, firstly, draft anti-monopoly guidelin es in regard to the abuse of IPR in line with 
relevant stipulations in China's Foreign Trade Law.   However, as the drafting would take some time 
and relevant studies were on-going, no specific time table for the promulgation of such guidelines had 
been set.  
49. Secondly, to implement the Patent Law of th e People's Republic of China which had been 
newly amended in 2008, the Decision of th e State Council on Amending the Regulations for 
Implementation of the Patent Law of the People' s Republic of China (State Council Decree No.569) 
had been promulgated on 9 January 2010.  The amended regulation had been effective since 
1 February 2010 and had been notified to the WTO, as noted by the Chair at the beginning of the meeting. In this regard, the representative noted the question by India concerning China's Patent Law 
and said that due to the technical nature of the issu e, China could pursue the matter in detail bilaterally 
after the meeting. 
Indigenous Innovation an d Government Procurement 
50. With respect to indigenous innovation and its relationship with government procurement, he 
said that his delegation wished to clarify that th e administrative measure that had raised Members' 
concern, namely the Notice Regarding the Launc h of the National Innovation Product Accreditation 
Work for 2009, issued on 30 October 2009, had b een an invitation for application for accreditation so 
that the products of the applicants could be accr edited as indigenous products.  The purpose of the 
paper had been to encourage the applicants to strengthen their innovation activities.    
51. In April 2010, China's relevant authorities had publicly solicited opinions and comments on 
the draft of the Notice Regarding the Launch of the National Innovation Product Accreditation Work 
for 2010.  In this document, it had been confirme d that products by dom estic and international 
manufacturers would be treated equally. 
52. In June and July 2011, to further confirm th at indigenous innovation policies and preferential 
government procurement treatment we re no longer linked, China's rele vant authorities had issued two 
Notices, according to which implementation of re levant administrative measures, including the 
Administrative Measures on Budgeting for Govern ment Procurement of Indigenous Innovation 
Products and the Trial Measures for Administrati on of the Accreditation of National Indigenous 
Innovation Products, had been terminated.  IP/C/60 
 Page 11 
 
 
53. With respect to the specific case s raised by the delegate of Mexico he urged the Mexican 
Government to contact China bilaterally or through  the Embassy of China for more details, and said 
that he would also send that message back to his capital after the meeting. 
54. In conclusion, his delegation wished to thank all Members for their constant support over the 
course of this transitional review, and their appreciat ion for China's efforts in further strengthening its 
protection of intellectual property rights.  Since its accession to the WTO ten years ago, China had 
fulfilled its tremendous commitments made upon accession, and in this course, as noted in the last 
TPR of China, Members had observed the strong political will of the Chinese government in that 
regard.  With respect to the TRIPS Agreement, China had not only established a sound legislative 
framework, but also an enforcement system that integrated both administrative and judicial measures.  
Another particular achievement was the enhanced aw areness of IPR protection in the whole society of 
China as one of the largest developing countries.  The Chinese government continued to attach great 
importance to IPRs and their protection as the va lue and importance of IPRs in an increasingly 
globalized world was well known.  Although the tran sitional review of China had now come to an 
end, China believed that its exchanges with Members on IPR issues and their protection would 
continue, and be further enhanced, in the future.  Ch ina would continue to participate in the work of 
the Council in an open and cooperative spirit. 
55. The delegation of Nigeria said that the trans itional review mechanism had been included in 
China's Protocol of Accession as a special precautiona ry instrument with the objective of monitoring 
and enforcing the implementation of WTO commi tments, and the case of the TRIPS Council, to 
monitor the implementation of the TRIPS Agreement,  in addition to promoting transparency and 
exchange of information in trade relations with Chin a.  In view of his delegation the review exercise 
in the TRIPS Council had provided a broad review of the IP regime on a scheduled basis and he 
thanked China for its detailed responses to the questio ns that had been raised.  Since Nigeria had been 
one of the first Members to recognise the market ec onomy status of China, his delegation shared the 
view that China was moving in the right direction and at the right pace, in spite of the enormous 
challenges and cost of the commitments it had unde rtaken.  The Nigerian delegation wished to 
encourage China to remain steadfast in its endeavour and, in particular, to pay special attention to the 
enforcement of the regulation relating to the expor t of sub-standard goods, which included copyright 
and patent infringement. 
56. The Chair thanked China for the information it had provided, as well as other Members for 
their contributions.  Turning to the Council's repor ting obligation to the General Council, he suggested 
that the Council follow the same procedure as in the past years, namely that the Chair, acting on his 
own responsibility, would again prepare a factual repo rt.  The content of the cover page to the report 
would be similar to that of the report submitted by the Council in 2009 and the part of the minutes 
reflecting the discussions held under th is agenda item would be attached. 
57. The Council took note of the statements made and agreed to proceed as suggested by the 
Chair. 
__________