WORLD TRADE
ORGANIZATIONIP/C/W/374/Add.1
11 September 2002
(02-4800)
Council for Trade-Related Aspects
of Intellectual Property RightsOriginal:  English
REVIEW OF LEGISLATION
Responses from China to questions posed by Canada and Switzerland
Addendum
By means of a communication from the Permanent Mission of the People's Republic of
China, dated 3 September 2002, the Secretariat has r eceived copies of the following responses to the
questions posed by Canada and Switzerland, as circulated in documents IP/C/W/366 and 372,
respectively.
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CANADA
1. What recourse do right-holders have in respect of wilful trademark counterfeiting or
copyright piracy on a commercial scale, as required by Article 61 of the TRIPS Agreement?
Please refer to the answer to question 2 on enforcement from Japan.
SWITZERLAND
A. PATENTS
1. Does your legislation grant patent protection for inventions relating to products and
processes in all fields of technology?  Are there any exceptions?  If so, please explain what theseexceptions are and how they comply with Article 27 of the TRIPS Agreement.
According to the Patent Law of the People's Republic of China, except for few exceptions,
inventions in all fields of technology are eligible for patent protection, provided that they are new,
involve an inventive step and are capable of industrial application.  The few exceptions are provided
for in Article 25 and Article 5 of the Patent Law.  Article 25 reads as follows:
For any of the following, no patent right shall be granted:(1) scientific discoveries;
(2) rules and methods for mental activities;
(3) methods for the diagnosis or for the treatment of diseases;IP/C/W/374/Add.1
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(4) animal and plant varieties;
(5) substances obtained by means of nuclear transformation.For processes used in producing products referred to in items (4) of the preceding paragraph,
patent right may be granted in accordance with the provisions of this Law.
These provisions are in consistence with provisions of Article 27.1 of the TRIPS Agreement.According to Article 5 of the Patent Law, "No patent right shall be granted for any invention-
creation that is contrary to the laws of the State or social morality or that is detrimental to public
interest".  In Rule 9 of the Implementing Regulatio ns of the Patent Law, further explanation as to
invention-creation that is contrary to the laws of the State is given.
These provisions are in consistence with provisions of Article 27.2 and 27.3 of the TRIPS
Agreement.
2. Does your legislation, in accordance with Ar ticle 27.1 in combination with Article 31 of
the TRIPS Agreement, consider importation as "working" a patent (and therefore exclude
compulsory licensing of a product which is being imported)?
According to Article 11 of the Patent Law, the meaning of "exploit the patent" includes
importation of patented products or products directly obtained by patented processes for businesspurposes.  Therefore, importation of patented products is considered as "working" a patent under the
Patent Law.
The fact that products are being imported shall not influence whether a compulsory license
shall be granted.  A compulsory license shall be granted according to the prescriptions of the PatentLaw.
3. Does your legislation make the granting of a compulsory licence subject to all the
conditions enumerated in Article 31 of the TRIPS Agreement?  Please cite the relevant
provisions of law.
Yes, there are detailed provisions on the grant of compulsory license in the Patent Law and its
Implementing Regulations, which are fully in accordance with the requirements of Article 31 of theTRIPS Agreement.
Article 48 of the Patent Law prescribes that "Where any entity which is qualified to exploit
the invention or utility model has made requests for authorization from the patentee of an invention or
utility model to exploit its or his patent on reasonable terms and conditions and such efforts have notbeen successful within a reasonable period of time, the patent administration department under the
State Council may, upon the request of that entity, gr ant a compulsory license to exploit the patent for
invention or utility model." It is in consistence with Article 31(a) and (b) of the TRIPS Agreement.
Article 49 of the Patent Law prescribes that "Where a national emergency or any
extraordinary state of affairs occurs, or where the public interest so requires, the Patent administration
department under the State Council may grant a compul sory license to exploit the patent for invention
or utility model."  It is in consistence with Article 31 (b) of the TRIPS Agreement.
Article 50 of the Patent Law prescribes that "Where the invention or utility model for which
the patent right has been granted involves important technical advance of considerable economic
significance in relation to another invention or utility model for which a patent right has been granted
earlier and the exploitation of the later invention or utility model depends on the exploitation of theIP/C/W/374/Add.1
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earlier invention or utility model, the patent administration department under the State Council may,
upon the request of the later patentee, grant a compulsory license to exploit the earlier invention or
utility model", "Where, according to the preceding paragraph, a compulsory license is granted, the
patent administration department under the State Council may, upon the request of the earlier
patentee, also grant a compulsory license to exploit the later invention or utility model."  It is inconsistence with Article 31(l) of the TRIPS Agreement.
Article 51 of the Patent Law prescribes that "The entity or individual requesting, in
accordance with the provisions of this Law, a compulsory license for exploitation shall furnish proof
that it or he has not been able to conclude with the patentee a license contract for exploitation on
reasonable terms and conditions."  It is in consistence with Article 31(b) of the TRIPS Agreement.
Article 52 of the Patent Law prescribes that "The decision made by the patent administration
department under the State Council granting a compulsory license for exploitation shall be notified
promptly to the patentee concerned, and shall be registered and announced", "In the decision granting
the compulsory license for exploitation, the scope and duration of the exploitation shall be specified
on the basis of the reasons justifying the grant.  If and when the circumstances which led to suchcompulsory license cease to exist and are unlikely to recur, the patent administration department
under the State Council may, after review upon the request of the patentee, terminate the compulsory
license."  It is in consistence with Article 31(b) and (g) of the TRIPS Agreement.
Article 53 of the Patent Law prescribes that "Any entity or individual that is granted a
compulsory license for exploitation shall not have an exclusive right to exploit and shall not have the
right to authorize exploitation by any others."  It is in consistence with Article 31(d) and (e) of the
TRIPS Agreement.
Article 54 of the Patent Law prescribes that "The entity or individual that is granted a
compulsory license for exploitation shall pay to the patentee a reasonable exploitation fee, the amount
of which shall be fixed by both parties in consultations.  Where the parties fail to reach an agreement,
the patent administration department under the State Council shall adjudicate."  It is in consistence
with Article 31(h) of the TRIPS Agreement.
Article 55 of the Patent Law prescribes that "Where the patentee is not satisfied with the
decision of the patent administration department under the State Council granting a compulsorylicense for exploitation, or where the patentee or the entity or individual that is granted the
compulsory license for exploitation is not satisfied with the ruling made by the patent administration
department under the State Council regarding the fee payable for exploitation, it or he may, within
three months from the date of the receipt of notification, institute legal proceedings in the people's
court."  It is in consistence with Article 31(i) and (j) of the TRIPS Agreement.
Rule 72 of the Implementing Regulations of the Patent Law of the People's Republic of China
prescribes that "The decision of the patent administration department under the State Council granting
a compulsory license for exploitation shall limit the exploitation of the compulsory license to be
predominately for the supply of the domestic market.  Where the invention-creation involved in thecompulsory license relates to the semi-conductor technology, the exploitation of the compulsory
license shall be limited only for public non-commercial use or to remedy a practice determined after
judicial or administrative process to be anti-competitive."  It is in consistence with Article 31(c) and
(f) of the TRIPS Agreement.
4. Does your legislation provide for the principle of the reversal of burden of proof in a
process patent litigation?  Please cite the relevant provisions of law.
Yes.  Paragraph 2 of Article 57 of the Patent Law prescribes that "Where any infringement
dispute relates to a patent for invention for a process for the manufacture of a new product, any entityIP/C/W/374/Add.1
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or individual manufacturing the identical product shall furnish proof to show that the process used in
the manufacture of its or his product is different from the patented process." This provision is in
accordance with Article 34.1 of the TRIPS Agreement.
B. PROTECTION OF UNDISCLOSED INFORMATION
5. Please explain in detail if your legislation ensures that undisclosed test or other data
submitted by an applicant to the responsible State agency in the procedure for market
authorisation of a pharmaceutical or of an agricultural chemical product is protected against
disclosure and against unfair commercial use by a competitor, for example by prohibiting a
second applicant from relying on, or from referring to the original data of the first applicant,
when applying subsequently for market auth orisation for a similar product.  Does your
legislation provide for exceptions to this?  If yes, under what conditions would such exceptions
apply?  Does your legislation set a specific term of protection for undisclosed test or other data
of the first applicant?
Please refer to the answer to question 22 from the United States.
C. ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS
6. Please describe how the Chinese legislation meets the requirements of Article 41 of the
TRIPS Agreement.  Please cite the relevant provisions of law.
Based on the undertaking made by China for entry into the WTO, China has amended the
Patent Law, Trademark Law, Copyright Law an d has enacted Regulations for the Protection of
Layout-Designs of Integrated Circuits and Regulations for the Protection of New Varieties of Plants.These intellectual property related laws and regulations, together with Criminal Law, General
Principle of Civil Law, Anti-Unfair Competition Law and relevant provisions in Criminal Procedure
Law, Civil Procedure Law and Administrative Procedure Law, have constructed a complete system to
ensure enforcement procedures provided in Part III of the TRIPS Agreement.  Therefore the
enforcement procedures established by the TRIPS Agreement can be applied effectively in Chinabased on domestic laws and regulations.  Key points of the enforcement procedures in intellectual
property related laws and regulations include:
(i) Criminal procedure
A infringer whose activities constitute the violation of intellectual property right may be
prosecuted either by a people's procuratorate or by the owner of the intellectual property right,
pursuant to the provisions set from Article 213 to Article 220 of Criminal Law.
According to the provisions set in Article 83 of Criminal Procedure Law, "The public security
organs or people's procuratorates shall, upon discover ing criminal facts or criminal suspect, file a case
and conduct investigation according to their respecti ve jurisdiction."  According to the provisions set
in Article 141 of Criminal Procedure Law, "When a people's procuratorate considers that the facts of acriminal suspect's crime have been ascertained, that the evidence is reliable and sufficient and that
criminal responsibility should be investigated acco rding to law, it shall make a decision to initiate
prosecution and shall, in accordance with the provisions for trial jurisdiction, initiate a public
prosecution in a people's court."
According to the provisions set in Article 170 of Criminal Procedure Law, "Private
prosecution includes the following cases:  (a) cases to be handled only upon complaints;  (b) cases
involving minor crimes evidenced by the victim;  (c) cases where the victim has evidence to prove
that the act done by the accused has infringed upon the persona land property rights of the victim andIP/C/W/374/Add.1
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that it shall be investigated for criminal responsibility according to law by the public security organ or
the people's procuratorate but has not been investigated for criminal responsibility."
Article 77(1) of Criminal Law provides that, "If a victim has suffered material losses as a
result of the criminal act of the accused, he/she shall have the right to file an incidental civil actionduring the course of the criminal proceeding." That is to say, the owner of intellectual property right
may not only prosecute the infringer through criminal procedure, but also acquire compensation for
losses through filing an incidental civil action during the course of the criminal proceeding.
(ii) Civil procedure, including injunction of infringement and preservation of proof and property
prior to and during the proceeding
To the act of infringement of intellectual property, a people's court may adjudicate that the
infringer should bear the civil liability by the way of cessation of infringements, extension of apology,
elimination of ill effects and compensation for losses.  The infringer bears the liability of
compensation of losses on the basis of the principle of complete compensation for the losses of the
owner of the right.
When hearing the intellectual infringement case, a people's court may serve admonitions,
order the offenders to sign a pledge of repentance, and confiscate the property used in carrying out
illegal activities and the illegal income obtained therefrom.  (For more detailed information, please
refer to the answer to question 7.)
(iii) Administrative procedure
To the act of intellectual property infringement, an administrative organ may handle it on the
basis of relevant legal provisions.
The party can file an administrative suit against the administrative authority's decision on
granting of an intellectual property and administrative decision on the infringement of intellectual
property in a people's court according to Patent  Law, Trademark Law and Administrative Procedure
Law.
The people's court will make out their judgment on criminal litigation, civil litigation or
administrative litigation, in paper, state the reasons for the judgment and send it to the parties on time.
All the legal documents should also be sent to the parties within the time limit provided in relevantlaws.
The procedures stated above as contained in relevant laws are fair and equitable.  They
grantee the effectiveness of the intellectual property related laws and regulations in protecting
intellectual property rights and also prevents the parties from abusing the procedures.  Theseprocedures are not complicated or costly, nor do they entail unreasonable time limits or unwarranted
delays.
7. Please describe in detail the civil judicial procedures and civil remedies available to
right holders according to your legislation in the different fields of intellectual property covered
by Part II of the TRIPS Agreement, allowing fo r effective action against acts of counterfeiting
and piracy.  Please cite the relevant provisions of your legislation providing for those civil
procedures and remedies.
In domestic laws of China, there are two kinds of civil procedures and remedies available to
the owner of intellectual property to fight against the counterfeit and piracy actions.  One is civilprocedures and remedies generally applicable to all kinds of intellectual property rights.  The other is
civil procedures and remedies applicable to specific intellectual property protection.IP/C/W/374/Add.1
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(i) Civil procedures and remedies generally applicable to all intellectual property rights
These procedures and remedies are mainly prescribed in Civil Procedure Law and General
Principle of Civil Law.
Key points in the civil procedures provided in Civil Procedure Law include:(a) Article 92 and Article 97 of Civil Procedure Law, and also Article 107 of the Judicial
Interpretation of the Supreme People's Court on the Application of Civil Procedure
Law, according to which the party to the suit may, at the time of filing suit or during
law suit, apply to the people's court for preservation of property or advance execution.
(b) Article 93 of Civil Procedure Law, according to which any interested party whose
lawful rights and interests would, due to ur gent circumstances, suffer irretrievable
damage without immediately applying for property preservation may, before filing a
lawsuit, apply to the people's court for the adoption of property preservation
measures.  The applicant must provide security;  if he fails to do so, his applicationshall be rejected.  After receiving an application, the people's court must make an
order within 48 hours;  if the court orders the adoption of property preservation
measures, the execution thereof shall begin immediately.  If the applicant fails to
bring an action within 15 days after the people's court has adopted the preservation
measures, the people's court shall cancel the property preservation.
(c) Article 74 of Civil Procedure Law, according to which, under circumstances where
there is likelihood that evidence may be destroyed or lost, or difficult to obtain later,
the participants in the proceedings may apply to the people's court for preservation of
the evidence.  The people's court may also on its own initiative take measures to
preserve such evidence.
In Article 134 of the General Principle of Civil Law, the main methods of bearing civil
liability shall be cessation of infringements;  removal of obstacles;  elimination of dangers;  return of
property;  restoration of original condition;  comp ensation for losses;  elimination of ill effects and
rehabilitation of reputation;  and extension of apology.  The above methods of bearing civil liability
may be applied exclusively or concurrently.  When hearing civil cases, a people's court may
confiscate the property used in carrying out illegal activities and the illegal income obtained
therefrom.
(ii) Civil procedures and remedies applicable to specific intellectual property protection
(a) Injunction prior to the proceeding:  Article 61 of Patent Law, Article 57 of Trademark
Law, Article 49 of Copyright Law, Article 32 of Regulation for the Protection of
Layout-Designs of Integrated Circuits prescribe that the owner of patent right, theowner of trademark right, the owner of copy right, the owner of the right of layout-
designs of integrated circuits and any interested party who have evidence to prove
that his or her lawful rights and interests would suffer irretrievable damage without
immediately prevention of infringing acts, may, before filing a lawsuit, apply to the
people's court for stopping relevant infringing activities.
(b) Measures of preservation of proof prior to the proceeding:  Article 58 of Trademark
Law, Article 50 of Copyright Law, and also Article 16(1) of the Judicial
Interpretation of the Supreme People's Court on the Application of Law on Stopping
Infringing Patent Right Prior to Lawsuit prescribe that, under circumstances whereIP/C/W/374/Add.1
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there is likelihood that evidence may be destroyed or lost, or difficult to obtain later,
the owner of patent right, the owner of trademark right, the owner of copyright, the
owner the right of layout-designs of integrated circuits and any interested party may
apply to the people's court for preservation of the evidence prior to lawsuit.
(c) Pursuant to the provisions in Article 51 of Copyright Law, for the infringement acts
which violate Copyright Law or rights pertaining to copyright, when hearing cases, a
people's court may confiscate the property used in carrying out illegal activities and
the illegal income obtained therefrom.
8. Please describe in detail the criminal actions and remedies that are available in your
legislation to combat counterfeiting and piracy.  Please cite the relevant provisions of your
legislation.
Please refer to the answer to question 2 on enforcement from Japan.
9. Please indicate the scale of damages provided  by your legislation to compensate for the
injury a right holder has suffered because of an infringement of that person's intellectual
property right by an act of counterfeiting or piracy.
In China, Article 60 of Patent Law, Article 56 of Trademark Law, Article 48 of Copyright
Law, Article 30 of Regulation for the Protection of Layout-Designs of Integrated Circuits, Article 20
of Anti-Unfair Competition Law (applicable to cases involving trade secret and geography marks)
prescribe in similar terms that the infringer shall co mpensate the losses incurred by the right holder as
a result of infringing action.  Damages can be calculated by the profits derived from infringing action
by the infringer.  Moreover, the damages shall also cover the reasonable expense paid by the infringedin order to stop such infringement.
Patent Law specifically prescribes that if the losses of the right holder or the profits gained by
the infringer are difficult to estimate, damages sha ll be computed in unison with the multiplied license
fee.  Copyright Law and Trademark Law specifically prescribe that if the losses of the right holder orthe profits gained by the infringement are difficult to estimate, the people's court shall award damages
not exceeding RMB 500,000 in accordance with the seriousness of the case
10. Please describe the provisional measures provided for in your legislation, in particular
those useful to combat counterfeiting and piracy.  Please describe the procedures that must be
followed, and cite the relevant provisions of law.
There are two types of provisional measures in Chinese legislation, preliminary interim
measures and interim measures taken during the proceeding.
Pursuant to Trademark Law, Copyright Law, Patent Law, Regulation for the Protection of
Layout-Designs of Integrated Circuits and relevant judicial interpretations issued by the Supreme
People's Court, Article 93 through Article 99 of Civil Procedure Law shall apply to all kinds ofpreliminary interim measures.  Article 92, 94 and 99 shall apply to the interim measures taken during
the proceeding.  Please also refer to the answer to question 7 for more details.
11. Please indicate the authorities responsible for the application of the measures provided
by your legislation to combat counterfeiting and piracy.  Please explain whether the competent
authorities are empowered to act ex officio and, if so, please indicate the enforcement actions
that may be taken.
Please refer to the answer to question 3 on enforcement from Japan.IP/C/W/374/Add.1
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12. Please describe any new initiatives that are planned to improve the enforcement of
intellectual property rights in your country, particularly initiatives to combat counterfeiting
and piracy.  Is there a particular action plan in place?
The Chinese Government has always attached great importance to increasing public
awareness of intellectual property protection and improving the enforcement of intellectual propertyrights in the country.  Amendments and revisions of the intellectual property related laws and
regulations have been repeatedly brought to the attention of the general public and enforcement forces
at various levels are also being trained to improve the protection of the intellectual property rights.
Taking into account of the size, population and current social and economic development level of the
country, it is a long-term task as has been taken by the Chinese Government and efforts in this regard
will continue relentlessly.
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