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Alert 383 - China - New Opinions regarding application of the law in IP infringement criminal cases
The Opinions regarding application of the law in IP Infringement Criminal Cases (’the Opinions’), jointly issued by the Supreme People’s Court, the Supreme People’s Procuratorate and the Ministry of Public Security on 10 January 2011, clarify the application of the law, in a number of areas, in criminal cases involving IP infringement. The provisions of the Opinions are discussed below.
'Goods without identifiable marks' may still constitute counterfeit products
Counterfeit goods that do not bear a counterfeit trade mark are defined in the Opinions as ‘Neutral products’. Article 7 clearly states that in cases involving neutral products, if there is evidence that the goods will be used to counterfeit the registered trade mark of another, the value of the goods forms part of the ‘illegal business amount’ for the purposes of the criminal law. This regulation is undoubtedly a big step in terms of judicial recognition of ‘illegal business amount’.
Criminal liability in relation to dissemination of infringing works via the internet
The Opinions definitively prescribe, for the first time, that dissemination of infringing works via the internet will attract criminal liability in the following situations: if the actual total hits on the work is more than 50,000; or, where the work is distributed via a membership system, the number of registered members of the site is more than 1,000. The Opinions also state that individuals who have infringed copyright by illegally printing, copying or publishing the work of another may be criminally liable for copyright infringement, but not for any other crime.
The Opinions definitively prescribe, for the first time, that dissemination of infringing works via the internet will attract criminal liability in the following situations: if the actual total hits on the work is more than 50,000; or, where the work is distributed via a membership system, the number of registered members of the site is more than 1,000. The Opinions also state that individuals who have infringed copyright by illegally printing, copying or publishing the work of another may be criminally liable for copyright infringement, but not for any other crime.
Trade marks with only subtle differences are treated as ‘identical’ trade marks
Article 6 of the Opinions clearly provides that a mark that differs from another mark in only minor respects, such as changes of colour, character font, capitalisation, or spacing, should be treated as an ‘identical’ mark.
Article 6 of the Opinions clearly provides that a mark that differs from another mark in only minor respects, such as changes of colour, character font, capitalisation, or spacing, should be treated as an ‘identical’ mark.
Products referred to by different names can constitute ‘identical’ products
The Criminal Law of the People’s Republic of China provides that to attract criminal liability, the unauthorised use of another’s trade mark must be use on, or in relation to, identical products. Article 5 of the Opinions provides that ‘identical’ products refers not only to products of the same name, but also, in certain circumstances, to products that are referred to by a different name e.g. products that the relevant public would regard as being the same because of their composition, function or purpose.
The Criminal Law of the People’s Republic of China provides that to attract criminal liability, the unauthorised use of another’s trade mark must be use on, or in relation to, identical products. Article 5 of the Opinions provides that ‘identical’ products refers not only to products of the same name, but also, in certain circumstances, to products that are referred to by a different name e.g. products that the relevant public would regard as being the same because of their composition, function or purpose.
Assistance from the Court in obtaining evidence for private prosecutions
Although the law makes provision for private criminal prosecutions for IP infringement, there have so far been very few private prosecutions. It is difficult for rights holders to obtain the necessary evidence and almost impossible to ensure that the Defendant will be present in Court. Article 4 of the Opinions provides that where a party is unable to gain access to the necessary evidence, it can apply to the Court for assistance. Provided the Court is satisfied that there is adequate basis for action, it will carry out investigations to obtain the necessary evidence.
Although the law makes provision for private criminal prosecutions for IP infringement, there have so far been very few private prosecutions. It is difficult for rights holders to obtain the necessary evidence and almost impossible to ensure that the Defendant will be present in Court. Article 4 of the Opinions provides that where a party is unable to gain access to the necessary evidence, it can apply to the Court for assistance. Provided the Court is satisfied that there is adequate basis for action, it will carry out investigations to obtain the necessary evidence.
Evidence obtained in administrative proceedings can be relied on in criminal proceedings
Article 2 states clearly that certain evidence obtained by administrative law enforcement departments can be relied on in criminal proceedings. This should make it easier to obtain the necessary evidence for the purposes of criminal proceedings. The evidence (material evidence, documentary evidence, audio-visual materials and expert opinions etc) must be reviewed by the Police Department and People’s Procuratorate, and then verified by the People’s Court before two parties in Court, before it can be used in criminal proceedings. The testimony of witnesses and statements of the parties used in administrative proceedings cannot, however, be relied on in criminal proceedings – they will need to be the subject of further evidence.
Article 2 states clearly that certain evidence obtained by administrative law enforcement departments can be relied on in criminal proceedings. This should make it easier to obtain the necessary evidence for the purposes of criminal proceedings. The evidence (material evidence, documentary evidence, audio-visual materials and expert opinions etc) must be reviewed by the Police Department and People’s Procuratorate, and then verified by the People’s Court before two parties in Court, before it can be used in criminal proceedings. The testimony of witnesses and statements of the parties used in administrative proceedings cannot, however, be relied on in criminal proceedings – they will need to be the subject of further evidence.
Conclusion
In comparison to the two criminal judicial Interpretations released by the Supreme People’s Court (the 2004 version, which mainly defined thresholds for criminal responsibility and the 2007 version, which mainly deals with lowering those thresholds), these Opinions aim primarily to clarify certain issues regarding application of the law in IP criminal cases so that the Courts will act in a uniformed manner and outcomes will be more predictable. There are, however, other matters of concern that are not dealt with in the Opinions. These include the further lowering of the threshold for criminal responsibility, introduction of tougher penalties, price assessment or evaluation of counterfeit products, and the manner in which administrative departments, especially Customs, transfer cases.
In comparison to the two criminal judicial Interpretations released by the Supreme People’s Court (the 2004 version, which mainly defined thresholds for criminal responsibility and the 2007 version, which mainly deals with lowering those thresholds), these Opinions aim primarily to clarify certain issues regarding application of the law in IP criminal cases so that the Courts will act in a uniformed manner and outcomes will be more predictable. There are, however, other matters of concern that are not dealt with in the Opinions. These include the further lowering of the threshold for criminal responsibility, introduction of tougher penalties, price assessment or evaluation of counterfeit products, and the manner in which administrative departments, especially Customs, transfer cases.
