 WORLD TRADE  
ORGANIZATION  IP/C/W/432 
16 November 2004  
 
(04-4894) 
Council for Trade-Related Aspects 
of Intellectual Property Rights Original:   English 
 
 
 
TRANSITIONAL REVIEW MECHANISM OF CHINA 
 
Communication from the United States  
  
 By means of a communication from the delegation of the United States, dated 10 November 
2004, the Secretariat has received the following questi ons that the United States  has posed to China in 
the context of the transitional review mechan ism under Section 18 of its Protocol on Accession. 
 
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  The United States first wishes to thank the de legation of the People's Republic of China for 
their responses in prior years on China's intellectual property rights (IPR) regime .  Despite the limited 
time that has sometimes been available, we have  found the answers to be helpful in addressing our 
concerns and the concerns of our companies and right holders. 
 
 While we appreciate the effort s of the Chinese delegation to respond to all of these questions, 
we also welcome references to websites or other av ailable published materials where it would assist in 
responding to these questions.  I. GENERAL ISSUES 
1. We appreciate that certain Chinese agencies have begun taking on-line applications for 
recordals of IPR protection, as well as making their guidelines for review of rights protected by their 
agencies and other relevant materials available on line.  Please identify any general or specific plans 
for on-line applications and/or publication of  examination guidelines for patents, trademarks, 
copyrights, plant varieties, layout-designs, etc ., as well as the availability of public, searchable 
databases for issuances of patents, trademarks, co pyrights, etc., or recordals of IPR by Chinese 
Customs.  
2. China has taken various steps in recent year s with respect to market access for various 
products involving intellectual property rights, as we ll as to address the problems caused by piracy or 
counterfeiting of products prior to their approved introduction into the Chinese market.  For example, 
during a market blackout for imported films in the summer of 2004, pirated films quickly captured the 
market share for legitimate products.  What step s, if any, are Chinese ministries and agencies 
undertaking to impose more severe penalties on comp anies that distribute unauthorized copies or 
versions of products that have not obtained marketing approval? 
3. In 2004, China's courts apparently authorized Ch inese qualified lawyers to file for trademarks 
on behalf of their clients.  However, there are sev eral other intellectual property professions that are 
licensed by particular ministries, including, we be lieve, patent agents, copyright agents, and plant 
variety agents.  Please describe any changes in polici es or restrictions on representation of intellectual 
property right holders before specific agencies, and whether Chinese-qualified lawyers may practice 
before these agencies. IP/C/W/432 
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4. Please identify any useful facilities, websites, c ontact persons, or other contact information 
for foreign right holders to lodge complaints di rectly with Chinese officials regarding alleged 
infringements of IPR. 
II. LEGISLATION AND JUDI CIAL INTERPRETATIONS 
5. With WTO accession, China undertook extensive re visions to its legislative regime for all 
substantive IP rights.  However, certain genera l laws were not revised.  These laws include: the 
General Principles of the Civil Law (General Princi ples), the Criminal Code and the Law to Counter 
Unfair Competition.  In addition, at least one set of regulations, regarding protection of copyright over 
information networks, was intended by the National Pe ople's Congress to be part of China's regulatory 
package shortly after WTO accession, but has not ye t been enacted.  Please identify any plans to 
revise these laws and regulations.  More specifically: 
a. We understand that one draft of a civ il code under consideration did contain 
extensive IPR provisions.  When will China circulate a draft for public comment?  Will the Civil Code replace or modify existing IPR legislation?  
 
b. As detailed in prior submissions and bilateral discussions, China's Criminal 
Code, in its requirements of "identical" trademarks; high "thresholds";  failure 
to criminalize commercial scale piratical activities undertaken without profit motive; reliance on non-deterrent admi nistrative penalties; and apparent 
difficulties in criminalizing commercial scale exports/imports of counterfeit and pirated goods, raises significant concerns a bout the availability of remedies to 
address commercial scale counterfeiting and piracy under TRIPS.  We 
appreciate that China seeks to address some of these concerns through a pending judicial interpretation and requ est the opportunity to review that 
interpretation in draft form.  In a ddition, please describe any plans by the 
National People's Congress to address these concerns. 
 
c. Various laws and regulati ons have been enacted or proposed regarding unfair 
commercial acts in the past year in Ch ina.  These measures, which may or may 
not be directly relevant to intellect ual property rights, include provisions 
regarding unfair commercial acts in the revised Foreign Trade Law, drafts of the Anti-Monopoly Law, and proposals fo r laws to amend the Law to Counter 
Unfair Competition.  What laws or implementing regula tions are now under 
consideration, and at what stage are they in the drafting process? 
 
d. China's Copyright Law requires the State Council to draft regulations regarding 
protection of copyright over information ne tworks.  What is the status of these 
regulations? 
 6. We appreciate recent efforts made to provide drafts of rules, regulations and judicial 
interpretations in accordance with Paragraph 2(C) of  China's Protocol of Accession.  Please describe 
any efforts to ensure that drafts of these and othe r intellectual property measures are made available to 
the public in order to solicit public opinion in a comprehensive manner. 
7. Please identify any judicial interpretations rega rding intellectual property that are currently 
planned for enactment or revision.  Specifically, we understand that there may be several judicial 
interpretations now pending or un der consideration: (a) a judi cial interpretation regarding 
implementation of the Law to Counter Unfair Comp etition;  (b) a judicial interpretation regarding 
criminal intellectual property matters, including revisi ons to high "thresholds" for IPR crimes;  and/or 
(c) a judicial interpretation regarding "patent linkage ."  Is consideration being given to a judicial  IP/C/W/432 
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interpretation or other guidance on what constitut es "public interest" in administrative copyright 
enforcement? 
III. PATENTS 
8. Please provide information on the number of patent applications filed in China by US 
applicants and by other foreign applicants , along with the type of patent filings 
(invention/design/utility model) and the pe ndency rate for these applications (i.e.  the length of time 
from the filing of the applications until determinati on).  Please provide similar data comparing these 
applications with patent applications filed in China by Chinese nationals.    
9. Foreign right holders are increasingly concerned about pre-emptive filings of design patents 
by Chinese companies for designs that they may not  have created.  Please explain opportunities for a 
foreign right holder to challenge a patent on the basis that the party claiming the invention was not the 
inventor or that the patent is not novel. 
10. Please provide information on numbers of enforcement actions, including civil or 
administrative enforcement actions, involving layout-designs. 
11. Establishing a relationship or link between th e patent approval process and the drug approval 
process is an efficient way to improve the enforcem ent of intellectual property.  A successful linkage 
system reduces wasteful and unnecessary litigation by requiring third parties to assess whether their 
drug product is subject to a patent prior to seek ing drug approval and ensuring that the drug approval 
process reviewing the drug application does not approve the product until any patent issues are 
resolved.  We understand that various efforts are under consideration to impr ove the linkage between 
the patent system and drug regulatory approval system .  Please provide the details and status of these 
efforts. 
12. Please provide the details and status of any regulatory efforts to implement Article 39.3 of the 
TRIPS Agreement.  In particular, please advise what standards the State Food and Drug Administration uses to determine whether an applican t for marketing approval is  unfairly relying upon 
an earlier applicant's clinical data, without its c onsent, in seeking regulatory approval.  Please advise 
what data may be fairly relied upon.  We also understand that a new ministerial rule may be under 
consideration regarding data exclusivity .  Please provide its details and status. 
IV. TRADEMARKS AND ENTERPR ISE NAME PROTECTION 
13. How many opposition and cancellation proceedings are currently pending before the Chinese 
Trademark Office (CTO)?  What is the typical pendency for each type of proceeding (i.e.
 the length of 
time from the filing of the proceeding to the issuance of a decision)? 
14. Please describe any efforts to publish guidelines regarding examination of trademarks, the 
expected date of completion of these guidelines a nd their legal significance.  Also, please indicate 
whether these guidelines will be available over the Intern et and, if not, where they will be available or 
published. 
15. How does the CTO handle the concept of "relat ed goods/services" in its examination of 
trademark applications, i.e. , to what extent does the CTO take the relatedness of the goods/services 
into consideration in performing a likelihood-o f-confusion analysis across different classes? 
16. How many well-known marks have the CTO a nd the Trademark Review and Adjudication 
Board (TRAB) recognized under the rules issued by the State Administration of Industry and 
Commerce in 2003, including the number of foreig n well-known marks recognized under these rules?  
Please explain what standards or guidelines regardi ng recognition of well-known marks will be used IP/C/W/432 
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by the General Administration of Customs, Ministry of Public Security, Supreme People's Procuratorate and Supreme People's Court as a result of the amendments to the Trademark Law or the new rules.   Do these ministries and agencies intend to rely upon determinations of the CTO/TRAB in 
recognizing well-known marks in their enforcement actions? 
17. The following questions concern the administration of a sui generis  system for protection of 
geographical indications (GIs) by the Administ ration of Quality Supervision, Inspection and 
Quarantine (AQSIQ): 
a. Please explain the relationship between AQSIQ's system of GI protection and 
the system of GI protection established by the CTO pursuant to China's Trademark Law. 
 
b. Has AQSIQ's system been used to enforce GIs and/or impose civil liability?  
Can AQSIQ enforce GIs administratively,  and if so, has AQSIQ undertaken any 
enforcement actions? 
 
c. Does AQSIQ refuse protection for a GI if a trademark, certification or 
collective mark for the term already exists under CTO's system?   
 
d. Has AQSIQ attempted to recognize any fo reign GIs?  Has China entered into 
any bilateral agreements in which it has committed to recognize foreign GIs 
under the AQSIQ system? 
 
18. Please identify any new or pending rules to ensu re greater protection of "enterprise names," 
including protection of trademarks against infringement by enterprise names, protection of well-known or non-well-known marks against infringement  in enterprise names, and the possibility of 
securing advance pre-formation protect ion of enterprise names.    
V. COPYRIGHT 
19. Currently, several Chinese ministries conduc t content reviews of copyrighted works, 
including the Ministry of Culture, General Admi nistration of Press and Publications, and State 
Administration for Radio Film and Television.  Many of these reviews are conducted based on the media in which the works appear, which can be an artificial distinction as certain hard "publications" 
(such as entertainment software) can have significant  "soft" Internet content as well, which may be 
separately regulated.  Occasionally, these reviews r esult in long delays which enable pirates to 
dominate the market.  Please describe efforts to cons olidate content review through "one stop" review, 
and/or to expedite the overall process, particularly  in industries that are quite sensitive to the high 
incidence of piracy in China's markets. 
20. Please describe efforts to increase the personnel involved or resources available for copyright 
enforcement (such as in the Ministry of Public Secu rity or the National Copyright Administration) in 
light of the pervasiveness of copyright piracy in China, possible increased demands due to the 
pending criminal judicial interpreta tion, and other enforcement initiatives. 
21. Although a civil remedy may be available for end-user piracy, relevant administrative 
agencies appear uncertain as to whether end-user pira cy is against the "public interest" for purposes of 
administrative enforcement of China's Copyright Law.   What steps have been taken or are currently 
underway to resolve this discrepancy and ensure th at administrative authorities can take action against 
end-user piracy?  IP/C/W/432 
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22. Please describe what steps are being taken to en sure that Internet caf es use only authorized 
software.  Has consideration been given to ille gal use of software in the recently concluded 
rectification effort for Internet cafes? 
23. In recent years, the number of Internet users in China has grown to approximately 80 million, 
while cellular phone subscription has reached approx imately 300 million.  Ephemeral content that is 
frequently interactive is increasingly being made available to Chinese consumers and businesses.  The 
commercial availability of content - interactive or otherwise - over the Internet, intranets, cell phone 
or other networks without repli cation or permanent storage, ma kes protection of ephemeral or 
temporary copies increasingly important to China's content and hardware industries. 
a. Please identify what any civil, administ rative or criminal measures that ensure 
the protection of "temporary copies" of copyrighted works distributed over 
networks or computer systems. 
b. Which agencies are responsible for enforcement of these measures (National 
Copyright Administration, Ministry of Culture, Ministry of Public Security, courts, etc.)? 
 
24. Under what circumstances will an Internet Serv ice Provider (ISP) be held liable for civil, 
criminal, or administrative copyright infringement occurring on sites for which it provides Internet 
services?  What steps can a right holder take to force an ISP to remove infringing content from its networks?   
25. In addition to current civil procedures, does China intend to create an  administrative notice-
and-take-down system for on-line piracy?  If so, which ministry or agency will handle this?   
26. Which ministries or agencies are authorized to revoke an Internet content provider's business 
licence or Internet licence based on a finding of infringing content? 
27. We are pleased that China has agreed to accede to the WIPO Copyright Treaty and WIPO 
Performances and Phonograms Treaty as soon as possible.   Please explain the expected timing of the 
legislative and regulatory steps neces sary to complete China's accession. 
VI. ENFORCEMENT - GENERAL ISSUES 
28. Please provide copies of any current ministry or agency action plans for improved IPR 
enforcement by the IPR Working Group or other mi nistries, agencies or working groups, or e-mail 
links to these action plans. 
29. Please provide statistics on the numbers and results of criminal, administrative, and civil cases 
for IPR enforcement cases in China.   
30. Please provide any available data on the actions  undertaken and results produced by China's 
various authorities responsible for enforcement of  specific IPR, including type and amount of 
penalties (e.g.
 fines, license suspensions, imprisonments ) and seizures of infringing goods and the 
implements used to make them; frequency and type  of all forms of enforcement actions, such as 
initiation of administrative actions, raids, referrals  for criminal prosecution, imposition of penalties 
and other relevant enforcement actions ;  and incidence of recidivism.   
31. Please provide any available data on the overall amount of piracy, counterfeiting or infringing 
activity in China's markets or market sectors (such as end-user piracy, Internet cafes, motion pictures, 
luxury goods or fast-moving consumer goods).  IP/C/W/432 
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32. Please describe any formal or informal mech anisms that are currently in place or being 
contemplated involving cooperation with foreign countries on civil, criminal or administrative 
actions - including customs - involving IPR infringement.   
33. Due to concerns about local protectionism in China, many companies would prefer to bring 
enforcement actions in cities or regions other than where an alleged infringer has its seat of business 
or principal place of operations.  Please confirm that civil, criminal and administrative jurisdiction 
would lie where the harm is caused, such as at the location of a trade show where infringing products 
are exhibited. 
34. Please provide information on the development of any national or local specialized IPR 
investigation or prosecution authorities.  For ex ample, the Economic Crime Investigation Division 
(ECID) of the Ministry of Public Security curre ntly handles most intellectual property crimes, except 
those involving piracy.  Please describe any effort s to consolidate responsibility for all intellectual 
property crimes, including those involving piracy , under the ECID.  Please describe any plans to 
establish special IPR divisions within the procuracy or the courts.   
35. We understand that efforts are underway to cons ider licensing of private investigative firms 
by the Ministry of Public Security.  We support the development of licensed, independent 
investigative firms to assist in civ il, administrative, and criminal acti ons brought by right holders.    
Please provide the status of these efforts. 
36. We understand that landlords can be held liabl e in China for illegal activities undertaken by 
their lessees.  Please identify any developments in administrative, civil or criminal laws or  
regulations or enforcement in this area, including  how these laws or regulations are being used to 
address the problems of wholesale or large scale markets for counterfeit or pirate goods. 
VII. ADMINISTRATIVE ENFORCEMENT 
37. Which ministries or administrative agencies are involved in protecting intellectual property 
over the Internet, including divisions of the Ministry of Public Security, Customs, Ministry of Information Industries, National Customs Administration, and State Administration for Industry and 
Commerce?  Please explain each agency 's jurisdictional authority, i.e.
 the primary responsibilities of 
each relating to the protection of IPR over the Internet. 
38. Please explain the obligations of administrativ e agencies to provide written decisions with 
explanations for their enforcement decisions, as we ll as plans for publishing administrative decisions 
or making them available, including what types of administrative decisions will be published and 
where will they be made available or published. 
39. Please provide statistics on administrative enfo rcement, including (a) fines imposed and/or 
collected; (b) administrative injunctions ordered;  (c) frequency of legal challenges to fines or 
injunctions and percentages of reversal or modi fication by the courts; and (d) any procedural 
requirements, such as a right to be represented by counsel, challenge evidence, receive proportionate 
penalties, and receive a written decision on the facts and law. 
40. Please clarify what degree of deference is extended to administrative case decisions when 
similar sets of facts or law are involved in a judicial proceeding. 
41. Many right holders have e xpressed concern that penalties in China's administrative 
enforcement system are chronically non-deterrent , leading infringers to regard administrative 
penalties as little more than a cost of doing busin ess and to continue infring ing intellectual property 
rights even after multiple administrative enforcem ent actions.  Please describe any plans to establish  IP/C/W/432 
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or impose minimum penalties for infringement or ma ke other improvements to  provide for deterrent 
penalties. 
VIII.  CIVIL ENFORCEMENT 
42. In civil IPR cases, what is (a) the range of the length of time from filing until final decision; 
(b) the range of amounts of damages awarded; and (c) the frequency of subsequent reversal or 
modification of such awards? 
43. We understand that some right holders have had difficulty in enforcing injunctive relief 
awarded by courts in China.  Please describe what  procedures are available to ensure enforcement of 
judicial injunctions involving intellectual property, particularly in a province or locality other than 
that where the court is situated. 
IX. CRIMINAL ENFORCEMENT 
44. For criminal IPR cases, please provide (a) the frequency with which administrative authorities 
refer infringement cases for criminal prosecution;  (b) the amounts of fines, prison sentences and other 
penalties imposed for infringement;  and (c) the percen tages of subsequent reversal or modification of 
such penalties. 
45. Currently, civil IPR cases are usually heard by the intermediate courts, IP division, while 
criminal cases are usually heard by the basic cour ts.  Are there procedures in place to consolidate 
civil, administrative, and criminal IPR proceedings in one court? 
46. We understand that the judicial interpretation on  criminal thresholds is currently in an 
advanced stage of drafting.  When will Ch ina circulate a draft for public comment?   
47. With the imminent enactment of the new judicial interpretation on criminal thresholds, it is 
likely that various local and national judicial inte rpretations and guidance issued by ministries, the 
courts, the procuracy and administrative agencies ma y require revision to ensure prompt investigation 
and prosecution in accordance with the new guidelines.   What efforts are under way for revising 
national or local guidelines for referral of cases to cr iminal prosecution or criminal investigation, and 
for reorganization of entities involved in criminal IPR investigation or prosecution? 
X. CUSTOMS/BORDER ENFORCEMENT 
48. China is by far the largest exporter of infringing  goods that are seized at the borders of the 
United States by US Customs authorities.  What new steps, if any, are being taken to stop the 
exportation of counterfeit and pirate d goods from China?  What steps have been beneficial and which 
have not been helpful in stopping the exporta tion of counterfeit and pirated goods from China? 
49. Please describe any developments since the enactment of the new Customs Law and 
implementing regulations authorizing Customs to ma ke infringement determinations in obvious cases 
of infringement. 
50. Please describe any changes to China's bonding requirements for detention of suspected 
infringing goods. 
51. Please describe what steps China is taking to ensure that companies engaged in import or 
export of counterfeit or pirated goods, including frei ght forwarders and distributors, bear civil, 
criminal and/or administrative liability for their actions. IP/C/W/432 
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52. Please provide, to the extent available, seizure/f ine statistics and other relevant data for the 
last three years on Chinese Customs IPR activities,  including information on the source of the goods 
seized, their destination, and th e nature of the IPR involved. 
53. Please provide the number of IPR cases Customs has referred to administrative, criminal or 
civil prosecutions, and the number of cases in which Customs has cooperated with foreign authorities. 
 
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