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Today, the Supreme People's Court and the Supreme People's Procuratorate have promulgated the Interpretation on Several Issues Regarding the Application of Laws in Handling Criminal Cases of Infringement on Intellectual Property Rights, which will come into effect on December 22, 2004, with the objectives of further strengthening judicial protection for intellectual property rights from the perspective of criminal law, fighting against IP rights violation in an efficient manner to safeguard the market economy order and improving the effectiveness of China's laws on IP rights protection. On behalf of the Supreme People's Court and the Supreme People's Procuratorate, I'd like to introduce to you the drafting background of the Judicial Interpretation and its main contents, and make some points on the state of trials of IP cases in the courts across China and the implementation of the Interpretation in future.

I. Drafting background

The Supreme People's Court and the Supreme People's Procuratorate pay great attention to the protection of IP rights from the perspective of criminal law. In 2002, the Supreme People's Court listed the protection of IP rights from the perspective of criminal law as an important research topic. In 2003, the Supreme People's Court and the Supreme People's Procuratorate listed the drafting of the relevant judicial interpretation from the perspective of criminal law on their working agenda. They organized a joint team, which made investigations and research in Guangdong, Fujian, Shanghai, Zhejiang, and Jiangsu, in December 2003 and June 2004. During its investigations, the team solicited opinions from the local public security bureaus, procuratorates, courts, and administrative departments of IP rights, such as bureaus of industrial and commercial administration, customs, and institutions in charge of quality monitoring and patents and copyright issues. From February to September 2004, the team collected opinions from the Ministry of Public Security and relevant administrative law-enforcement authorities, some high people's courts, and some provincial procuratorates. In September 2004, opinions were solicited from 11 governmental institutions, including the Commission of Legislative Affairs of the standing committee of NPC, the Ministry of Public Security, the State Administration for Industry and Commerce, the press and publications Administration, and the State Intellectual Property Office. In addition, during the drafting process of the Interpretation, the Supreme People's Court and the Supreme People's Procuratorate also listened to the views of China Association of Enterprises with Foreign Investment, the EU Commission, the Business Software Alliance, China Business Software Alliance, Motion Picture Association of America Inc., the American Chamber of Commerce - the P. R. C., and the U. S. Information Technology Office through multi-channels and in many forms for several times. On August 20, 2004, the Supreme People's Court and the Supreme People's Procuratorate gathered together famous domestic experts in criminal law and IP rights to discuss the fifth draft of the Interpretation. On the basis of the opinions of the experts and departments, they made several amendments to the fifth draft. At the No.1331 meeting of the Judicial Committee of the Supreme People's Court on Nov. 2, 2004, and the No.28 meeting of the 10 session of the Procuratorial Committee of the Supreme People's Procuratorate on Nov. 11, 2004, the Interpretation was discussed and adopted. It can be said that the drafting process is full of solicitation of opinions. In particular, opinions from some countries and multi-national enterprises were given enough considerations, which was unprecedented for any former judicial interpretation.

II. Main contents of the Interpretation

1. Clarifying the criteria of conviction and sentencing

The Interpretation has 17 articles. The first 7 articles specify the criteria of conviction and sentencing for 7 crimes stipulated from Article 213 to 219 of the Criminal Law. They mainly aim to solve the real-life problem that the legislation focuses mainly on general principles, lacks applicability, and doesn't provide specific criterion of conviction and sentencing. It stipulates the crime of counterfeiting registered trademark. The bottom line for applying penalties for the crimes of selling products with counterfeited registered trademarks, producing and selling counterfeited registered trademarks, and infringing on copyright is 50,000 RMB in terms of business operation, or 30,000 RMB in terms of illegal gains. Compared with the original judicial interpretation and the criterion for prosecution, the criteria of conviction and sentencing for 4 of the 7 crimes of IP rights violation have been readjusted remarkably.

2. It has explained the terms, which may lead to different understandings, in the Criminal Law

Article 8 to 11 provide clear interpretations for the ambiguous concepts in Article 213, 214, 216 and 217 of the Criminal Law, such as "a trademark which is identical with the registered trademark", "uses", "knowingly", "counterfeits the patent of another", "for the purpose of making profits", "without permission of the copyright owner", and "reproducing and distributing". All these were not clearly defined, and therefore disputes would occur easily. All these interpretations are of great significance for improving the quality and efficiency of the relevant departments in their handling of criminal cases concerning IP rights and unify the judicial criteria because they have solved tricky problems in judicial activities of IP rights protection. Meanwhile, Article 12 of the Interpretation also provides a clear stipulation on how to calculate the amount of illegal operation, which is also an attention-attracting issue in practice. It has unified the judicial criteria and clearly states that by amount of illegal operation it refers to the value of producing, storing, transferring, and selling the infringing product during the process of the infringing party's violation of IP rights. The value of a sold product should be calculated according to its actual sales price. The value of an unsold product should be calculated according to its marked price or the actual average sales price of the products that have been investigated. For products without any marked price or whose actual sales price cannot be found out, the values should be calculated according to the average market price of such infringing products. Such stipulations of the Interpretation reflect a fair handling of cases with sold products, and actually lift the calculating criteria for unsold products. Therefore, they are conducive to combating relevant crimes.

3. Clarifying the penal principle when the convicted has violated different laws, lowering the criterion for crimes committed by legal entities, and increasing the stipulations on accomplice

Article 13 and 14 of the Interpretation respectively provide the penal principle for different crimes. Article 13 provides that one should be convicted and punished for crime of counterfeiting registered trademark if he carries out this crime and sells his own counterfeited products as well; and that one should get combined punishments if he carries out the crime of counterfeiting registered trademark and knowingly sells counterfeited products produced by the others. Article 14 provides that one should be convicted and punished for infringing on copyright if he infringes on the copyright, and sells his own infringing copies; and that one should get combined punishments if he carries out the crime of infringing on copyright and knowingly sells infringing copies produced by the others.

Article 15 of the Interpretation stipulates that criteria of conviction and sentencing for a crime committed by a unit should be 3 times that for the same crime committed by an individual. This is less serious than the original stipulation of 5 times.

To combat activities that provide assistance to violations of IP rights, Article 16 stipulates that one is an accomplice if he knowingly provides various conveniences or acts as an importing/exporting agent for someone who carries out the crime of infringing on IP rights. It will play a significant role in enhancing protection for IP rights from criminal-law aspect by taking such activities into the scope of criminal punishment.

III. General information on the trial concerning intellectual property rights in courts of China over recent years

In recent years, particularly after China's WTO accession, the people's courts at all levels have made increasingly intensive efforts in handling disputes concerning infringement on IP rights, protecting the legitimate rights of the relevant IPR owners and punishing crimes relating to IP rights, and great achievements have been made. In 2003, the people's courts at various levels have heard and tried 9,271 cases concerning IP rights, which cover all areas prescribed in the Agreement on Trade-Related Aspects of Intellectual Property Rights of the World Trade Organization. Adjudication of those cases was very difficult due to the highly specialized nature of the cases and the complexity of legal relations and facts involved. Mary of them has had positive social effect both at home and abroad even though. While continuing to improve its adjudicatory efforts, the Supreme People's Court has been constantly strengthening its work of judicial interpretation and adjudicatory guidance. Since 2000, 25 judicial interpretations and documents with the effect to a judicial interpretation have been enacted to guide the adjudicatory practice and a relatively comprehensive system of judicial interpretation concerning IP right has taken its initial shape to support the related laws and regulations.

According to the judicial statistics from 2000 to November 2004, the efforts to protect IP rights from the perspective of criminal law have been intensified. 1710 cases of infringing on IP rights were heard and adjudicated and 1948 offenders were convicted and sentenced in Chinese courts at all levels. The past three years, in particular, has seen a remarkable increase of such cases, up by 56.42% than the same period of the last three years. In addition, from January 2002 to October 2004, the people's courts at all levels heard and adjudicated 2171 cases of producing and selling counterfeited or products and 3830 cases of illegal operation, a considerable proportion of which were related to infringement on IP rights. The figures have fully reflected that China's judicial authorities are determined to impose penalties on criminals committing infringements on IP rights.

IV. Seriously implementing the judicial interpretation of IP rights and providing more protections for IP rights from the perspective of criminal law

Since this year, the Supreme People's Court has laid more emphasis on the protection of IP rights. On 14 September, the Court issued the Notification on Further Strengthening the Judicial Protection on Intellectual Property Rights, requiring the people's courts at various levels to cooperate with relative executive authorities of the State Council to carry out special activities of IP rights protection, strengthen the judicial protection for IP rights and fully perform the functions of criminal, civil and administrative adjudication. Today, the Interpretation on Several Issues Regarding the Application of Laws in Handling Criminal Cases of Infringement on Intellectual Property Rights, promulgated by the Supreme People's Court and the Supreme People's Procuratorate，is another significant move of the Chinese judicial authorities to strengthen the judicial protection for IP Rights.

When implementing the judicial interpretation, we emphasize the following respects:

1. Improving awareness of the great significance of IP rights protection and providing more judicial protections from the perspective of criminal law.

With the accelerated development of China's market economy and further opening up, and since China's accession into the WTO particularly, the importance and urgency of protecting IP rights have grabbed more attention. Protecting IP rights is necessary not only for China's honoring of its international promises, creating favorable trade and investment environment, and further opening up to the outside world, but also for promoting technical innovation, regulating the order of the market economy, improving the overall quality of the national economy, and enhancing the competitiveness. The people's courts at all levels should pay more attention to the criminal punishments on crimes of infringing on IP rights with clear-cut focuses. Cases seriously disrupting the market order and the economic development and cases with huge amount involved and extremely serious circumstances and causing heavy losses to the State and the people, should be handled as major cases and the criminals involved should be convicted and sentenced according to law and in a prompt manner. Various penal means should be used and a special emphasis on property punishments should be stressed. We should not only sentence such offenders in a determined manner but also make it economically impossible for the criminals convicted and sentenced to commit the crime again.

2. Strengthening the cooperation with administrative law-enforcement authorities to jointly protect IP rights

In practice, some of the cases of infringing on IP rights include violations of both criminal law and administrative and civil regulations. The latter should be punished by the administrative law-enforcement authorities. As for criminal cases of IP rights transferred by other relevant departments, the people's courts should hear the cases in time, make clear what is a criminal offence and what is not, and identify different types of crimes. In addition, the courts should communicate with relevant administrative law-enforcement authorities to coordinate law-enforcement measures. Where fines replace criminal penalties or a case is not properly dealt with, the courts should put forward judicial proposals to relevant departments, so as to ensure the implementation of the Interpretation.

3. Focusing on some typical cases and improving the work of legal publicity so as to expand the social effects of the trials

Following the promulgation and implementation of the Interpretation, the people's courts at all levels should concentrate on the trials of a number of cases and select some typical ones so as to demonstrate the fact that China prioritizes the mechanism that protects IP rights, improve the legal awareness on IP rights of the whole society and lift the protection into a new level via public adjudication and the mass media. These measures will play an important role in creating a judicial and social environment favorable for the protection of IP rights.

Thank you for your attention.

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