Trade Officials Tell WTO That Government Contemplates No New Changes to Criminal IPR Laws

Chinese trade officials told an October 25-28 World Trade Organization (WTO) meeting that the National People's Congress (NPC) has "no plans to amend the Criminal Code or other IP laws at this moment, although in-depth research and study in this field would continue," according to the WTO's official record of the meeting released on November 21. The comments responded to the written submissions of other WTO members that questioned the adequacy of the provisions of the Criminal Law that define intellectual property rights (IPR) offenses. The exchange was part of the fourth annual WTO Transitional Review Mechanism (TRM), which the WTO's Council on Trade Related Aspects of IPR conducted in late October.

The China Daily and People's Daily (in Chinese) subsequently reported that the NPC plans to amend the Patent Law during its spring 2006 session. Among the changes to the Patent Law that the NPC will consider are simplifying patent application and examination procedures, enhancing protections for China's domestic biological and genetic resources, and increasing disclosure requirements for the origin of any biological and genetic resources used in a patented invention. The Patent Law does not assess criminal penalties for patent infringements, however, changes to that law will not address concerns about the insufficiency of the Criminal Law’s IPR provisions. If Chinese lawmakers were to make the criminal penalties imposed for serious IPR violations more specific, they would need to amend Chapter III, Section 7 of the Criminal Law, which addresses IPR violations.

The Commission found that the current IPR provisions in the PRC Criminal Law are inadequate to deter infringement in the Commercial Rule of Law and Impact of the WTO section of the 2005 Annual Report. In addition, the American Chamber of Commerce in China and the American Chamber of Commerce in Shanghai assert in their September 2005 White Paper 2005: American Business in China, that the Criminal Law provisions on IPR violations are "the one key [IPR-related] law not revised when China joined the WTO." The Chambers suggest that the NPC should revise the Criminal Law "to provide stronger protection, enhanced penalties and further clarification of standards" for IPR offenses. The Office of the U.S. Trade Representative (USTR) also said in its 2005 Report to Congress on China's WTO Compliance that China nedds to "pursue additional legislative changes to improve the legal framework supporting enforcement, particularly in the area of criminal enforcement . . . through the removal of various evidentiary thresholds, the 'for profit' requirement in the copyright area, the 'identical trademark' requirement and the distinction between individual and enterprise liability."