Poster Describing AQSIQ Enforcement Against Making/Selling Shoddy Products – Beijing

On November 20, the State Council, at an executive meeting chaired by Premier Li Keqiang, approved the “Opinion on Making Publicly Available According to Law Information on Administrative Penalties Concerning the Production and Sale of Fake, Counterfeit and Sub-standard Goods and Intellectual Property Rights Infringement” (关于依法公开制售假冒伪劣商品和侵犯知识产权行政处罚案件信息的意见). While, ironically, the opinion is not yet available on line, a statement released after the meeting said:

“The publication of such information [on administrative enforcement of IP] should be an important part of the government information disclosure requirements. Except for trade secrets and privacy considerations, the publication requirement should be self-initiated and apply generally to procedures for public disclosure of information regarding investigation and handling of all administrative punishment cases. Administrative enforcement officials should disclose information on the case according to law within the determined time frames for the determination of the punishment or a change in the punishment。

Published information should include the principle facts of the determination of illegality, the type of penalty, the basis for the decision and the results. This should be open and transparent, and there should be prompt replies to social concerns. Further, relevant administrative penalty information should be included in the social credit system so as to create “omnipresent constraints” on the creditworthiness of counterfeiters and infringers.

Administrative enforcement officials should strictly impose punishments according to law, and implement their responsibilities. Every level of government should promptly establish complete management and accountability systems, and strengthen supervisory investigation. We shall continue to correct with strict accountability to enable societal supervision for administrative enforcement for those who do not implement their responsibility to disclose information, who do not disclose in a timely fashion, who alter contents, who obtain payments against the laws, etc.”

Here it is in Chinese: http://www.gov.cn/ldhd/2013-11/20/content_2531230.htm.

The transparency contemplated by Premier Li may yet prove challenging to achieve for administrative IP and IP-related actions. The number of IP administrative cases (patents, trademarks and copyrights) is in excess of 100,000 at this time. If one included “substandard” goods, and other quasi-IP enforcement, for the full range of Chinese enforcement actors, the numbers could easily exceed 200,000 – including the enforcement regimes of SAIC (trademark, but also consumer protection, and antitrust), AQSIQ, SFDA, Ministry of Culture, SARFT/GAPP, Tobacco Monopoly, Chinese Customs, City Management (Chengguan), Police, etc.

One also hopes that these transparency efforts can also improve the administration of antitrust cases involving IP, where both general data as well as case-specific information is often lacking. It is also hoped that non-confidential versions of cases involving confidential information can be made available, even if there is confidential information in a specific case.

It is remarkable to think how far the quest for administrative transparency in IP has progressed since China joined the WTO. The TRIPS Agreement, Article 41 provides: “Decisions on the merits of a case shall preferably be in writing and reasoned. They shall be made available at least to the parties to the proceeding without undue delay.” Back in 2004, at the Trade Review Mechanism of the WTO, the Chinese delegation was asked to provide copies of its enforcement decisions. The response was: “Regarding obligations of administrative agencies to provide written decisions with interpretations for their enforcement decisions, [the Chinese delegate] said that his delegation believed that this question was not relevant to the IPR system and that his delegation was not obliged to answer it here.” TRIPS Council Meeting of December 1-2, 2004, IP/C/M/46 (11 Jan. 2005). The statement was repeated in a similar fashion later in 2005: (TRM, IP/C/39, p. 4 (21 Nov. 2005). The US requested a summary of China’s enforcement cases in its so-called “Article 63” request, which included information of the type that Premier Li is now requesting – information on the legal basis, remedies, location, year, competent authority, type of product, transfers to criminal authorities, and whether foreign nationals were involved, which was never provided (IP/C/W/461, Nov. 14, 2005).

Premier Li’s perspective reflects a general trend towards greater transparency, which he has now accelerated. For example, when a concern over transparency was also voiced by former USPTO Director Kappos in the context of SIPO’s more expansive role in administrative enforcement, SIPO Commissioner Tian responded in September 2012: “SIPO attaches great importance to the enhancement of the transparency of the administrative enforcement, as well as the importance of ensuring its openness, fairness and impartiality.”

Along with the legal reforms of the Third Plenum and other changes from the Supreme People’s Court under Zhou Qiang, these are signals suggesting deeper roots for China’s legal reforms, particularly in China’s omnipresent administrative system.