Criminal enforcement

The SPP’s Increasing Role In Protecting IP

On February 8, 2021, China’s Supreme People’s Procuratorate (SPP) held a press conference, where it was revealed that from 2016 to 2020, procuratorial organs across the country approved the arrest of over 16,300 cases of 28,000 people and prosecuted more than 23,000 cases of more than 45,000 people. This is a much higher volume of criminal prosecutions than USDOJ, which charged 68 cases in FY 2019 according to a report of the White House IP Enforcement Coordinator. 

Another function of the procuracy is to supervise civil and administrative cases. From 2016 to 2020, procuratorial organs across the country accepted a total of 495 civil supervision cases and 205 administrative supervision cases.

Song Jianli 宋建立, Deputy Director of Procuratorial Office of Intellectual Property (POIP) of the SPP, addressed trade secret related criminal issues.  He noted that in recent years most of the targets of crimes involving misappropriation of commercial secrets have been the core technology secrets of enterprises, including the employees or former employees of foreign-invested enterprises, which are high-risk groups for crimes. The procuratorial organs plan to strengthen the protection of trade secrets in key technical fields, focusing on cracking down on trade secret misappropriation crimes involving high-tech technologies and key technologies along with enforcement of other IP rights.  Mr. Song was formerly a judge in the Supreme People’s Court’s (SPC) No. 4 Civil Division  and on the China International Commercial Court, specializing in cross-border civil and commercial cases. He was appointed to his current position last year. He will bring China’s rich civil IP experience, particularly that at the SPC plus his own international experience to bear on civil, administrative, and criminal IP matters.

The POIP of SPP was established on November 6, 2020 as an internal comprehensive case handling organization to integrate the criminal, civil, and administrative procuratorial functions of intellectual property.  Currently, Beijing, Tianjin, Shanghai, Chongqing, Jiangsu, Zhejiang, Fujian and Sichuan Procuratorate have all set up POIPs to carry out a one-year pilot project for the centralized and unified exercise of IP procuratorial functions. At the same time, procuratorial organs in other non-pilot areas were also encouraged to promote IP procuratorial work according to local situations. In the next step, this institutional setting will be gradually promoted as more mature experience is accumulated. The establishment of the POIP is in some respects analogous to the Computer Crime and Intellectual Property Section at USDOJ or their counterpart Computer Hacking and Intellectual Property units in local US Attorney offices.  

Standards for transfer of cases between administrative agencies and law enforcement were agreed between the SPC and SPP in a September, 2020 judicial interpretation. The Quality Brands Protection Committee and its former Chairman, Jack Chang have been urging various reforms for some time including greater involvement of rights holders as victims in criminal procedures and greater integration of criminal prosecution authorities with the administrative enforcement mechanisms for more seamless transfer of cases which meet relevant criminal thresholds.  Section 1.26 of the Phase 1 Trade Agreement between the United States and China similarly provided that “China shall require the administrative authorities to transfer a case for criminal enforcement, if, under an objective standard, there is ‘reasonable suspicion’ based on articulable facts that a criminal violation of an intellectual property right has occurred.” These were also proposals I first raised over 15 years ago, often in programs with my embassy colleague and classmate,  Ira Belkin.  I urged the creation of specialized IP prosecutors and greater involvement of businesses “because IP is primarily a private right.” These recent reforms demonstrate how the Phase 1 Trade Agreement often built upon years of advocacy and engagement in IP and has also helped China prioritize a range of IP reforms.   

 In the press conference, SPP also released the 26th batch of guiding cases to guide the handling of intellectual property crimes. This batch has 5 IP cases including counterfeit trademark, trade secret and copyright law. Two of the cases involved foreign victims including Starbucks, HP and Cisco.  Aaron Wininger has described these cases in his recent posting on procuratorial developments.

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