A Porpourri of Autumn Copyright Developments

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Here’s a mix of copyright updates:

On October 13, Tencent and Netease signed a deal for Netease to takes licenses on 1.5 million songs.  Tencent, as I previously reported, has actively been promoting the legitimate use of music on-line.   The current “Sword Net” campaign was is focusing since mid-July on music, and these actions may be a reflection of the campaign’s efforts. Over the summer, NCA had specifically mandated that ISP’s should stop making unauthorized music available on line.  Anecdotally, I have heard that it is getting harder to find illegal music to download.  NCA’s crack-down, including an effort to remove two million songs from the on-line environment was also noted by the media.

Also on October 14, NCA issued new guidance for website service providers (关于规范网盘服务版权秩序的通知), which requires service providers to take proactive measures to screen copyrighted content being uploaded, including for works that have previously been removed, works that are the subject of a notice and takedown, and works specifically listed by NCA.  The rules also require service providers to not provide any support to users to illegally share unauthorized works, and requires users to make a reasonable explanation to service providers if there is abnormal logging-on activity. These rules require something more than responding to notice and take-down requests, and (laudably, in my opinion) appear responsive to the perspective that the late Prof. Guo Shoukang told me, that the obligations set forth in China’s DCMA-type laws and regulations should evolve as technology evolves.

Another important development of late is the formation in September of a sports IP committee under the China Intellectual Property Law Studies Association.  Hopefully, this committee can help spur better protection under China’s IP regime of live sports broadcasts, amongst other sports-related IP issues.

Revised Patent Administrative Enforcement Rules – Is SIPO Building an Administrative System so the Patent Law Amendments Will Come?

On January 27, 2015 SIPO released a revised draft of its Patent Administrative Enforcement rules for public comment.  The released draft includes a line by line comparison with the last version (Feb. 1, 2011) as well as an explanation of the changes. The due date for comments is March 15, 2015. The purpose of these amendments is to address such matters as reducing the time frame for patent administrative litigation, improving procedures, and improving enforcement in the on-line environment.

Separately SIPO Commissioner Shen revealed at a SIPO Party Meeting on January 23, that in addition to rapidly increasing patent filings (2.361 million in total in 2014), , the total number of patent administration enforcement cases was 24,479, increasing 50.9% from the prior year.  This is a nearly 16 fold increase since 2009.  Past efforts like these have typically brought surges in “patent passing off” cases, which is most like false marking.   SIPO’s administrative enforcement in recent years has also shown irregular month to month cycles that are likely tied to enforcement campaigns (see my chart below).Patentadminenf

I estimate that this high level of enforcement activity is likely due to a combination of four factors, including an NPC Standing Committee to supervise administrative patent enforcement in eight provinces and regions that was launched in 2014. a campaign from last year to address counterfeit and substandard products (打击侵犯知识产权和制售假冒伪劣商品), a renewed commitment to amend the patent law, which Commissioner Shen noted in his talk at the meeting to local IP Offices on January 19, and SIPO’s own desire to ensure that its administrative enforcement system is not sidelined by recent efforts to improve judicial adjudication of high technology IP cases, including the establishment o f the specialized IP courts.   Indeed, the explanation advises that this draft reflects the commitments to improving rule of law in China.

The different roles of China’s administrative and judicial systems in patent enforcement has been previously discussed by me in this blog,  I quoted David Kappos at that time as recommending that “China should consider concrete ways of promoting and improving the civil judicial enforcement system by providing more resources, promoting the independence of the judiciary, providing for more training of judges, particularly on technical patent matters, and in general, improvements in the civil legal environment”  Many of these efforts are now underway in the judicial system.   Maybe the administrative system is trying to catch up?

Photo below, from Beijing airport – a foreign company advertising its patented product in 2015.

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Updated January 17, 2016.

The Door Opens Wider on Administrative Enforcement Transparency

ImageThe State Council recently promulgated its notice of its “Trial 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 Infringement (Guo Fa No. 6,  Feb. 19, 2014).   The Chinese and a machine translation are also available here.

I previously blogged about the drafting of this Trial Opinion, including the background of earlier controversies involving the United States and China when China refused to reveal information about pending administrative cases, see: Through A Glass Less Darkly: China’s March to Administrative Enforcement Transparency.   Here are a few of the key points of this Trial Opinion:

A) First, as its name suggests the initial focus is on fake, counterfeit and sub-standard goods.  While IP infringement is also a part of this effort, traditionally the amount of enforcement against substandard goods is greater than IP.   This seems to be the continued focus.  The opening chapeau mentions as the first goals of this regulation “to protect consumer interests” and to “maintain the market order for fair competition.”  The chapeau does not mention that protecting the legitimate rights of IP holders is a specific goal.   

It is also unclear if certain IP-related offenses are included in the scope of this regulation, such as illegal business operations by manufacturing or selling of illegal publications and antitrust matters, particularly those that involve Article 55 of the Antimonopoly Law regarding abuse of IP rights.

B) The Trial Opinion also has a substantive commitment regarding IP enforcement: administrative agencies, “in principle” should conduct their enforcement actions in an “ex-officio” (self-initiated) manner.  The distinction between ex-officio and enforcement on complaint has historically been a problem in certain jurisdictions, as administrative officials may feel less compelled to provide information on cases if they had “self-initiated” cases than if they were responding to a complaint (Art. 1.1).

C) The Trial Opinion sets forth specific requirements regarding the information that much be disclosed, such as the name of the offending party, their legal representative, legal basis for the punishment, and person(s) who decided the case. (Article 2). 

D) County level officials and above ae responsible for directly implementing this Trial Opinion (Article 3).  For IP-related offenses, this is likely to impose the highest burden on SAIC, as it is the largest IP-related agency, and has offices at sub-county levels.

E) Generally disclosure is principally to be made via the Internet.  In most cases disclosure should be made within 20 days after the punishment decision.  However, if the decision involves public health and safety, it should be made immediately available (Art. 4)

D) Information that should not be disclosed include trade secret information, government secrets and information that involves privacy concerns (such as involving the physical location of individuals and their phone number) (Art. 5).  Chinese practice of not disclosing in its entirety cases that involve “trade secrets” may make it exceedingly difficult to understand how trade secret and many other IP cases are handled, particularly at a time when the IPR Leading Group is considering a trade secret enforcement campaign.

It is hoped that, over time, China will publish administrative and civil cases that remove relevant confidential information.  The current civil practice seems to involve not publishing cases and sometimes having cases discussed in the press by enforcement officials.  This was practiced by judges who have written articles that discussed Huawei vs. Interdigital, an antimonopoly civil case.   This approach can have the unfortunate consequence of giving the public the impression that an undue amount of power has been given to the enforcing official to disclose the nature of the case on the regulator’s own terms. 

In general, the Trial Opinion shows a commitment to greater transparency of administrative agency, and appears to be occurring in tandem with efforts to improvement transparency in the courts.   While it took 90 days for this Trial Opinion to be made public, another important step in transparency would be to make public a State Council opinion on improving administrative-criminal IPR enforcement coordination (September 12, 2012).  The latter opinion appears to have markedly improved criminal IPR enforcement within China, and may have been referred to obliquely in Article 2.5 of the Trial Opinion as it requires public disclosure of administrative punishments for cases that are referred to criminal prosecution. 

Rev: Jan 16, 2017

 

 

Why the Proposed Amendments to the Patent Law Really Matter … and Maybe Not Just For Patents

It is rare that I can blog on a patent issue in China that has implications reaching far beyond intellectual property, to property rights and civil law, WTO and TRIPS, and even the role of the courts.  These recently released draft amendments to the patent law, however, have a much broader scope of impact. Continue reading