Two New Local Policies for Online Adjudication and Enforcement

Here are two new local policies on online adjudication and enforcement

From fellow Chinese IP blogger Song Haining, comes word of a draft Beijing Court Draft Guidance (for comment) on Adjudication of Internet IP Cases (北京市高级人民法院有关网络知识产权案件的审理指南 [征求意见稿]).Haining’s blog draws especial attention to Article 35 of this draft regarding unfair competitive acts in the on-line environment by misleading consumers away from a legitimate site by misappropriating or misusing information of a legitimate website under Article 2 of the Anti-unfair Competition Law.   The draft guidelines are divided into copyright, trademark and unfair competition sections.  My request: individuals who know how public comments may be filed on this draft, please post on the comments section below on this blog!

Also of interest is that Zhejiang Province has established a new online judicial tribunal to adjudicate disputes, particularly e-commerce related disputes.  The tribunal was first announced during the World Consumers Day commemorations in Zhejiang Province earlier in 2015. Zhejiang is of course home to Alibana and other etailers.

Developments in Online Civil Copyright Enforcement in China: NCAC’s Analysis

The National Copyright Administration of China (NCAC), in its 2014 Annual Report Online Copyright Protection in China (2014年中国网络版权保护年度报告), analyzed published opinions on online civil copyright cases involving the “right of transmission to the public” (making available right)  drawing on three public databases (the Supreme People’s Court’s “中国知识产权裁判文书网” 、 “中国裁判文书网” ,and Peking University’s “法宝数据”).

There were 1650 reported civil opinions on online infringement in 2014, an increase of 18.8 percent from last year. Audiovisual cases occupied first place, at 44.5 percent of these opinions.  Literary works constituted 390 cases, or 23.6 percent. This was an increase of six times over last year. Graphical works were 363 cases, a 3.3 times increase. Video games totaled 56 cases and music was last of these major categories with 20 cases, or about 1 percent, a decrease from last year of 80 percent. In total these categories constituted 98 percent of reported cases.

The report identifies that were 86 cases involving 11 of the 20 websites that were subject to supervision by China’s copyright administrative authority (NCAC), and were 5.2% of the total cases.  These cases were a declining percentage of online infringement cases compared to past year.  It appears that NCA is using this data to show the effectiveness of its administrative mechanisms.

The decline in music cases, in my estimation, likely reflects the great difficulty the music industry faces.  Music is a priority area for NCA this year.  Improvements in administrative IP protection planned at the beginning of 2015, including a recently launched campaign,  will also hopefully reduce the level of infringement by key internet companies and/or support more effective civil enforcement in this sector.

Plaintiffs in online copyright cases were mostly enterprises, and defendants were mostly internet companies. Individuals were a small number of the plaintiffs (about 6.4 percent), which was about the same as last year. Online media companies were principal defendants (87%).  The remaining 13 percent consisted of traditional media companies, including traditional publishers, newspapers, motion picture studios, and television stations.

Civil online cases were principally heard in Guangdong, Beijing and Zhejiang with about 70 percent of the cases.  Zhejiang jumped from fifth place last year to third place.   Fujian also showed a significant increase.  A large share of the audiovisual infringement cases in Guangdong involved Kuaibo (www.qvod.com).  The regional distribution of the cases also shows that there was a drop in audiovisual cases in Beijing, but an increase in other areas such as written works.  Most of the plaintiffs in Beijing were well known companies in such fields as motion pictures, cultural product distribution, and internet technologies, which in NCAC’s view could suggest a maturing of the Beijing environment towards protecting a greater variety of content owners.

The increase in cases in Zhejiang in online cases is due to the rapid increase in online industries in that province, which also has consequences for trademark counterfeiting. As I recently reported, online counterfeiting has also become a priority for China Customs in China, with Zhejiang also figuring prominently in seizures of exports at such ports as Hangzhou and Ningbo.

The report also notes that there were 30 online criminal copyright cases as well, and that fines and punishment had increased, with one fourth of the cases involving fines over 500,000 RMB.

Note that I tried to compare this data with the data that is available on www.ciela.cn.  Unfortunately the data sets do not match well.  CIELA analyzes data by cities and provides more granular detail on proceedings and outcomes (length of time, damages, “win” rates, etc.).  Moreover, CIELA does not breakout on-line copyright cases.  I was thus unable to reliably further validate NCA’s observations in this report.

The NCAC report was released on April 22, 2015.  However, with only 219 hits since it was placed on line as of today, it remains a “sleeper” of a report, notwithstanding the dramatic growth in online copyright issues in China.

SIPO’S 2012 National IP Development Situation Report

SIPO released a 71-page report on the 2012 National IP Development Situation (2012年全国知识产权发展状况报告) on June 5, 2013, the fifth anniversary of SIPO’s adoption of the National IP Strategy Outline.   Although this is the first report of this nature, it is contemplated that the report will be updated annually.  Continue reading

SIPO’s 2012 “Report on the Situation Regarding National Patent Strength”

SIPO’s recently released its  “Report on the Situation Regarding National Patent Strength”, (Chinese: “2012年全国专利实力状况报告”)This report provides a glimpse into the various measures that SIPO uses to quantify how local patent offices are being rated by SIPO.  Knowing these data can be very useful in understanding what the incentives are for evaluating innovation and patent protection in China’s various localities and, accordingly, can help in how a foreign company approaches a local IP office to better enlist their support.  In theory, it should also help in identifying the regions that are affording better patent protection in China to foreigners. 

 The report  is intended to be based on certain objective, common, sustainable, and easy to obtain data.  Some of the data that is used are:

(a)    Number of invention patents in effect held per capita.  This is the first item listed by SIPO and it does not include utility model and design patents, which are not substantively examined. 

(b)   Other patent data: including Patent Cooperation Treaty patent filings; patent maintenance rates; patent abandonment rates (as a negative factor).

(c)    Type of patent applicant data: service invention patent rates; patents filed by large and medium sized enterprises.

(d)   Commercialization data: ratio of R&D to patents filed; hypothecation of patents; licensing contracts for patents; patents that are being used in commercial production (based on a ratio of new products from high tech industries and patent applications from high tech industries); and awards for high quality patents.

(e)   Litigation and enforcement data: First instance patent cases in the courts; settlement rates for patent litigation; data on patent “passing off”; data on cross-boundary cooperation on administrative patent disputes; data on human resources in administrative patent enforcement, use of administrative complaint lines, and expenses for special enforcement campaigns.

(f)     Legal and administrative structure: SIPO is trying to encourage local patent offices to be active and independent of other agencies, such as Science and Technology Bureaus, in which some local patent offices are located.  In addition, SIPO is encouraging promulgation of local legislation on patents, including incorporation of the national IP strategy and economic plans into local level policy and actions.

(g)     Cooperation with SIPO on national projects: including recognition as a model locality for IP protection, or the presence of model enterprises for IP protection.

(h)   Services and civil society: presence of in-house IP departments in companies; presence and availability of Patent Agents; use of electronic filing mechanisms for patents and electronic information services; presence of public service organizations for patents (typically government-organized non-governmental organizations); participation in SIPO training programs (including distance learning programs).

The overall leaders in this statistically-intensive report: Guangdong, Beijing, Jiangsu, Zhejiang and Shanghai (in that order).   Comparative data to last year and to individual benchmarks are also provided.  These five leaders are not necessarily the leaders in other areas, including those that may be of concern to foreigners.  For example, in IP protection, the leaders were: Guangdong, Shandong, Hunan, Sichuan and Jiangsu.  Beijing and Shanghai were a more distant 11th and 16th place, respectively.  Beijing, Guangdong and Shanghai were also the top three jurisdictions for IP services.

The report should be used cautiously by foreign investors and rigthsholders as there is much  of concern to foreigners that is not utilized in the report, for example: numbers of foreign-related civil or administrative cases, availability of provisional measures, receptivity and accessibility of local complaint centers (including trade fairs) to  foreign complainants, availability of expert foreign language lawyers and service providers,  presence and engagement  of foreign-related civil society (INTA, QBPC, RDPAC, AmCham’s, etc.),  existence of policies that on their face discriminate or support foreign rights holders ,  availability of criminal remedies for IP infringement,  existence of “notorious markets” for IP infringing products, and evaluation of the locality by other reports on IP protection (e.g, annual Chamber reports, Section 301 reports).  In addition, as indicated above, the priorities that SIPO assigns to different factors would be different for foreigners.  Nonetheless, this is a useful report that can help foreigners in determining how “patent-friendly” different jurisdictions in China are, and can also assist in compiling a more narrowly focused report that highlights issues of concern to foreigners regarding IP protection in different regions of China.  

I also personally commend SIPO for its transparency in making this available on line.