Cedric Lam's overview of IP in China developments

Cedric Lam, attorney at Dorsey & Whitney LLP, wrote an overview of last year's IP in China developments.

Among other things Lam summarised the thresholds for criminal enforcements:

Trademark counterfeiting

Maximum punishment of three years’ imprisonment and/or a fine:

• For individual counterfeiters: illegal turnover exceeding having US$6,200 or US$3,700 if two or more registered trademarks are involved;
• For manufacturers/vendors: dealing with more than 20,000 copies of counterfeit trademark representations or 10,000 copies if two or more registered trademarks are involved.

Maximum punishment of seven years’ imprisonment and a fine:

• If illegal turnover exceeds US$31,000 or US$18,500 if two or more registered trademarks are involved, or where more than 100,000 copies of counterfeit trademark representations or 50,000 copies if two or more registered trademarks are involved.

Copyright piracy

Maximum punishment of three years' imprisonment and/or a fine:

• For individual counterfeiters: who engage in copyright infringement for the purposes of gain and have an illegal turnover exceeding US$6,200, have an illegal income exceeding US$3,700 or reproduce more than 1,000 unauthorised copies of copyrighted works;
• For indiviual resellers who engage in copyright infringement for the purposes of gain and have an illegal income exceeding US$12,400.

Maximum punishment of seven years’ imprisonment and a fine:

• If illegal turnover exceeds US$31,000, the illegal income exceeds US$18,500 or where more than 5,000 unauthorised copies of copyrighted works are involved.

Passing off patents
Maximum punishment of three years’ imprisonment:

Patent infringement is not a criminal offence in China. However, passing off the patent of another (eg, by reproducing a patent number without the authorisation of the patent owner) can incur criminal sanctions and carries a maximum and/or a fine where the illegal turnover exceeds US$24,800 or US$12,400 if two or more patents are involved, the illegal income exceeds US$12,400 or US$6,200 if two or more patents are involved or the losses caused to the patent owner exceed US$62,000.

Lam: "However, the distinction between individual and corporate IP wrongdoers that is made under the original law remains. Nonetheless, the judicial interpretation makes it easier to hold corporate counterfeiters criminally responsible. The thresholds for corporate counterfeiters have now been reduced from five times to three times those applicable to an individual. Notably, the former rule that made it easier to bring criminal prosecution against repeat offenders has been removed. The judicial interpretation clarifies the meaning of certain terms (eg, ‘knowingly’) that are used in defining the IP crimes above. Furthermore, it stipulates that persons who knowingly assist counterfeiters (eg, by providing funding, premises or transportation) can be criminally charged as accomplices."

Read more of Lam's overview on the site of Dorsey here (pdf) or on Mondaq here .