China: surge in IP crime prosecutions indicates effectiveness of multi-pronged approach to trademark enforcement

China: surge in IP crime prosecutions indicates effectiveness of multi-pronged approach to trademark enforcement

This is an Insight article, written by a selected contributor as part of WTR's co-published content. Read more on Insight

With the proliferation of e-commerce and the platform economy, Internet sales in counterfeits from China have exploded in recent years. China is estimated to produce 80% of the world’s counterfeits,[1] and together with Hong Kong, accounted for 75% of the value of counterfeit and pirated goods seized by US Customs and Border Protection in 2021.[2] Continued growth in the counterfeiting industry is anticipated. In China’s legal system, the administrative bodies, the Public Security Bureau and the judiciary have overlapping authority to enforce against counterfeiting. While rights holders can choose which enforcement avenue to engage first, China is now further promoting the ‘three-in-one’ trial reform of intellectual property rights to improve collaboration and build a more comprehensive system of protection. This is a combination of (i) civil litigation, (ii) criminal investigation and litigation, and (iii) administrative investigation and prosecution..,

In recent years, China has placed specific emphasis on strengthening the nation’s IP infrastructure. In July 2023, the Inter-ministerial Joint Conference Office for the Implementation of the Intellectual Property Strategy of the State Council released the 2023 Outline for Building a Powerful Intellectual Property Nation and the Implementation Promotion Plan of the ‘14th Five-Year Plan’. This document puts forward a system for various departments to improve the IP system on multiple levels and sets out plans for joint efforts against infringement and counterfeiting.

In 2023, the Supreme People’s Court issued a decision to amend the Regulations of the Supreme People’s Court on Several Issues Concerning Intellectual Property Courts. Under this amendment, the Intellectual Property Courts may require parties to disclose the ownership, infringement, authorisation and confirmation of IP rights involved in their case and other related cases. If a party refuses to provide full and frank disclosure, this can be taken into consideration when determining whether it has followed the principle of good faith and whether its actions constitute an abuse of rights.

In June 2023, the State Administration for Market Regulation issued the Regulations on Prohibiting the Abuse of Intellectual Property Rights to Exclude or Restrict Competition. With the overarching aim of promoting competition and innovation and in line with Article 55 of the China Anti-Monopoly Law, these provisions prohibit the abuse of IP rights to exclude or restrict competition, such as by entering into monopolistic agreements or abusing a dominant market position. In March 2023, the State Intellectual Property Office issued the Notice on Issuing the National Intellectual Property Administrative Protection Work Plan for 2023. This sets out a plan to strengthen IP protection nationwide and build a world-class innovation and business environment. It specifies certain ‘key areas’ for strengthened protection, including overseas IP protection, IP in major events such as exhibitions and sporting competitions, and e-commerce platforms. It also calls for the promotion of public awareness of IP protection nationwide. The 2023 Guidelines for Assistance in Intellectual Property Rights Protection issued by the State Intellectual Property Office set out enhanced directions to IP rights protection assistance centres. There are currently over 1,300 of these assistance centres across the country. Volunteers from universities, research institutes and judicial agencies assist with IP issues and raise public awareness through hotlines, publicity activities and online rights protection platforms.