Crimes of Intellectual Property Infringement in Criminal Amendment (XI)
1. The background of the enactment of the Amendment (XI) to the Criminal Law of the People’s Republic of China (the Amendment)
Currently, China is transforming from an intellectual property consumer to an intellectual property producer. In this process, China realizes the significance of the establishment of a sound legal system in terms of intellectual property protection gradually. Strengthening the protection and implementation of laws in relation to intellectual property is beneficial to make China an innovative country, develop innovative enterprises, and promote high-quality economic development. The conclusion of the first phase agreement of Sino-US trade negotiations is an important reason for the large-scale revision of the criminal law on the crime of infringing intellectual property rights.
There are 8 provisions in respect to the crimes in relation to infringing intellectual property in Section 7 Chapter III of Criminal Law (1997), and 7 of them have been revised, which is the section where the amendment is the most intensive field. Amended crimes in relation to the infringement of intellectual property consist of the following crimes: Crime of counterfeiting the registered trademark, Crimes of selling commodities with counterfeit registered trademarks, Crimes of illegally manufacturing and selling manufactured marks of registered trademarks, Crime of Counterfeiting Patent, Crime of copyright infringement, Crime of selling infringing copies, Crime of infringing on commercial secrets and Crime of stealing, prying into, buying, or illegally providing any trade secret for an overseas institution, organization or individual.
2. Expansion of protection of crimes in relation to intellectual property
A vital feature of the Amendment is the expansion of the protection.
Specifically, the Crime of counterfeiting registered trademarks in Article 213 of Criminal Law (1997) is amended as “the use of a trademark identical with a registered trademark on the same kind of goods and services without the permission of the owner of the registered trademark.” This amendment expands the scope of registered trademarks and adds service trademarks to the protection scope of the criminal law.
As for the amendment to the Crime of infringing on copyright, the Amendment extends the scope of the object of the crime to “copyright-related rights”, adds the means of “communicating to the public through the information network” in terms of communication channels, and adds “fine arts audio-visual works, and other works stipulated by laws and regulations” in terms of the types of works. In the meanwhile, the Amendment acknowledges the copyright of performers, providing that “reproducing and distributing and audio or video recording of, or communicating to the public through an information network, and performance without the permission of its performer” shall also be considered a crime of copyright infringement. Furthermore, the amendment also includes it as one of the cases of infringement of copyright that “intentionally evading or disrupting the technical measures taken by the right owner to protect the copyright or copyright-related rights for the sound recording or video recording product of their work, without the permission of the copyright owner or the copyright-related right owner.” It is a highlight of the Amendment that considering breaking the technical measures taken by the right to protect its rights as criminal behaviour, which is a significant change to the protection of copyright.
In the Crime of selling infringing copies, the amendment adds “other serious circumstances” after “the amount of illegal income is huge”, which means that the provision considers some acts whose illegal income is not up to a huge amount as crimes. However, the scope of “other serious circumstances” needs to be further clarified by subsequent judicial interpretation.
In addition, the amendment deletes the circumstance where infringement causes great losses to right holder of trade secrets” and replaces it with “serious circumstance”, which solves the problem that it is difficult to identify the major loss in judicial practice. In September 2020, the Supreme People’s Court and the Supreme People’s Procuratorate issued the <Interpretation on Several Issues Concerning the Specific Application of the Law in Handling Criminal Cases of Infringement of Intellectual Property Rights (III)>, which detailed the application of Article 219 of the Criminal Law(1997) in a large number of ways beneficial to cracking down on the crime of infringing on commercial secrets, including lowering the standard of prosecution and adjusting the “consequential offense” to the “behaviour offense” and so on. Nonetheless, these provisions are established on the interpretation of “causing great losses to right holder of trade secrets “or “causing particularly serious consequences” in Article 219. There were very few judicial cases concerning the crime of trade secrets before the Amendment, on account of the strict constitution of this crime. The amendment adapts to social changes and provides a good legal guarantee for the rapid and healthy development of high-tech enterprises in China.
Besides, the amendment adds the Crime of stealing, prying into, buying, or illegally providing any trade secret for an overseas institution, organization or individual as one of Article 219, to crack down on the increasingly rampant commercial espionage crime.
3. The harsher punishment for crimes in relation to intellectual property
Apart from the extension of protection, the Amendment increases the penalty on infringing intellectual property, which contributes to preventing intellectual property infringement effectively.
The Amendment increases to the penalties in relation to Article 213 (Crimes of counterfeiting the registered trademark), Article 214 (Crimes of selling commodities with counterfeit registered trademarks), Article 215 (Crimes of illegally manufacturing and selling manufactured marks of registered trademarks), Article 217 (Crime of copyright infringement), and Article 219 (Crime of infringing on commercial secrets). For instance, it deletes the sentences of detention and public surveillance of the above-mentioned crimes, and meanwhile, it changes the maximum sentence of these crimes from 7 years to 10 years. A similar amendment is presented in Crime of copyright infringement as well, replacing a 3-year sentence with a 5-year sentence. The obvious conclusion from revised provisions is that the amendment increases the penalty of crimes in relation to intellectual property.
4. Strengthening the protection of intellectual property rights
On 10th April 2018, General Secretary Xi Jinping delivered a speech titled <Openness for Prosperity and Innovation for a Future> at the opening ceremony of Boao Forum for Asia Annual Conference 2018. He pointed out that, “Strengthening intellectual property protection is the most important part of improving the intellectual property protection system…We will step up law enforcement, significantly raise the cost of violations, and give full play to the deterrent effect of the law.” Xi has fully emphasized the important value of intellectual property protection and called for greater efforts to crack down on infringement in relation to intellectual property. The reasons for the large-scale revision of intellectual property crimes in the Amendment are not only the implementation of the achievements of Sino-US trade negotiations, but also the implementation of the general secretary’s expectation on intellectual property protection.
In the past, the protection of intellectual property rights was more focused on civil and administrative protection, but the enactment of the Amendment provides a more powerful way to solve the problem of intellectual property infringement.