1. The Latest Development of China’s Judicial Protection for Intellectual Property Mr. Ren Weihua Deputy-Chief Justice, No. 2 Criminal Division, the Supreme People’s Court, PRC May 26, 2005, Washington D.C.

2. Overview of IP judicial protection l IPRs in China are not only protected by civil law, but also by administrative and criminal law. l Three forms of IP judicial protection: – Civil action: infringee v. infringer – Administrative action (Judicial review): infringee or infringer v. Administration – Criminal action: prosecutor / victim v. infringer

3. Most significant progresses in 2004 l Issuance of Judicial Interpretations on IP crimes (17 Articles, Dec 8, 2004) – SPC’s major research project on IP criminal protection in 2002 – Drafting JI started in the end of 2003 – Wide consultations with governmental agencies, experts, IP right holders, etc. Wide consultations l Publication of Judicial Interpretations on the Trial of Technology Contract Disputes (47 Articles, Dec 16, 2004)

4. 2004 IP Crimes JI - Consultations l Consultations with: – American Chamber of Commerce in China （ AmCham-China ） – Business Software Alliance (BSA) – Motion Picture Association of America (MPA) – US Information Technology Office (USITO) – China Association of Enterprises with Foreign Investment (CAEFI) / Quality Brands Protection Committee (QBPC)

5. Keynotes of 2004 IP Crimes JI - 1 l Clarify the criteria & lower the threshold, e.g.: – “Illegal business volume”: from RMB 100,000 (US$ 12,000) & RMB 200,000 (US$ 24,000) to RMB 50,000 (US$ 6,000) – “Illegal gains”: from RMB 50,000 (US$ 6,000) to RMB 30,000 (US$ 3,600)

6. Keynotes of 2004 IP Crimes JI - 2 l Clarify legislative concepts, e.g.: – ”reproducing and distributing”reproducing and distributing – “illegal business volume”illegal business volume – “identical TM” – ”use TM” – ”knowingly sell” – ”counterfeit patent” – ”for the purpose of making profits” – “without permission of copyright owner”

7. Online piracy - “reproducing & distributing” on Internet l Art 11.3: the right of communication of information on networks: – “Distributing a written work, musical work, motion picture, television program or other visual works, computer software or other works to the public by information network falls under the definition of ‘reproducing and distributing’ stipulated in Article 217 of the Criminal Law. ”

8. Illegal business volume l Art.12.1: illegal business volume: – Value of the products produced, stored, transported and sold – Value of the products by infringing on IP ä sold: actually sold prices ä produced, stored, transported and unsold: labeled prices or the actual sold prices to be found in average ä without labeled prices or actual sold prices : middle market prices of such products

9. Keynotes of 2004 IP Crimes JI – 3 l Penalty principle of concurrent offense: – choosing a serious crime (Art 13.1 & 14.1) l Joinder of punishments for plural crimes (Art 13.2 & 14.2) l Standard for corporate crime (Art 15): – 3 times individual criteria (used to be 5 times) l Joint offense (Art 16): – e.g., knowingly provide import-export agency services

10. Case load - 1 l 2004: 8,717 IP infringement cases concluded: – Rose by 19.76% – Incl. 385 criminal cases & 528 criminals – 3,056 IP related criminals were sentenced under other crimes l Sep, 2004–Mar, 2005 (Special Campaign–): – 527 IP criminals & 3,553 other IP related criminals were sentenced l Jan - Mar, 2005 (Issuance of JI): – Courts received all IP related criminal cases increased by 18.9% l Criminal cases would be evidently increased this year & later on

11. Case load - 2 l Preliminary measures: up to Oct, 2004, 6 provinces’ incomplete statistic: – 257 applications for pre-trial preliminary injunction & preservation of evidence, 183 granted (approval rate: 71.21%) l Recognition of well-known trademarks – Up to Apr, 2005: 29 well-known TMs, incl. 6 foreigner’s TMs, e.g.: ä “ 沃尔玛 ” （ “Wal-Mart” in Chinese ） ä “DUPONT” ä “safeguard / 舒肤佳 ” (combined TM)

12. Recent IP cases related to US - 1 l Prosecutor v Feng Shenwei & Others: – Selling shampoo bearing P&G’s ”Rejoice”, “Head & Shoulders” & other TMs, illegal gains of RMB 150,000 （ US$ 18,000 ） – Held by Xihu District Court, Hangzhou, Zhejiang Province, August 3, 2004 – Crime of selling merchandise under a faked TM – Imprisonment and criminal fine of RMB 50,000 （ US$ 6,000 ）

13. Recent IP cases related to US - 2 l Prosecutor v Randolph Hobson Guthrie III & Others: – Selling 133,000 pirated DVDs via www.threedollardvd.com, illegal gains of RMB 970,000 （ US$117,000 ） www.threedollardvd.com – Held by No.2 Intermediate Court of Shanghai, Apr 19, 2005 ä Crime of selling infringed duplicate works ä Guthrie: 2 years & 6 month imprisonment, criminal fine RMB 500,000 (US$ 60,000), deportation, confiscation of illegal gains and instrument of crime

14. Recent IP cases related to US - 3 l Educational Testing Service (ETS) / Graduate Management Admission Council (GMAC) v Privately-Run Beijing New Oriental Language School (3 cases respectively): – Reproducing, distributing & selling TOEFL, GRE, GMAT test questions without authorization – Held by Beijing High Court, Dec 27, 2004 ä Copyright infringements ä Compensation to ETS RMB 6,170,959.4 (US$ 746,186) ä Compensation to GMAC RMB 2,430,773.2 (US$ 29,3926) ä Pay reasonable expense for each action of RMB 22,000 (US$ 2,660)

15. Recent IP cases related to US - 4 l Autodesk Inc. v Beijing Longfa construction & decoration Ltd.: – Reproducing & installing Autodesk’s 5 kinds of software (3ds Max 3.0 、 3ds Max 4.0 、 3ds Max5.0 、 AutoCAD4.0 、 AutoCAD2000) without authorization – Held by No.2 Intermediate Court of Beijing and Beijing High Court, Dec, 2004 ä Software copyright infringements, ä Compensation of RMB 1,490,000 (US$ 180,000) ä Pay reasonable expense RMB 32,250 (US$ 3,900) ä Public apology, elimination of ill effects

16. Recent IP cases related to US - 5 l Wal-Mart Stores Inc. v Tong Xiaoju & Others: – Using “ 沃尔玛 ” (Wal-Mart in Chinese) as trade name and domain name – Held by Shenzhen Intermediate Court, Jun 22, 2004 ä “ 沃尔玛 ” is a Chinese well-known TM, ä Trademark infringement and unfair competition ä Cessation of using in trade name ä Cancellation of the domain name ä Compensation of RMB 120,000 (US$ 14,510)

17. Recent IP cases related to US - 6 l Winning Laboratories Inc. v Tianjin Wanning pharmaceuticals Ltd.: – Application for preservation of evidence – Granted by No.2 Tianjin Intermediate Court, Feb 6, 2005 (within 24 hours after filing the application) – Executed by the court immediately to take respondent’s all related materials, incl. account books, invoice of sale, dock warrant, recordings of business

18. Thank you & contact me ！ l See more information, please to: www.chinaiprlaw.cn www.chinaiprlaw.cn l Tel: 86-10-85256114 l Add: No.27, Dongjiaominxiang, Beijing 100745, PRC