Opinions on Application of Law to Handling of Criminal Cases Involving IP Infringement

Specifying Issues Related to Jurisdiction, Effect of Evidence, Conviction and Sentencing

On 10 January 2011, the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security, and the Ministry of Justice issued in concert the Opinions on Several Issues Relating to Application of Law to Handling of Criminal Cases of Intellectual Property Infringement("the Opinions").

The Opinions comprise 16 articles and further specify issues related to application of law to dealing with emerging situations and problems encountered by the public security authorities, the people's procuratorates and the people's courts during recent years when handling criminal cases arising from IP infringement.

The Opinions cover the following three main aspects:

1) Procedure-related provisions: including jurisdiction over cases and rules of evidence. For instance, a criminal case arising from intellectual property infringement shall be entered on file for investigation by the public security authority of the place where the crime is committed, and if necessary, by the public security authority of the place where the suspect is domiciled.

Regarding the effect of the evidence collected and obtained by administrative enforcement authorities, the Opinions have provided respectively for evidence that is cross-examined and confirmed before court as usable criminal evidence and for evidence that shall be collected and prepared again under the law.

2) Qualitative issues: including the determination of "same kind of goods" and "trademark which is identical with the registered trademark" mentioned in Article 213 of the Chinese Criminal Law, "distribution" in Article 217 of the Chinese Criminal Law, "for the purpose of making profits" and "without authorisation from the copyright proprietor" in criminal cases of copyright infringement.

3) Conviction and sentencing standards: conviction and sentencing standards are specified for (uncommitted) crime of selling goods bearing forged registered trademark, (uncommitted) crime of selling illegally-made registered trademark representations, and the act of communicating infringing work on information network.

The Opinions also provide that for repeatedly committed acts of intellectual property infringement which are not administratively dealt with or criminally punished, the illegal business turnover, illegal profit or amount of sales is calculated accumulatively.

Where repeatedly committed acts of intellectual property infringement are not administratively dealt with within two years, and the accumulative amount is so large as to constitute a crime, the acts shall be convicted and punished under the law. As to the time limit for filing prosecution against committed criminal acts of intellectual property infringement, relevant provisions of the Criminal Law shall apply and the prosecution filed is not subject to the said two-year period.

The following table outlines the current conviction and sentencing standards for criminal crimes involving IP infringement in China after incorporating the new contents introduced by the Opinions.

Revised Conviction and Sentencing Standards for Criminal Crimes Involving IP Infringement

Charges	Sentencing Standards
	Fixed imprisonment or detention less than 3 years with a fine, or a fine alone	Fixed imprisonment of 3-7 years with a fine
Counterfeiting registered trademark (1 mark)	Illegal business turnover ≥ RMB 50,000 yuan	Illegal business turnover ≥ RMB 250,000 yuan
Counterfeiting registered trademark (1 mark)	Illegal gains ≥ RMB 30,000 yuan	Illegal gains ≥ RMB 150,000 yuan
Counterfeiting registered trademarks (2 or more marks)	Illegal business turnover ≥ RMB 30,000 yuan	Illegal business turnover ≥ RMB 150,000 yuan
Counterfeiting registered trademarks (2 or more marks)	Illegal gains ≥ RMB 20,000 yuan	Illegal gains ≥ RMB 100,000 yuan
Selling goods bearing forged registered trademark	Sales amount ≥ RMB 50,000 yuan	Sales amount ≥ RMB 250,000 yuan
Selling goods bearing forged registered trademark (uncommitted)	Value of goods unsold ≥ RMB 150,000 yuan	Value of goods unsold ≥ RMB 250,000 yuan
	Value of goods sold (< RMB 50,000 yuan) + Value of goods unsold ≥ RMB 150,000 yuan	Value of goods sold (< RMB 50,000 yuan) + Value of goods unsold ≥ RMB 250,000 yuan
Illegally making/selling illegally made registered trademark representation (1 mark)	Trademark representation infringed ≥ 20,000 pieces	Registered trademark representations sold or made ≥ 100,000 pieces
	Illegal business turnover ≥ RMB 50,000 yuan	Illegal business turnover ≥ RMB 250,000 yuan
	Illegal gains ≥ RMB 30,000 yuan	Illegal gains ≥ RMB 150,000 yuan
Illegally making/selling illegally made registered trademark representations (2 or more marks)	Trademark representations infringed ≥ 10,000 pieces	Registered trademark representations sold or made ≥ 50,000 pieces
	Illegal business turnover ≥ RMB 30,000 yuan	Illegal business turnover ≥ RMB 150,000 yuan
	Illegal gains ≥ RMB 20,000 yuan	Illegal gains ≥ RMB 100,000 yuan
Selling illegally made registered trademark representations (uncommitted)	Number of goods unsold (1 mark) ≥ 60,000 pieces
	Number of goods unsold (2 or more marks) ≥ 30,000 pieces
	Number of goods sold (< 20,000 pieces) + Number of goods unsold (1 mark) ≥ 60,000 pieces
	Number of goods sold (< 10,000 pieces) + Number of goods unsold (2 or more marks) ≥ 30,000 pieces
Passing off patent (1 patent)	Illegal business turnover ≥ RMB 200,000 yuan
	Illegal gains ≥ RMB 100,000 yuan
	Rightholder’s loss ≥ RMB 500,000 yuan
Passing off patents (2 or more patents)	Illegal business turnover ≥ RMB 100,000 yuan
Passing off patents (2 or more patents)	Illegal gains ≥ RMB 50,000 yuan
Infringing copyright	Illegal business turnover ≥ RMB 50,000 yuan	Illegal business turnover ≥ RMB 250,000 yuan
	Illegal gains ≥ RMB 30,000 yuan	Illegal gains ≥ RMB 150,000 yuan
	Illegal reproductions ≥ 500 pieces	Illegal reproductions ≥ 2,500 pieces
Infringing copyright (communicating through information network another party’s literary works, musical works, cinematographic works, TV works, works of fine arts, photographic works or video-recordings, products of sound or video recordings, computer software etc.)	Illegal business turnover ≥ RMB 50,000 yuan	Illegal business turnover ≥ RMB 250,000 yuan
	Number of other parties’ works communicated ≥ 500 pieces	Number of other parties’ works communicated ≥ 2, 500 pieces
	Number of times virtually clicked on communicated work of other parties ≥ 50,000 times	Number of times virtually clicked on communicated works of other parties ≥ 250, 000 times
	Where another party’s work is communicated by way of membership arrangement, the number of registered members ≥ 1,000 people	Where another party’s work is communicated by way of membership arrangement, the number of registered members ≥ 5,000 people
	The amount or quantity reaches a half or more of that mentioned in any two of the above 4 standards	The amount or quantity reaches a half or more of that mentioned in any two of the above 4 standards
Selling infringing reproductions	Illegal gains ≥ RMB 100,000 yuan
Infringing trade secret	Rightholder’s loss ≥ RMB 500,000 yuan	Rightholder’s loss ≥ RMB 2,500,000 yuan

Remark: The penalty for illegally making/selling illegally made registered trademark representations also includes sentencing to control of less than three years.