Since the government announced its plan to reorganise various government agencies in March 2018, foreign brand owners have been wondering how it will affect the IP sector.
In August 2018 China's State Intellectual Property Office (SIPO) was renamed the National Intellectual Property Administration (CNIPA). Shen Changyu, former SIPO commissioner, was appointed as commissioner of the CNIPA and Liu Junchen, former vice commissioner for the State Administration for Industry and Commerce (SAIC), was appointed one of six vice commissioners.
At the same time, the activities of the SAIC (trademarks and competition), the SIPO (patents), the General Administration of Quality Supervision, Inspection and Quarantine (product quality) and the China Food and Drugs Administration were regrouped under the State Administration for Market Regulation (SAMR). Zhang Mao, ex-commissioner of the SAIC, was appointed commissioner of the SAMR.
In September 2018 the State Commission Office for Public Sector Reform (SCOPSR) published two sets of guidelines:
- The Regulations on the Function, Organisational Structure and Staffing of the State Administration for Market Regulation (the SAMR regulations) were published on 10 September 2018 and came into force retroactively on 30 July 2018.
- The Regulations on the Function, Organisational Structure and Staffing of the National Intellectual Property Administration (the CNIPA regulations) were released on 11 September 2018 and came into force retroactively on 1 August 2018.
The SCOPSR is the executive organ of the Central Institutional Organisation Commission, a governmental agency which specialises in:
- policymaking following administrative reform;
- central reorganisation plans;
- quotas; and
- administrative regulations for state institutions.
In a nutshell, the commission is a so-called 'super agency', which decides on the constitution and running of other government agencies.
The SAMR regulations outline the administration's IP rights-related functions as follows:
- orchestrating major enforcement programmes;
- supervising and regulating market transactions, online commodity trading and the services thereof;
- organising and overseeing the enforcement of trademark and patent infringements and the manufacturing and sale of counterfeits or shoddy goods; and
- supervising the advertising industry and advertising activities.
These functions are expected to be fulfilled by the agency's bureaus – namely:
- the Enforcement Inspection Bureau;
- the Anti-monopoly Bureau;
- the Internet Transaction Administration Bureau;
- the Price Probe and Anti-unfair Competition Bureau; and
- the Advertising Administration Bureau.
According to the regulation, the Enforcement Inspection Bureau is tasked with organising and overseeing investigations into and enforcement of cases of national implication or which have trans-provincial/municipal geographical reaching. Thus, brand owners should approach the bureau to initiate nationwide or trans-provincial/municipal IP enforcement actions.
IP rights enforcement regarding trademark and patent infringement, counterfeiting and unfair competition also falls under the Enforcement Inspection Bureau's jurisdiction. However, given the top-down nature of the institutional reorganisation, a nationwide administration for market regulation (AMR) network has yet to be formed. For instance, there is no Beijing AMR yet, which could be problematic. The IP rights enforcement functions of the CNIPA and local IP offices have been de facto transferred to the SAMR and its local offices. However, in regions with no local AMR, brand owners will need to resort to their local IP office and the Market Supervision and Administration Office (equivalent to local administrations of industry and commerce with respect to function) to enforce their IP rights.
According to the CNIPA regulations, its functions include the following.
Drafting and execution of national IP rights strategy The CNIPA will formulate major policies and initiatives and develop plans to transform China into an IP powerhouse. It will also develop and execute administrative policies and mechanisms to promote IP innovation, protection and use.
IP rights protection The CNIPA will devise and implement protection mechanisms for trademarks, patents, geographical indications (GIs) and layout designs of integrated circuits. It will also draft laws, regulations and departmental rules and oversee the execution thereof. Further, it will oversee trademark and patent enforcement and supervise IP dispute resolution, enforcement aid and dispute mediation at the local level.
Examination, registration and administrative adjudication of IP rights The CNIPA will be responsible for trademark registration, patent examination and the registration of layout designs of integrated circuits. It will also be responsible for re-examination, invalidation and other administrative adjudication of trademarks, patents and layout designs of integrated circuits, as well as the drafting and execution of integrated GI assessment mechanisms.
Additional functions The CNIPA regulations explicitly task the agency with shortening the IP registration cycle and enhancing examination quality and efficiency. It has also been instructed to focus on bad-faith trademark filings and unproductive patent applications.
Given that the China Trademark Office and the Trademark Review and Adjudication Board have been incorporated into the CNIPA, the application and granting of trademarks, patents, layout designs of integrated circuits and GIs are under the independent governance of the CNIPA.
Most importantly, the SAMR and CNIPA guidelines address the division of labour between the SAMR and the CNIPA with respect to IP rights enforcement as follows:
The SAMR organises and oversees trademark and patent enforcement.
The CNIPA coaches the trademark and patent enforcement practice, sets criteria for the affirmation of trademark and patent rights and for the ascertaining of trademark and patent infringement and oversees the execution thereof, as well as sets parameters for the inspection, authentication and other practices in trademark and patent enforcement.
Thus, it seems that the CNIPA is expected to devise a set of criteria and practice manuals on IP infringement, which the SAMR will follow in its enforcement actions.
The CNIPA regulations also contain the following brief and very vague reference to copyright: "copyright administration shall be in compliance with the regulations on the division of labor promulgated by the Central Committee of China Communist Party and the State Council".
It remains to be seen whether the SCOPSR will release a similar document on the National Copyright Administration in the near future.
For further information on this topic please contact Bai Gang at Wanhuida Peksung? by telephone (+86 10 6892 1000) or email (firstname.lastname@example.org). The Wanhuida Peksung? website can be accessed at www.wanhuida.com and www.peksung.com.
An earlier version of this article was first published in the International Trademark Association Bulletin Vol 73, No 19, 1 November 2018.
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