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23 December 2020TrademarksRory O'Neill

China pledges harsher criminal penalties for IP infringers

China is set to impose heftier criminal penalties for IP infringement, according to draft reforms submitted to legislators this week.

State media outlet  Xinhua reported yesterday, December 22, that the maximum prison term for trademark and copyright infringement is set to be increased from seven years to 10 years.

The draft law would impose a minimum fixed-term of three years’ imprisonment on anyone who uses a trademark identical to a registered brand without permission of the rights owner, as well as a fine.

A jail term of greater than three years would be reserved for convicted criminals who knowingly sell counterfeits “if the amount of sale is huge or if the circumstances are especially serious,” Xinhua reported.

The proposed law has received the backing of the constitution and law committee of the National People's Congress (NPC), the country’s top legislative body.

The law will go to the NPC’s standing committee for approval at its current session, which began yesterday and will run until Saturday, December 26.

It is the latest in a round of legislative reforms designed to modernise China’s IP system and bolster legal protections for rights owners.

In October, Chinese officials approved reforms to the country’s patent laws which will take effect next June.

The reforms include statutory damages as high as RMB 5 million ($749,000) for offenders, which can be multiplied by five in the case of wilful patent infringement.

It will also be easier for patent owners to obtain preliminary injunctions, designed to restrict the activities of suspected infringers while legal proceedings are ongoing.

This year also marked the publication of new guidelines on the licensing of standard-essential patents (SEPs) in China which will guide competition regulators in assessing conduct in the market.

The drive to improve China’s IP laws has come amid fierce criticism from the US over China’s alleged enablement of IP theft.

The allegations, consistently denied by Chinese officials, range from state-sponsored theft of trade secrets, to a system of forced technology transfer from companies looking to enter the Chinese market.

China has pledged to improve its IP system and push through reforms as part of trade negotiations with the US.

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