China Raises The Bar On IP Criminal Offences

Starting from March 1st, the maximum sentence for Intellectual Property Rights infringement is 10 years!

In the 24th Session of the Standing Committee of the Thirteenth National People's Congress enacted the 11th Amendment to the Criminal Law of the People's Republic of China, which will be effective as of March 1, 2021.

In addition to lowering the age of punishment for juveniles, this amendment to the Criminal Law also revised the provisions on intellectual property offences. Among them, "the maximum punishment for intellectual property offences was raised to 10 years" attracted much attention.

In the provisions on the offence of counterfeiting registered trademarks, the 11th Amendment to the Criminal Law added the protection of "service trademarks". In accordance with the recently revised Copyright Law, the provisions on offences involving copyright infringement or copyright-related rights have been revised to intensify the crack down on copyright infringement.

Moreover, the 11th Amendment to the Criminal Law has added "the offence of commercial espionage" as a supplement to the types of criminal acts violating commercial secrets.

To be specific, there are 8 amendments made to the intellectual property part of the Criminal Law. Details are as follows:

17. Article 213 of the Criminal Law is amended as:

"Whoever, without the permission of the owner of a registered trademark, uses a trademark that is identical with a registered trademark on the same kind of goods or services, if the circumstances are serious, shall be sentenced to set term imprisonment of not more than three years and shall also, or shall only, be fined; If the circumstances are especially serious, shall be sentenced to set term imprisonment of more than three years but no more than 10 years and shall also be fined."

18. Article 214 of the Criminal Law is amended as:

"Whoever knowingly sells commodities with counterfeit registered trademarks, if the amount of illegal income is relatively large or if there is other serious circumstance involved, shall be sentenced to set term imprisonment of no more than three years and shall also, or shall only, be fined; If the amount of illegal income is huge, or if there is other especially serious circumstance, shall be sentenced to set term imprisonment of more than three years but no more than 10 years and shall also be fined."

19. Article 215 of the Criminal Law is amended as:

"Whoever forges or makes representations of a registered trademark of another person without authorization or sells such representations of a registered trademark, if the circumstances are serious, shall be sentenced to set term imprisonment of no more than three years and shall also, or shall only, be fined; If the circumstances are especially serious, shall be sentenced to set term imprisonment of more than three years but no more than 10 years and shall also be fined."

20. Article 217 of the Criminal Law is amended as:

"Whoever, for the purpose of making profits, commits any of the following acts of infringement of copyright or copyright-related rights, if the amount of illegal income is relatively large or if there are other serious circumstances, shall be sentenced to set term imprisonment of no more than three years and shall also, or shall only, be fined; If the amount of illegal income is huge, or if there are other especially serious circumstances, shall be sentenced to set term imprisonment of more than three years but no more than 10 years and shall also be fined:

(1) Without the permission of the copyright owner, reproducing and distributing or disseminating written works, music, fine arts, audio-visual works, computer software and other works stipulated by laws and administrative regulations to the public through information networks;

(2) Publishing a book in which another person has the exclusive right of publication;

(3) Reproducing and distributing a sound recording or video recording or disseminating to the public through information networks without the permission of the producer of the sound recording or video recording;

(4) Without the permission of the performer, reproducing and distributing a sound recording or video recording product containing his performance, or disseminating his performance to the public through information networks;

(5) Producing or selling an artwork with forged signature of another person;

(6) Without the permission of the copyright owner or the copyright-related owner, deliberately avoids or undermines the technical measures taken by the right owner for the protection of copyright or copyright-related rights in his work, sound recording or video recording product."

21. Article 218 of the Criminal Law is amended as:

"Whoever, for the purpose of making profits, knowingly sells infringing reproductions as prescribed in Article 217 of this Law, if the amount of illegal income is huge or if there are other serious circumstances, shall be sentenced to set term imprisonment of no more than five years and shall also, or shall only, be fined."

22. Article 219 of the Criminal Law is amended as:

"Whoever commits any of the following acts of infringing upon commercial secrets, if the circumstances are serious, shall be sentenced to set term imprisonment of no more than three years and shall also, or shall only, be fined; If the circumstances are especially serious, he shall be sentenced to set term imprisonment of more than three years but no more than 10 years and shall also be fined:

(1) Obtaining the commercial secrets of the obligee by theft, bribery, fraud, coercion, electronic intrusion or other illegitimate means;

(2) Disclosing, using or allowing another person to use the commercial secrets of the obligee obtained by the means mentioned in the preceding paragraph;

(3) In breach of confidentiality, or violating the obligee’s requirements for keeping commercial secrets, disclosing, using or allowing others to use the commerical secrets they have obtained.

Anyone who knowingly obtains, discloses, uses or allows another person to use the commercial secret shall be deemed to have infringed upon the commercial secret.

The obligee mentioned in this Article refers to the owner of the commercial secret and the person who is permitted by the owner to use the commercial secret."

23. A new article is inserted after Article 219 of the Criminal Law as one of Article 219:

"Whoever steals, spies on, buys or illegally provides commercial secrets for an institution, organization or person overseas shall be sentenced to set term imprisonment of no more than five years and shall also, or shall only, be fined; If the circumstances are serious, he shall be sentenced to set term imprisonment of more than five years and shall also be fined."

24. Article 220 of the Criminal Law shall be amended as:

"Where an organization commits the offence mentioned in Articles 213 through 219 (1) of this Section, it shall be fined, and whoever directly in charge and the other persons who are directly responsible for the offence shall be penalized in accordance with the provisions of each Article in this Section."