RCEP’s impact on IP protection in China

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On 15 November 2020, the Association of Southeast Asian Nations (ASEAN) member states – Indonesia, Thailand, Singapore, Malaysia, the Philippines, Vietnam, Brunei, Cambodia, Myanmar and Laos – together with China, Japan, South Korea, Australia and New Zealand signed the Regional Comprehensive Economic Partnership (RCEP).

As the world’s largest trade bloc, the RCEP covers trade in goods and services, investment, economic and technical co-operation, intellectual property (IP) and e-commerce, among others.

The objective of the IP chapter (chapter 11) of the RCEP is to promote deeper economic integration and co-operation through the effective and adequate creation, utilisation, protection and enforcement of IP rights. Some noteworthy provisions in the chapter that have impacted, or may impact, China’s IP protection landscape are worthy of discussion.

The RCEP will have some positive, albeit limited, impacts on IP protection in China. What is probably more interesting to see is how the RCEP will impact the enforcement of revised and new IP laws in China, as outlined below, and the further alignment of IP protection at the regional level.

In general, the IP chapter is built on the framework of various multilateral agreements to which China is a party, including the TRIPS [Trade-Related Aspects of Intellectual Property Rights] Agreement, the Berne Convention for the Protection of Literary and Artistic Works, the Paris Convention for the Protection of Industry Property, as well as other multilateral agreements administered by the World Intellectual Property Organisation (WIPO).

Most provisions in the IP chapter are in the form of principles, which are broad and have been drafted in relatively non-specific terms. This chapter has its unique features, however, when compared with other IP-focused multilateral agreements. For example, it dedicates a section on genetic resources, traditional knowledge and folklore, and unfair competition.

The vast majority of the provisions in the IP chapter have already been implemented in China, so this article focuses on the provisions that are yet to be fully implemented, or may impact the enforcement of the relevant laws and regulations.

Copyright and related rights

Protection for electronic rights management information. Pursuant to article 11.15 of the RCEP, each signatory is to protect electronic rights management information (RMI) by providing adequate and effective legal remedies against:

(a) Removing or altering electronic RMI; or

(b) Distributing, importing for distribution, broadcasting, communicating, or making available to the public copies of works, performances fixed in phonograms, or phonograms, knowing that electronic RMI has been removed or altered without authority.

A new provision has been introduced under the new Copyright Law (which was revised in November 2020 and will come into effect on 1 June 2021) on RMI, and this has fulfilled the article 11.15 requirement. Under article 51 of the new Copyright Law, the following actions must not be carried out without the right holder’s permission:

(1) Intentionally deleting or altering the RMI attached to the relevant works; and

(2) Making the relevant works available to the public where one knows, or should know, that the RMI attached to them has been deleted or altered without permission.

Such new provisions are helpful to copyright owners, as it is not always easy to hold parties that delete or alter electronic RMI, or distribute works with deleted or altered RMI, liable under the current framework. They also help the right owners protect their rights, and deter third parties from sharing copyrighted works over networks without permission.

Government use of software. Pursuant to article 11.17 of the RCEP, each signatory confirms its commitment to maintain appropriate laws, regulations or policies that provide for its central government to use only non-infringing computer software, and encourage its regional and local governments to adopt or maintain similar measures.

Back in 2013, the General Office of the State Council of China issued the Administrative Measures for Government Authorities to Use Legitimate Software to require all government authorities to use legitimate software. It is expected that China’s central government and local governments will follow the State Council’s administrative measures more strictly after the signing the RCEP.

Domain names

Pursuant to article 11.55 of the RCEP, each signatory must make available an appropriate procedure for the settlement of domain name disputes in connection with its system for the management of its country code top-level domain names. Such procedure is to be based on, or modelled along, the same line as the principles established in the Uniform Domain Name Dispute Resolution Policy (UDRP).

While China has already adopted a dispute settlement system regarding “.cn” domain names (CNUDRP) based on the principles established in the UDRP, a three-year limit has been imposed on CNUDRP actions regarding “.cn” domain names. For those “.cn” domain names that have already been registered for more than three years, the right owners will have to initiate civil actions in the competent courts to have the disputed domain names cancelled or transferred to the right owners. This can be time consuming and may incur substantial costs. Since the scope of article 11.55 is broad, it is uncertain whether China would lift the three-year limit for the purpose of the above-mentioned article.

Industrial designs

Pursuant to article 11.49(5) of the RCEP, each signatory confirms that protection is available for industrial designs embodied in a part of an article, or having a particular regard to a part of an article in the context of the article as a whole. This aims at providing broader protection for industrial designs of an article as a whole, and not just part of it.

This provision has been implemented under the recently amended Patent Law, which was revised in October 2020 and will come into effect on 1 June 2021. Article 2 of the new Patent Law makes it clear that the designs covered under the legislation include designs of an article as a whole, as well as that embodied in a part of an article.

Enforcement

A considerable portion of the enforcement section of the RCEP merely reaffirms the rights and obligations concerning civil, criminal and administrative procedures and remedies, as well as the provisional and border measures under the TRIPS Agreement.

However, article 11.62 of the RCEP does impose greater obligations on the signatories concerning the destruction of pirated copyright goods and counterfeit trademark goods, as well as the materials and implements used to produce such infringing goods. Under article 11.62, each signatory must provide that, in civil judicial proceedings, its judicial authorities have the authority to:

(1) At least upon a right holder’s request, order the destruction of pirated copyright goods and counterfeit trademark goods, except in exceptional circumstances, without compensation of any sort; and

(2) Order the disposal of materials and implements, the predominant use of which has been in the creation of such infringing goods, without compensation of any sort.

The above-mentioned provisions, especially that set out in sub-paragraph (b), further strengthen IP protection by minimising the risks of further infringement.

Unfortunately, the signatories have not reached an agreement on the same obligations with respect to other types of IP rights, such as patents and trade names.

The Trademark Law (revised in 2019) and the new Copyright Law have already incorporated corresponding provisions that give the judicial authorities the authority to destroy the infringing goods, materials and implements. These are welcome additions to strengthen IP protection in China, as Chinese courts generally do not issue such orders in practice.

Although article 11.62 does not cover infringing goods in patent or other IP infringement cases, one notes from juridical practice that Chinese courts are willing to issue such orders in other IP infringement cases, and it is expected that such practice will be more common in the future.

Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker McKenzie by e-mailing Howard Wu (Shanghai) at howard.wu@bakermckenzie.com