Answers by Beijing Municipal Higher People's Court of Several Questions Relating to Application of Law to Foreign-related Civil IP Cases

No. Jinggaofafa 49/2004
(18 February 2004)

 


I. How to understand the scope of "foreigners" in the Answers?

Answer: The "foreigners" in the Answers refer to natural persons and legal entities of foreign nationality and stateless natural persons.

II. What are the civil IP cases in the Answers?

Answer: The civil IP cases in the Answers are cases involving infringement and ownership of the patent right, trademark right and copyright, and cases of unfair competition.

III. How does China protect foreigners' intellectual property rights?

Answer: The Chinese laws, such as the Copyright Law, the Patent Law, the Trademark Law and the Unfair Competition Law, have provided for the following protections of foreigners' intellectual property rights:

(i) Protection of Foreigners' Works

1. Unilateral protection. Under Article 2, paragraph three of the Copyright Law, works of foreigners or stateless persons first published in the territory of China are eligible for copyright under the Copyright Law;

2. Protection under bilateral agreements or international treaties to which China and the related foreign countries are party. Under Article 2, paragraph two of the Copyright Law, any work of a foreigner or stateless person which is eligible for copyright under an agreement concluded between China and the country to which the foreigner belongs or in which he/it has habitual residence, or under an international treaty to which both countries are party, shall be protected under the Copyright Law.

(ii) Protection of Foreigners' Invention-Creations

Foreigners' patent right acquired for their invention-creations in foreigner countries do not have legal validity in China. To protect their invention-creations in China, they must apply for and acquire patent in China.

1. Foreigners having habitual residence or business office in China may apply for and be granted patent in China;

2. Foreigners, foreign enterprises or other foreign organisations having no habitual residence or business office in China may apply for patent in China under the agreement concluded between the country to which the applicants belong and China, or under the international treaty to which both countries are party.

3. Foreigners' invention-creations are accorded the patent protection according to the principle of reciprocity.

(iii) Protection of Foreigners' Trademarks.

1. Foreigners may apply for trademark registration in China pursuant to the agreement concluded between China and the related foreign countries, or in accordance with any international treaty to which both countries are party.

2. Any foreigner from a country that has neither concluded a bilateral agreement with China, nor is part to any international treaty may acquire the trademark right in China according to the principle of reciprocity.

3. Foreigners' well known trademarks that are not registered in China are protected under the Chinese law.

(iv) Protection of Foreigners against Unfair Competition at Request

The Chinese laws accord foreigners of countries that have concluded bilateral agreement with China, or which, together with China, is part to an international treaty protection against unfair competition at request for cessation thereof.

IV. What role do international IP treaties play in foreign-related IP trials?

Answer: In international protection of the intellectual property rights, the role of an international treaty is to harmonise the national IP laws, facilitate the member states to recognise and protect foreigners' intellectual property rights according to the requirements of the international treaties and under the national laws. When concluding or acceding to an international treaty, a country is only committed to protect the intellectual property rights of the nationals of member states thereof, but the protection is specifically based not on the international treaty, but mainly on the national law. Only when the protection under the national law is below the level as required under the international treaty is the international treaty to be complied with. Therefore, in foreign-related IP trials, where a foreigner requests IP protection in China, unless otherwise provided for in the Chinese laws, it is first considered whether the country the foreigner claiming the right belongs to has acceded, with China, to the international treaty and whether China is committed to accord the national of the country the IP protection; then, when the relevant IP law applies to the protection of said foreigner's intellectual property right, it is necessary to consider whether the standards of protection under the relevant Chinese laws meet the requirements of the international treaty.

V. Are cases foreign-related civil IP cases where two interested parties are Chinese citizens, legal entities or other organisations, but the infringing act takes place in a foreign country, or the subject matter of the infringed right is in a foreign country?

Answer: According to the provision of Article 304 of the Opinions of the Supreme People's Court on Several Issues relating to the Application of the Civil Procedure Law of the People's Republic of China, cases in which interested parties are foreigners, the legal fact takes place in a foreign country, or the subject matter of the infringed right is in a foreign country are foreign-related civil cases. Therefore, although the two interested parties are Chinese citizens, legal entities or other organisations, the act of infringement of the IP right takes place in a foreign country, or the subject matter of the infringed right is in a foreign country. Cases of the nature are foreign-related civil IP cases.

VI. Are counterclaims tenable which are made by infringers or actors of unfair competition on the grounds that their acts are lawfully authorised by rightholders who have acquired the right in foreign countries in cases of infringement of the patent right or trademark right or cases of unfair competition?

Answer: The validity of an intellectual property right acquired in a country is confined to the scope of that country. The patent right or trademark right enjoyed by a person enjoying the national treatment in the member states of the Paris Convention in respect of the same invention or the same trademark is mutually independent and free from mutual effect; hence, the patent right or trademark which a rightholder has acquired in a foreign country is not valid in China, and the accused infringer cannot make counterclaim on the grounds that his/its act is lawfully authorised by a rightholder who has acquired the patent right or trademark right in a foreign country for the involved technology, design or trademark.

VII. Can an author of a country that has not concluded agreement with China or which is not, with China, party to an international treaty claim his/its copyright?

Answer: The copyright of an author from a country that has not concluded agreement with China or which is not, with China, party to an international treaty must meet one of the following requirements to be protected under the Chinese law:

(1) The foreigner's work is first published in China; and

(2) The foreigner's work is first published in a member state of an international treaty to which China is party, or simultaneously published both in a member, or in a non-member, state.

VII. How to Determine the Relations between a Foreigner Claiming His/Its Right and an Relevant International Treaty?

Answer: China protects foreigners' intellectual property rights substantially on the basis of its obligation under the international treaties China has concluded or acceded to; hence, determination of the relations between a foreigner claiming his/its right and an relevant international treaty is the premise of trying a foreign-related civil IP case.

Under the Paris Convention, this relation is determined by one of the three factors: nationality, residence and business office. Where a country in which a natural person is of the nationality is a member state of the Convention or one in which a legal entity has been registered according to law and has acquired the legal entity qualification is part to the Convention, and where a natural person who is a national of a non-member state has residence recoganised by law in a member state or a legal entity from a non-member state has a true and valid business office, these natural persons or legal entitles may claim their rights in China.

The Berne Convention determines whether an author may claim his/its right on the basis of a natural person's nationality, habitual residence, nationality of a work and a special work (such as architecture and motion picture). The protection under the Convention may be claimed by (1) any natural person having the nationality of a member state; (2) natural person who has no nationality of, but has a "habitual residence" in, a member state; (3) a person who is not a national of, but his work is first published in, a member state, or simultaneously in a non-member state or a member state; (4) a producer of a cinematographic work which has its headquarters or habitual residence in a member state of the Convention; and (5) if, in case of an architectural work, the architecture or any other artistic work incorporated in an architecture or in the structure thereof stands or is situated in any member state.

The Universal Copyright Convention determines whether an author is eligible to the protection provided for therein on the basis of relevant points of nationality, residence and nationality of works. Any author who has the nationality of a member state of the Convention, or has residence in any member state, or has first published his work in the territory of a member state may claim protection under the Convention.

The Convention for the Protection of Producers of Phonograms Against Unauthorised Duplication of Their Phonograms (Phonograms Convention) determines whether an author is eligible to the protection provided for therein on the basis of nationality. A producer having the nationality of any member state thereof is eligible to the protection.

IX. Where a foreigner requests for cessation of an act of unfair competition executed in China, or claims copyright in China in a work published in a foreign country, is it necessary to determine that he/it has the right to claim the right or the right claimed is under the legal protection in China?

Answer: China is committed to protect the copyright of foreigners against unfair competition mainly through a bilateral agreement or international treaty. A foreigner whose work is first published in China enjoys the copyright under the Chinese Copyright Law. Therefore, during the trial of a case where a foreigner claims copyright in China or requests cessation of execution of an unfair competition act in China, it should be first determined, under the Chinese law and the international treaty which China has concluded or acceded to, whether said foreigner has the right to claim the right in China or whether the claimed right is under the legal protection in China, with the exception of the circumstances in which the work in which the foreigner claims his right is first published in China.

X. Under which country's law are issues relating to whether or not a work a foreigner publishes in a foreign country generates the copyright and what the contents and ownership of the copyright determined?

Answer: The law of the country in which a foreigner's work is published applies to the protection of the work. For that matter, where a foreigner claims the copyright in China concerning his/its work published in a foreign country, issues of whether or not the work generates copyright and what the contents and ownership of the copyright should be determined under the Chinese Copyright Law.

XI. Is it necessary to apply the conflict standards to the trial of civil cases in which a foreigner claims the patent right, trademark right or copyright in China?

Answer: The patent right or trademark right which a foreigner has acquired in the procedure under the Chinese law for his/its invention-creation and trademark is Chinese patent right or trademark right protected under the Chinese law. Likewise, the Chinese Copyright Law protects foreigners' works, regard their works as the Chinese works and accord them the copyright under the Chinese Copyright Law. Therefore, where a civil case in which a foreigner claims the Chinese patent right, trademark right or copyright involves only a patent right, trademark right or copyright, the Chinese relevant law should apply. There is no possibility to apply a foreign law; hence there is no need to apply the conflict standards.

However, it is necessary to make clear the Chinese attitude and position on the application of law in international protection of the intellectual property rights, and it should be explicated that the Chinese laws apply to the trial of these cases.

XII. Is it necessary to apply the conflict standards to the trial of civil cases in which a foreigner requests for cessation of execution of an unfair competition act?

Answer: China accords foreigners protection against unfair competition on the basis of its commitment under the international treaties; hence, the Chinese Unfair Competition Law applies where a foreigner requests for cessation of execution of an unfair competition act, and there is no need for the conflict standards to apply.

XIII. What are the legal bases on which foreigners bring civil IP lawsuits to the Chinese courts?

Answer: Where a foreigner brings a civil IP lawsuit to the Chinese court to protect his/its intellectual property right, examination should be conducted in two aspects. As for bringing the lawsuit, the examination of whether or not the lawsuit is acceptable by the court on the basis of the Chinese Civil Procedure Law; that of whether or not he/it can claim the right in China, whether he/it enjoys the right, what are the contents of the right, and whether or not the accused infringing act constitutes an infringement on the basis of the international treaty China has acceded to and the Chinese civil law and the relevant IP laws. The former concerns the procedure; the latter relates to issues to be addressed in the substantive trial.

XIV. Can the international treaties, such as the TRIPS Agreement, the Paris Convention and the Berne Convention, be referred to as the framework of reference in trying foreign-related civil IP cases?

Answer: Article 142, paragraph two of the General Principles of the Civil Law provides that "if any international treaty concluded or acceded to by the People's Republic of China contains provisions differing from those in the civil laws of the People's Republic of China, the provisions of the international treaty shall apply, unless the provisions are ones on which the People's Republic of China has announced reservations." Accordingly, in trying foreign-related civil IP cases, the international treaties, such as the Paris Convention and the Berne Convention, have the effect of direct application.

As for the WTO agreement including the TRIPS Agreement, China has been only committed to implementing them by way of formulating or revising the national laws, but does not invest in them the effect of direct application in China. Accordingly, these rules should not be directly referred to as the framework of reference for making judgements.

XV. Under what circumstances can judgements be made directly on the basis of international treaties?

Answer: Under Article 142, paragraph two of the General Principles of the Civil Law, when it is necessary to apply a law to the trial of a civil IP case, if the Chinese law and an international treaty contain the same provisions, only the provisions of the Chines law needs to apply. Where the Chinese law and the Paris Convention and the Berne Convention have set forth different provisions, the provisions of the Paris Convention and the Berne Convention can be directly referred to as the framework of reference for making judgements, unless the provisions ar eones on which the People's Republic of China has announced reservations.

XVI. Are both Berne Conventions and the Universal Copyright Convention simultaneously referred to where the countries to which the interested parties to a case belong are both member states thereof?

Answer: To harmonise the relations between the Berne Conventions and the Universal Copyright Convention, Article 17 of the Universal Copyright Convention provides that "this Convention shall not in any way affect the provisions of the Berne Convention for the Protection of Literary and Artistic Works." Besides, it is also pointed out in the Appendix Declaration Relating to Article 17 that "the Universal Copyright Convention shall not be applicable to the relationship among countries of the Berne Union in so far as it relates to the protection of works having as their country of origin, within the meaning of the Berne Convention, a country of the Berne Union." For that matter, the Berne Convention has the priority in countries that have acceded to the two conventions. It is only necessary to refer to the Berne Convention where the countries to which the interested parties to a case belong are both member states thereof.

XVII. Is IP protection accorded to nationals of countries that are not member states of the Paris Convention and the Berne Convention to which China has acceded, but of countries that are party to the TRIPS Agreement?

Answer: Article 1 (3) of the TRIPS Agreement provides that members of the World Trade Organisation shall be deemed all the members of the Paris Convention (1967), the Berne Convention (1971), the Rome Convention and the Treaty on Intellectual Property in Respect of Integrated Circuits. According to this provision, the TRIPS Agreement has extended the scope of application of the Paris Convention and the Berne Convention, and made the two Conventions binding on the non-contracting states thereof. Therefore, the nationals of non-member states of the international treaties, such as the Paris Convention and the Berne Convention, to which China has acceded, may claim their intellectual property rights in China under the Paris Convention and the Berne Convention.

XVIII. How to apply the law to cases of disputes arising from copyright infringement or unfair competition in which both interested parties are Chinese natural persons or legal entities or they both have their residence in China, or the infringing act takes place in a foreign country.

Answer: Under Article 146, paragraph one of the General Principles of the Civil Law, the law of the country of an interested party or of the place of his/its residence may apply when they are of the same nationality or have residence in the same country when damages are involved for injury caused by an infringing act. Accordingly, where in cases of disputes arising from copyright infringement or unfair competition in which both interested parties are Chinese natural persons or legal entities or they both have their residence in China, or the infringing act takes place in a foreign country, the Chinese laws, such as the Copyright Law the Unfair Competition Law, may apply.