CCTV:
At the Boao Forum for Asia annual conference recently concluded in China, President Xi Jinping emphasized that enhancing the protection of intellectual property rights is one of the important measures for further opening up. I've got a question for Mr. Shen. What concrete measures will be taken to enhance the protection of intellectual property rights? Thank you.
Shen Changyu:
Thank you for your question. As you mentioned just now, at the Boao Forum for Asia 2018, with a straightforward stance, General Secretary Xi Jinping reinforced the protection of intellectual property as one of the four major measures to expand openness, once again conveying to the world the firm position of the Chinese government on strictly protecting intellectual property rights by law. His speech has won wide acclaim from the international community. The State Intellectual Property Office (SIPO) has since studied and deployed the work of implementation. Focusing on realizing the spirit of General Secretary Xi's important instructions, we will coordinate the related parties to improve the protection of intellectual property rights, speed up the formation of a protection system covering aspects such as authorization and confirmation of rights, law enforcement, judicial protection, arbitration mediation, and self-discipline, so as to provide a more powerful guarantee of the rule of law for innovators and market players.
We will further strengthen the protection of intellectual property rights in the following four aspects.
The first is to take the opportunity to re-structure the SIPO to actively guide the comprehensive law enforcement of patents and trademarks and to better combat all types of infringement.
Second, we will take the opportunity to revise the Patent Law of the People's Republic of China as a way to expedite the establishment of a punitive compensation system for infringement, so as to raise the cost for IP infringement substantially and fully unlock the deterring effect of the relevant laws.
The third is to regard the construction of intellectual property protection centers as the starting point, and to reduce the time required for authorization, confirmation and protection of rights by establishing more convenient, efficient, and low-cost channels for rights protection. At present, we have established 19 such centers throughout the country. This year we will further expand the scale and improve the layout of these centers. The centers work quite well though they have been established for only a short time; this year we will further optimize the layout.
Fourth, we will take the 40th anniversary of reform and opening up as an opportunity to deepen international cooperation on intellectual property rights, to promote the building of more open, inclusive, balanced, and effective international rules regarding intellectual property rights so that China's intellectual property rights can also be well protected in foreign countries. We hope these measures can create a favorable international environment for Chinese companies "going global."
Thank you.
China Daily:
I would like to raise a question to Yu. Tencent Music and Netease Cloud Music have reached consensus on internet music copyright cooperation, authorizing music to each other. This has caught widespread attention. How will the people benefit from this cooperation? And what concrete measures have the National Copyright Administration taken to promote the development of the internet music industry ?
Yu Cike:
I appreciate your care about the copyright work. Music is one of the main media spread via the internet. The internet music industry has many customers and major influence. The two companies' cooperation is good news to music fans, who can enjoy more music on the internet. This is also good for the authorization and spread of the internet music resources. Meanwhile, it will also play a positive role in maintaining good protection for network music and building a good ecology for internet music.
In 2015, the National Copyright Administration organized a special campaign on internet music copyright protection. Over the past few years, piracy and copyright infringement have been effectively checked, and the circumstances of network music copyright protection have improved markedly. On this basis, we are thinking about the way to promote a wider spread of works of music while strengthening the internet music copyright protection. This is a very important issue concerning whether the internet music industry can develop faster.
To do so, the National Copyright Administration has strengthened its supervision and coordination, and has taken some additional measures. First, the administration communicated with the main internet music service providers and the music companies, urging them to promote internet music authorization and wide distribution of music, avoiding exclusive authorization. They are encouraged to explore internet music authorization and operation models that are in line with market laws and internet conventions.
Second, the administration has further strengthened its supervision of the copyright protection of internet music, demanding the music service providers and companies reinforce copyright protection of internet music resources, and actively form a good internet music copyright ecology. Third, relevant internet music service providers are asked to settle their disputes over copyright properly, and actively engage in cooperation in regards to internet music copyright.
The two companies' cooperation is the fruit of the administration's efforts to protect internet music copyrights, and also of the administration's efforts to promote the distribution of internet music. It is also an action of the internet music service providers so as to offer better services to internet users, and an active measure to maintain the healthy development of the internet music industry. There have been a few small setbacks and issues in the cooperation, but this will not influence the overall trend and direction of development.
The administration will continue to urge the relevant parties to abide by the laws and rules on copyright protection as well as market rules and international conventions, to build a developed, orderly, regulated and sustainable models for internet music authorization and operation through quality services, fair competition and differentiated development, so as to promote the prosperous and healthy development of the internet music industry. Thank you.
People's Daily overseas edition:
The State Intellectual Property Office was restructured as part of China's deepening reform of Party and state institutions. Mr. Shen, could you inform us about the functions of the new agency and the progress of the restructuring? Thank you.
Shen Changyu:
In order to solve long-standing problems caused by the separated administration and overlapping enforcement of patents, trademarks and geographical indications, as well as improve the management mechanisms of IPRs, the CPC Central Committee decided to regroup the State Intellectual Property Office as part of the deepening reform of Party and state institutions.
The new agency has the following functions:
1.Promoting the implementation of the national intellectual property strategy, especially strengthening the creation, protection, and application of intellectual property.
2.Protecting intellectual property, facilitating the construction of an IPR protection system and offering guidance on the administrative law enforcement of patents and trademarks.
3.Conducting registration and administrative adjudication of trademarks, patents and geographical indications.
4.Coordinating foreign-related IP work and conducting foreign-related negotiations in the IP sector according to different categories.
We are making planned, progressive and disciplined efforts to advance the restructuring of the agency in accordance with the requirements of the CPC Central Committee.
Thank you.
Reuters:
We know that IPR is a sensitive topic when it comes to foreign companies in China. Some foreign companies complain that China does not provide enough protection of IPR or that they are forced to do some related IPR transfer in order to do business in China. Do you think these complaints are reasonable? With the current trade dispute between China and the U.S., IPR is also one of the important topics of discussion. In your view, will China respond to these appeals by the U.S. through relevant negotiations between China and the U.S.? And will China make adjustments to its IPR policies ?
Shen Changyu:
Thanks for the question, which is indeed a very important issue.
Over recent years, China has continued to strengthen its protection of intellectual property rights. Equal importance has been given to domestic and foreign enterprises. These efforts have won high praise from the international community. Last year, the Anti-Unfair Competition Law was amended, with sections on protecting business secrets further improved. Influential figures and sources in the U.S. intellectual property right industry have agreed that China's protection of intellectual property rights is now among the top-ranked of all middle-income countries. More and more foreign patent-holding entities chose to sue non-Chinese companies in China, because they believe they can receive equal treatment here.
Additionally, China has continued to pay royalties in accordance with international trade rules. Last year, the royalties paid by Chinese entities to overseas entities reached US$28.6 billion, more than US$20 billion higher than the received. In particular, the royalties paid to U.S. entities increased 14 percent year-over-year. This shows that China has remained a strong defender, important participant and active builder of international trade rules. In recent years, tremendous progress has been made in the intellectual property rights industry, especially in the protection of IPR.
I want to stress an issue here. In the future, China will further strengthen its efforts to protect intellectual property rights. This is not only because of our need to fulfill international responsibilities, but also because of our need to promote self-development. President Xi Jinping has pointed out that China needs to strengthen the protection of intellectual property rights, as it is a requirement of both foreign enterprises and Chinese companies. As a next step, we will follow President Xi's instruction and the government work report to further improve the protection of intellectual property rights, foster a better environment for business and innovation, attract more foreign enterprises to invest in China, and open wider to the outside world.
The Sino-U.S. trade issue you just mentioned concerns intellectual property rights. To be frank, from our perspective, the so-called Section 301 investigation against China failed to see or ignored China's efforts in this field. Many influential figures in the U.S. intellectual property right industry have agreed that China has made remarkable achievements in this regard. I think our efforts have been recognized internationally. Thank you.
Economic Daily:
I have two questions for Mr. Cui. First, what measures has the Trademark Bureau taken in respect to deepening trademark registration facilitation reform, strengthening the protection of the exclusive use of trademark and cracking down on trademark infringements? Second, this year's government work report has put forward a requirement to substantially shorten the trademark registration cycle; what measures will be taken next to implement this policy, curb malicious trademark registration and strengthen the protection of the exclusive use of trademark? Thank you.
Cui Shoudong:
The first question is about our work on facilitating and supervising trademark registration in recent years. Under trademark law, our bureau's functions include trademark registration and management. We have done a lot of work, especially since 2016, on registration facilitation. Therefore, when we summarized our work from last year, we said 2017 had witnessed our greatest efforts on reform and most effective achievements. We have introduced several documents, including those concerning the deepening reform of trademark registration facilitation, improving the efficiency of trademark examination and implementing trademark brand strategies.
I think our efforts have generated obvious effects after one year's work.
First, we have broadened the application channels, shortened the investigation period, and optimized the investigation procedures. Currently, there are 123 counters nationwide accepting trademark applications. Almost all major cities, cities at the prefectural level and above, and county-level cities have such offices. This was a reform in 2016. Since the pilot reforms in Ya'an and Taizhou cities in May 2016, we have established 123 such counters, and 58 counters for registration of pledge. Previously, only the trademark hall accepted trademark applications. Now there are more channels, among which the counter is an important one.
Second, we have founded trademark investigation cooperation centers outside Beijing. There are three such centers in Shanghai, Chongqing and Guangzhou. The Guangzhou center was founded prior to the ones in Shanghai and Chongqing, which has made trademark registration more convenient. We plan to found trademark investigation centers in Henan and Shandong provinces. This is an institutional reform. Furthermore, we have made the internet an important application channel. All applicants have been able to submit their trademark applications on the internet since March 10, 2017, and 23 kinds of businesses related to trademark can be directly submitted and processed via the internet. In 2017, 4.897 million trademark applications were made on the internet, 86 percent of the total, and 23 percentage points higher than five years ago.
Third, the procedures have been optimized. The investigation period of trademark has shortened from nine months in 2014, which is stipulated by the Trademark Law, to eight months due to our efforts last year, and we plan to further shorten it to six months. And it takes two months now to issue the notice of acceptance of trademark instead of six months. Over the past two years, we have unveiled important reform measures almost every one to two months. The procedures, like the international registration and geographical indication applications, have been greatly simplified. We have issued e-notices to 500 agencies and counters. This is an important reform. We issue 19,600 such e-notices every day on average, and the delivery efficiency is much higher than before.
There is another important reform. By implementing the State Council's reform to streamline administration, delegate powers and improve regulation and services, we have reduced trademark application fees, and helped ease the applicants' financial burdens. From April 1, 2017, the trademark application fee was reduced from 600 yuan to 300 yuan, and the other fees have also been markedly lower. We have done a lot of work to facilitate trademark registration.
In an effort to better regulate the registration of trademark, we take measures to prevent malicious registering, as well as to further facilitate the registration of trademark, which are two major parts included in the protection of intellectual property rights. During the investigation process, we mainly focus on taking strict measures to fight against trademark registration with outright malicious intentions, and those which do not align with the principles of honesty and credibility. By taking all these measures, we will crack down hard on infringement and counterfeiting. In 2017, we investigated and handled 30,000 violations of laws or regulations, with a total value of 365 million yuan. Great achievements have been made in registration and management. Firstly, we strengthened the management of major cases, accumulating the efforts to fight against trademark infringement. Secondly, we launched projects targeted at the sources of trademark infringement. Thirdly, we made more efforts to protect foreign investment companies. We also stepped up efforts to protect the legal rights of Chinese companies overseas. Fourthly, we made innovations in the method of regulation. With the help of the National Enterprise Credit Information Publicity System, we promoted our classified regulation on risk management.
Starting from April 20, the Trademark Office has been officially included in the State Intellectual Property Office. In past years, the Trademark Office stuck to a problem-oriented direction. Development will not be realized without the reform. In the future, we will deepen the reform to better facilitate trademark registration.
Recently we issued a three-year crucial plan for the reform of trademark registration facilitation. We have reported it to the State Council and also publicly published this plan. The key point of the plan is that the trademark review period has been shortened from seven months last year to six months this year; it will be shortened to five months next year and to four months by the year 2020. How do we see the four-month period? It will be the fastest among the OECD member countries at present and the fastest among countries that implement the relative grounds examination system. This is because China's trademarks application volume is so large; for example, there were 1.52 million entries in the first quarter of this year alone, an increase of more than 80 percent year-over-year. In some developed countries, their annual application volume is only 500,000 to 600,000, while we can reach more than 600,000 within a month. Some other procedures, including trademark changes, transfers, renewals and revocations, need to be simplified. We must reduce fees and charges, and greatly ease the process for applicants. You can check our three-year plan for details, which has already been made public.
With regard to supervision, through this institutional reform, under the direct leadership of the State Intellectual Property Office, we will take more stringent measures to combat infringement of intellectual property rights and counterfeits, in order to protect intellectual property rights.
Lianhe Zaobao:
I have two questions. First, the report on intellectual property rights protection in China 2017 mentioned that there was a decline in the number of intellectual property rights infringement crimes punished in China. Cases dealing with the sale and counterfeiting of registered trademarks and with the illegal manufacturing of trademarks saw year-over-year declines. It may be interpreted as a sign that the intensity of law enforcement was dwindled; what do you think about this? Second, I want to continue the question from Reuters. We have seen efforts from China toward the protection of intellectual property rights. However, by outside impressions, much remains to be done. For instance, a report from the China Chamber of Commerce in the United States mentioned that 94 percent of U.S. enterprises think their intellectual property rights have not been protected in China. How will China change this impression? You have said that Chinese enterprises also have this need, so will China enhance protections in order to serve Chinese enterprises or overseas ones ?
Shen Changyu:
Thank you for your two questions. Just now you found in the white paper that there was a year-over-year decline in the number of cases of dealing with intellectual property rights infringement crimes in China. This reflects, from one angle, that the protection of intellectual property rights has been enhanced in China. This decline gives a concrete expression. In recent years, China has dealt severely with all cases of intellectual property rights infringement, the environment has been improved, efforts have intensified and cases have seen a decline.
Second, you mentioned intellectual property rights protection for Chinese enterprises or overseas ones. There are four key qualities of intellectual property rights protection: it should provide strict, extensive, rapid and equal protection. This means we will follow a strict system, set up a coordinated blueprint and a rapid, easy, effective and low-cost rights-defending channel especially for small, micro- and medium-sized enterprises, and treat intellectual property rights of domestic and overseas enterprises equally. These are the basic principles. We will treat private and state-owned enterprises the same, large, small and micro-enterprises the same, units and individuals the same. Therefore, intellectual property rights protection for domestic enterprises is no different than for overseas ones. Thank you.
Nihon Keizai Shimbun:
The draft foreign investment law has been included in the State Council's legislative agenda for the year 2018. Some experts pointed out that the law contains the Regulations on Technology Import and Export Administration, and therefore, the regulations are likely to be abolished. Is this news true? Thank you.
Shen Changyu:
Thank you for your question. I think the question you raised is very important and meaningful. I suggest you contact corresponding departments to find out relevant information about the situation. At the same time, I will further size up the situation and provide feedback on the information in a timely manner. Thank you.
Reuters Video:
Thank you very much for your detailed response to my colleague's question earlier about intellectual property concerns among foreign companies. Could you put it very simply: Do you recognize any of their concerns?
Shen Changyu:
Thank you for your question. China began to establish and develop its intellectual property rights protection system during the implementation of the reform and opening up policies. In no more than four decades, much progress has been achieved in this regard. Intellectual property rights infringement can be seen worldwide, with various forms and levels of severity at different stages of evolution. However, the Chinese government has demonstrated strong resolve and taken effective measures to protect intellectual property in accordance with the law in past years. The improvement in China's environment for intellectual property protection has been widely acknowledged by the international community. In my prior report, I introduced the measures China has taken to crack down on infringement activities, including those measures in administrative law enforcement and judicial protection. I'm convinced that China's environment for intellectual property protection will become increasingly favorable in the future. Thank you.
Xi Yanchun:
Every year in late April, Mr. Shen and other officials from the Intellectual Property Office will elaborate on the progress China has made in intellectual property protection, as well as China's determination and future plans related to intellectual property protection. We appreciate your continued attention to China's protection of intellectual property. Thanks to our spokesman, and thank you all. That's all for today's press conference.