White Paper on the Intellectual Property Rights Protection in China in 1998

1998 was a significant year in the history of the development of the intellectual property system in China.

In March of 1998, the Chinese Patent Office was renamed the State Intellectual Property Office of the People's Republic of China (hereafter, SIPO), a government agency directly under the leadership of the State Council. This was an important measure taken by the Chinese Government to strengthen the protection of the intellectual property rights, and indicates that China has entered a new era in the development of intellectual property.

Concurrent with the ongoing development of its reform and opening-up policy, China has made significant achievements in IPR protection in 1998. The legal framework for intellectual property - including patents, trademarks and copyright - was further implemented and perfected in China.  At the same time that the number of patent applications and trademark registrations increased, China has also made significant progress in cracking down on copyright infringement and piracy. Moreover, the contributions by Customs in the protection of IPR have, in turn, promoted the development of foreign trade. In addition, the public security authorities spared no effort to intensify the management of the audio-visual market and to severely crack down on criminal infringement and piracy activities.  As a result, much progress has been made in putting the audio-visual market in order.  In cultural affairs, the relevant authorities undertook strong measures against infringement, piracy, and the manufacture and sale of illegal publications.  New progress has also been made in the protection of new varieties of plants.  China has further strengthened exchanges and cooperative relationships with other countries and international organizations with regard to intellectual property.  As a whole, the awareness for the protection of intellectual property rights in Chinese society has risen significantly, and both the standards for, and the capacity of, protecting IPR by regions, departments and units throughout China were improved dramatically.

I. Establishment of the State Intellectual Property Office of the People's Republic of China

In March of 1998 when the government agencies under State Council were restructured, the Chinese Patent Office was renamed as the State Intellectual Property Office (SIPO), an agency directly under leadership of the State Council.  The State Intellectual Property Office has thus been authorized with the new task of comprehensively coordinating foreign-related IPR affairs and functions that were previously the responsibility of the Office of the State Council Intellectual Property Working Conference under the former State Commission of Science and Technology.  The receiving and examination of patent applications, reexamination, and invalidation are the responsibilities of the Patent Office of State Intellectual Property Office. As an administrative authority directly under the State Council with the responsibility of handling China's overall patent work and of comprehensively coordinating foreign-related IPR affairs,  SIPO's main responsibilities include the following:

* Taking the lead in drafting the revised Patent Law and associated regulations, and participating in the study of related IPR laws and regulations to formulate rules regarding the patent affairs;

* Formulating the principles and policies for foreign-related IPR affairs, and studying developing trends of intellectual property in foreign countries;

* Comprehensively coordinating foreign-related IPR affairs (including negotiations on intellectual property) and taking charge of international communication, cooperation, and exchanges in the field of patent work;

* Devising plans for nation-wide patent development and the expansion of the patent information network;

* Establishing the standards for the determination of both patent right and the infringement thereof, as well as designating and managing the authorities charged with patent determination, offering guidance to local authorities in the settlement of patent disputes, investigating and handling of passing-off of patent issues, taking charge in the review of patent agencies and in the qualification of personnel in foreign-related patent agencies;

* Promoting the dissemination and publicity of the Patent Law and related regulations, as well as formulating general plans for IPR education and training;

In addition to the foregoing, SIPO is also charged with shouldering other tasks as specified by the State Council.  SIPO is therefore an office with the responsibility of handling the overall patent work and of comprehensively coordinating the foreign-related IPR affairs.

The establishment of SIPO was an important measure taken by the Chinese Government to enhance the IPR protection and is a highly significant step in the long march of the development of the intellectual property in China.

II. A New Stage of Patent Work

1998 witnessed the continuous development of patent work in China.  In that one year, the State Intellectual Property Office received a total of 121,989 patent applications, an increase of 6.8% over 1997.  Of this number, 96,233 were domestic applications (which accounted for 78.9% of the total) and 25,756 were foreign applications (accounting for 21.1%). Of the total number of patent applications, 35,960 were applications for patents for inventions (accounting for 29.5%, an increase of 6.8% over 1997), 51,397 were for utility models (accounting for 42.1%, an increase of 2.5% over the previous year), and 34,632 were applications for industrial designs (accounting for 28.4%, an increase of 13.9% over 1997).  From April 1, 1985 to December 31, 1998, the total figure for the number of patent applications received in China now stands at 861,506.

Of the total number of domestic patent applications received in 1998, 64,355 were non-service applications (an increase of 7.2% over the same period of the previous year), while 31,878 were service inventions (accounting for 33.1% of the total). The percentage increase over 1997 of service invention applications for the three kinds of patents were 8.7% (invention patents), 4.8% (utility models), and 6.5% (industrial design patents). Among all domestic service invention applications in 1998, 49.9% were for patents for invention and utility models, and 50.1% were for industrial designs.

In 1998, a total of 27,179 applications were filed by industrial enterprises (representing an increase of 6.7% over the previous year), 2,861 were filed by research and development institutions (an increase of 1.1%) and 1,445 by colleges and universities (an increase of 11.8% over 1997).

The top ten provinces and municipalities in filing domestic patent applications in China in 1998 were Guangdong (13,473), Taiwan (7,727), Shandong (7,597), Zhejiang (7,074), Beijing (6,321), Jiangsu (5,829), Liaoning (5,643), Shanghai (3,419), Fujian (3,393), and Hebei (3,295).

By the end of December 31, 1998, the total number of foreign countries and territories filing patent applications in China was 95.  Of this total, 67 countries and territories filed patent applications in China in 1998, including six new countries, Maldives (2 applications), Lebanon, Latvia, Madagascar, St. Vincent and the Grenadines (1 application for each).  The top 10 countries or territories filing patent applications were Japan, United States, Germany, the Republic of Korea, France, the United Kingdom, Switzerland, the Netherlands, Sweden, and Italy.

In 1998, a total of 67,889 patents were approved, an increase of 33.1% over the previous year. 4,733 of these were patents for inventions, 33,902 were for utility models, and 29,254 were for industrial designs, marking an increase of 35.5%, 24.0%, and 45.1% respectively over 1997.

With regard to reexamination, SIPO received 322 requests in 1998 (an increase of 17, or 6%, over the previous year).  76 of these requests concerned parties who sought appeals over previous decisions on requests for revocation.  Of all requests for reexamination received in 1998, 240 related to applications of patents for invention (including appealing previous decisions on requests for revocation), accounting for 75% of the total.  In 1998, 258 cases of reexamination were resolved, of which 64 were settled through revocation of the original decisions on rejection of applications (24.8% of the total), marking a decrease from the previous year.

As compared with 1997, 636 requests for invalidation were received by the Patent Reexamination Board in 1998, an increase of 86.  Of the 398 cases that were resolved, 118 (or 29.6%) were declared invalid, 27 (or 6.8%) were declared partially invalid, and 80 were withdrawn after mediation between the interested parties, accounting for 20.1%, which was lower than that of the previous year.

According to the statistics from 54 patent administrative authorities located in China's provinces, municipalities and autonomous regions, 612 cases of patent disputes were received in 1998.  Of these, 465 (or 76%) were resolved.  Of all the cases received, 544 (or 89%) related to patent infringement disputes, 55 (or 9%) were concerned with patent rights and patent application rights, and 13 or 2% consisted of disputes concerning compensation for inventors. In the cases that were resolved, 116 (or 25%) were resolved through arbitration, 226 (or 49%) were closed through mediation, 103 (or 22%) were concluded by withdrawal of the initial request, and 18 (or 4%) were resolved through rejection of the appeal. Compared with 1997, 21 more dispute cases were received, of which 14 related to infringement and 7 were related to disputes among inventors with regard to compensation.  With regard to the cases of patent rights and patent application rights, the 1998 figure was the same as that of 1997.  In summary, the cases of patent disputes handled by patent administrative authorities were steadily increasing.

The local patent administrative authorities in China's provinces, municipalities and autonomous regions continued in their efforts to crack down on the passing-off of patents in the field of commodity circulation, and the enforcement methods included united action with other units as well as individual actions. In 1998, 2,086 cases of the passing-off of patents were investigated by the administrative authorities, or twice the number of 1997.  As a result of these activities on the part of the patent administrative authorities, their enforcement capacity was further improved, their popularity increased, the patent market was further purified, and, as the legal rights of the consumers were thus protected, the authorities were highly praised by the public.

After the formulation and implementation of the "Regulations on Patent Protection" in Guangdong, Sichuan and Hebei, similar regulations were adopted and implemented successively in Shandong, Hubei, Anhui and Liaoning. The implementation of those regulations helped intensify the enforcement means of the patent administrative authorities, institutionalized the methods in the handling of patent disputes, and increased the overall protection of patents, further advancing the development of Chinese patent system.

In 1998, the SIPO published the "Implementation Plans of Model Projects for the Industrialization of Patented Technologies", with 34 items designated as Model Projects.  At the same time, 70 enterprises were designated jointly by SIPO and State Commission for Economy and Trade as experimental units for patent work.

In order to keep the revision of the Patent Law in conformity with China's socialist market economy, the requirements of related international treaties, and the goals of further perfecting the Chinese patent system, various opinions and proposals were collected for the amendment of the patent law a few years ago and, after careful research and analysis, SIPO compiled the provisional revisions in the "Collection of Views on the Second Revision of the Chinese Patent Law", providing the framework for the second revision of the Patent Law.

III.  Comprehensive Developments in Trademark Work

1998 saw remarkable development in trademark work.  The Trademark Office received a total of 157,683 trademark applications for goods and service, an increase of 8,928 over that of 1997.  Of this total number, 129,394 (or 82.1%) were domestic applications, 18,252 (or 11.6%) were from abroad, and 10,037 (or 6.3%) were made in conjunction of the territorial extension of international trademark registration in accordance with "Madrid Agreement Concerning the International Registration of Marks."

In 1998, the Trademark Office examined 139,228 trademark applications.  Of this total figure, 25,685 related to changes of registered trademarks, 14,863 were transferred, 10,231 were renewed, 1,538 were canceled or revoked, and 11,800 related to the recordal of trademark licensing contracts. At the same time, 2,285 applications were received for trademark opposition, of which 164 related to service marks.

A total of 107,710 applications were approved for registration in 1998. By the end of 1998, the total number of valid registered trademarks in China had reached 968,827.

In 1998, the Trademark Review and Adjudication Board received, in total, 4,890 applications of different kinds for review and adjudication, of which 4,370 cases were concluded.

The Trademark Office and the Trademark Review and Adjudication Board arbitrated, in accordance with the law, a significant number of high-profile trademark cases.  These included opposition cases involving "CAMEL" of RJ Reynolds Tobacco Company, "HELLO MICKEY" of the Walt Disney Company, "PENTIUM" of the Intel Corp., and revocation cases concerning "Wu Song Da Hu," among others. It effectively safeguarded the legitimate rights and interests of the concerned parties, prevented unfair competition in the field of trademarks, and established a good international image for China vis-a-vis the protection of IPR.

1998 Statistics showed that 28,952 trademark infringement and counterfeiting cases were investigated and handled throughout the country, of which 14,216 were ordinary law-breaking cases and 14,736 were trademark infringement and counterfeiting cases.  Some major cases include the exclusive right of registered marks such as "MAOTAI" of Guizhou Maotai Spirit Enterprise, "PLEDGE" of US S. C. Johnson & Son Ltd., "PLAYBOY" of Hong Kong Yufa Group Ltd., and "LEONARDO" of China Huayuan Company Ltd. (Hong Kong), among others.  The total amount of fines that were levied amounted to 85,547,000 RMB, and more than 400 million pieces/sets of the infringing product were confiscated. 19,340 molds, plates and other equipment directly and exclusively used in the trademark infringement were seized, about 5 million RMB were ordered to be compensated for the damages suffered by the trademark owners, and 35 persons were handed over to the judicial organs for criminal prosecution. Meanwhile, the administration for industry and commerce at the national and local levels conscientiously implemented the Trademark Law, the Law of Administrative Procedures and other relevant laws and regulations in strictly carrying out the procedures for handling trademark cases, and thus made great strides in the improved handling of trademark cases.

The protection of well-known marks was also strengthened. Under the guidance of the Trademark Office, the local administrative authorities for industry and commerce handled, according to law, the infringement cases of well-known marks, such as Qingdao "Shuang Xing," Zhejiang "Zhang Xiaoquan," among others. The administrative authorities for industry and commerce also worked together with other related departments to provide effective protection for UL marks etc.

In 1998, the Trademark Office started to conduct research into the revision of the Trademark Law, establishing a working group specifically for that purpose. In December, the State Administration for Industry and Commerce (SAIC) and the World Intellectual Property Organization (WIPO) jointly organized the Trademark Legislation Seminar in Beijing, during which foreign experts from WIPO, the United States, and France introduced topics concerning international trademark legislation and trademark protection. On the basis of their research and on practical experience, the working group put forward the main themes, and defined the goals, of the Trademark Law revisions, laying a solid foundation for the smooth and expedient revision of the Trademark Law.

IV. Continuous Progress in Copyright Protection

The year of 1998 was a year when we witnessed continuous nationwide progress and achievements in copyright in the improvement and perfection of the laws and regulations regarding the copyright protection under the efforts by the copyright administration departments nationwide.  Such progress was well reflected in all aspects of copyright.

As a result of the unremitting efforts made by the National Copyright Administration of the People's Republic of China (NCAC) and related departments, the foundation of the revised Copyright Law has been well prepared.  On November 18th, 1998, members of the 7th Session of the Standing Committee of the State Council discussed and passed in principle the draft of the Revision of the Copyright Law.

In 1998, the local copyright administrative authorities received and handled a total of 1,208 cases, resolving 1,082 (or 89.6%) of them.  826 cases were concluded by the imposition of fines, 28 were transferred to judicial authorities, and 294 were handled through mediation. The top five regions that received and concluded the most cases were Hunan, Shandong, Shanghai, Sichuan and Beijing.

Also during 1998, the local copyright administrative authorities continued to combat piracy and confiscated more than 6.54 million pirated works of different kinds, of which 4.86 million were pirated books, 370,000 were pirated software and 680,000 consisted of pirated audio-visual products. The top five regions where most pirated works were seized were Hubei, Hunan, Shandong, Guangxi and Guangdong.  In order to fight against piracy activities more effectively, the National Anti-Piracy Alliance was established at the behest of the National Copyright Administration.

In 1998, Chinese users imported 5,469 types of copyrighted works and exported 588 types of copyrighted works.  The five regions most active in import were Beijing, Shaanxi, Shanghai, Jiangsu and Guangxi; while the most active regions in export were Beijing, Shandong, Jiangsu, Sichuan and Heilongjiang.

In order to promote further the trade in copyright, the local copyright administrative authorities undertook an immense amount of work.  In April, 1998, the NCAC sponsored the "98BIBF National Workshop on Copyright Licensing" in Beijing, in which representatives from more than 240 publishing houses and copyright agencies participated. The workshop laid a solid foundation for the high volume in copyright trade at the subsequent Beijing International Books Fair (BIBF).

With approval of the State Commission Office for Public Service Structure and Establishment Administration and the NCAC, the Copyright Protection Center of China (CPCC) was established in April, 1998, in order to provide better service for copyright owners.

In the field of copyright registration, a total of 3,265 works were registered by the local copyright bureaus and the CPCC in 1998, of which 1,776 were works of fine arts and photographic works, 414 were literary works. In the same year, 738 pieces of works of software were registered in the CPCC, bringing the total figure to 3,034.  The top five regions with the most registered works were Fujian, Guangdong, Jiangsu, Heilongjiang and Hunan.  With regard to collection and distribution of copyright remuneration, the CPCC collected a total amount of 1.8 million RMB under statutory licenses from the press, relevant newspapers and periodicals, and remitted 800,000 RMB to the copyright owners.

In 1998, the copyright administrative authorities at different levels in China continued to strengthen the dissemination of publicity surrounding the revision of the Copyright Law.  The "Photographic Exhibition on Copyright Protection in China" organized by NCAC during the 6th BIBF in August had a significant impact. The exhibition vividly illustrated to the Chinese and foreign audience the nature of copyright protection and copyright trade in China through display of numerous books and other media. Li Lanqing, Vice Premier of the State Council and Standing Member of Central Political Bureau of CPC, and Zou Jiahua, Cao Zhi, Peng Peiyun, Cheng Siwei, Xu Jialu, Hu Qili, Jing Shuping as well as other leaders of CPC and the State, visited the exhibition. Xinhua News Agency, People's Daily, CCTV and many other news agencies all covered the exhibition. In addition, the NCAC edited and published a bilingual brochure entitled "Copyright Protection in China".  Publicity campaigns were also organized to promote the dissemination of the knowledge of copyright in Sichuan, Guangxi, Beijing, Shanghai, Liaoning, Jiangsu, Shenzhen and Dalian.

In order to further improve the professional knowledge of copyright administration officials, the NCAC held the Training Workshop for Directors of Prefectural Copyright Bureaus in Southern China in Chengdu in 1998, following similar training workshop for directors of northern copyright bureaus the previous year. At present, all the directors of local copyright bureaus have received formal copyright training, helping to lay a strong foundation for the law-based administration of the local copyright authorities.

V. Remarkable Achievements in IPR Protection by the Customs Administration

In 1998, the Customs offices across the nation earnestly implemented the "Regulations for the Protection of Intellectual Property by Customs" and other relevant laws and regulations for the protection of intellectual property.  A number of cases were investigated and handled at China's borders, which effectively hindered the import and export of infringing products while maintaining the socialist legal system and the orderly operation of foreign trade.

Pursuant to "Regulations for the Protection of Intellectual Property by Customs", any party who requires protection of intellectual property should file a record at the General Customs Administration. Up to the present time, 1331 records have been kept at the General Customs Administration, of which 999 related to trademarks, 228 to patents and 104 to copyright.

In 1998, the customs further intensified its ties and collaborative activity with IPR rightholders and made remarkable achievements in fighting against infringement. In one year, the customs offices throughout the country investigated and handled 233 IPR infringement cases involving a value of 52,679,000 RMB. The confiscated products consisted mostly of textiles, clothing, sports shoes and other light industrial products, many of which were infringement of foreign rightholders, including NBA, Nike and Adidas.

In 1998, 20 cases relating to the import and export of the patent infringement were investigated and handled by the customs authorities throughout the country. During these investigations, the customs administrations worked together with the local patent administrative authorities in tracking down and handling these cases, effectively protecting the legal rights and interests of the patent rightholders.  For instance, when certain export goods were suspected of patent infringement by the customs in Shanghai and Urumqi, the local patent administrative authorities took an active attitude in helping determine whether they were infringed, thus enabling the customs authorities to confiscate the suspected goods without delay.

Furthermore, Chinese customs also took strong measures to crack down on pirated audio-visual products and illegal disc production lines. Since the Chinese government launched the campaign of Cracking Down on Pornographic and Illegal Publications," many underground illegal disc production lines were seized and the production of pirated discs was dealt a mortal blow.  Nevertheless, in order to seek high profits, lawless activists moved their illegal production of pirated discs out of Mainland China.  To counter the relentless piracy of audio-video products and to help coordinate the nationwide campaign against pornographic and illegal publications, the customs authorities made it their priority to severely crack down on piracy of audio-visual products.  Strict measures of control were adopted to monitor the import and export of CDs, VCDs, LDs and computer storage carriers.  This included checks on freight transportation, mailing delivery, and on individual passengers entering and leaving Mainland China, with a focus on suppressing the smuggling of such discs through the use of shipping containers, small boats, and ships shuttling between the Mainland, Hong Kong, and Macao.

Statistics in 1998 showed that over 20 million pirated discs were tracked down and seized, providing a setback to the smuggling of pirated discs. Customs agencies in Guangzhou, Gongbei, Shenzhen, Huangpu, Jiangmen and Shantou were among those units that made these outstanding achievements.

In addition, Chinese customs conducted constructive cooperative activities with domestic and foreign IPR rightholders and related organizations in such areas as information exchange and training. The General Customs authorities have established cooperative relationships with a number of international intellectual property-related organizations, including Business Software Association (BSA), Motion Picture Association (MPA) and the International Federation of Phonographic Industry (IFPI).

In March 1998, the General Customs Administration organized a training course in Shenzhen on the methods of identifying pirated discs and disc production lines, in which experts from IFPI and MPA were invited to lecture on the techniques for identifying pirated discs. This helped further to improve the capacity of customs officials to identify the infringing products.

In order to facilitate the investigation and handling of pirated Beanie Babies - a kind of stuffed animal toy - the customs in Shenzhen, Shanghai and other areas invited experts from the United States-based TY Co. Ltd. to give lectures to customs officials on how to differentiate between genuine and counterfeit products.  Such cooperation laid a favorable basis for successful tracking down and seizure of scores of infringed Beanie Babies products.

In order to strengthen and intensify enforcement, the customs authorities in Guangdong and Hong Kong made joint efforts to work together in protecting intellectual property.  They undertook ground-based and amphibious action simultaneously to strike against infringement and other illegal activities.  Once the goods found were determined to be illegal, the Guangdong and Hong Kong authorities would inform each other in a timely manner so that immediate actions could be to investigate and seize the infringing product. Up to the present, thirteen joint actions have been carried out to check for such cargo, during which a large number of cases involving the import and export of infringed products were inspected and seized, thus making great contributions to the protection of IPR.

Chinese customs will always continue to strictly implement the "Regulations for the Intellectual Property by Customs" and related laws and regulations in order to maintain their efforts at raising IPR protection to a new stage and to thus better serve the development of foreign trade.

VI.  Continuous Improvement for the Administration of the Audio-Visual Market

1998 also witnessed the further implementation and perfection of the rules and regulations for the administration of the audio-visual market. In accordance with the "Regulations on Administration of Audio-Visual Products" and related provisions, the Ministry of Culture promulgated its "Opinions on Application of Laws and Regulations in Suppressing Illegal Business of Audio-Visual Products" which specified the specific scope and amount of penalties for illegal activities in wholesale, retail, export, and profit-making projection of audio-visual products.  In a supplement to the above regulations, it is also stipulated that entities and individuals whose licenses were revoked or that have received administrative penalties twice within two years would not be allowed to engage in commercial audio-visual activity.  These regulations were instrumental in aiding the enforcement of the audio-visual market by the administrative authorities at all administrative levels, and has provided the said authorities with a strong mandate in combating illegal business activities.

Governments at various levels developed many effective measures for intensifying the management and control of audio-visual market. Beijing Municipality set up a team for comprehensive enforcement. Under a variety of jurisdictional mandates, they repeatedly launched raids against street peddlers selling illegal audio-visual products and finally eradicated this phenomenon.  Chongqing and Tianjin municipal governments took resolute measures to close down the great number of markets engaged in the distribution of illegal audio-visual products. In Guangdong province, 243 illegal businesses were shut down, and 21 million pieces of illegal audio-visual products were confiscated.  Meanwhile, the authorities combed 100,000 shops engaged in illegal audio-visual product business and 8,000 of these shops were investigated and handled.

In April of 1998, the Ministry of Culture took the initiative to bring to the public attention of national and local hot lines for public supervision over the cultural market. In Jiangsu, Shandong, Xinjiang, Ningxia, etc, the local administrative authorities for audio-visual products signed Letter of Guarantee with local businessmen.  In Beijing, a reward system was established, with the aim of awarding those who provided information with regard to sales of pornographic and illegal VCD discs, as well as those who did a superior job in investigating and handling such cases.  The system was extremely successful in its very first year when more than 400,000 RMB were granted.  The Guangdong provincial government, after its decision in 1996 to reward those who reported clues of illegal disc productions lines, formulated supplementary regulations with regard to rewarding informants who reported on activities of smuggling, transporting, storing and selling illegal audio-visual products. In Hubei province, a supervisor system was set up for monitoring the audio-visual market in not only Wuhan City, but in many other large and medium-sized cities as well.  In Yiwu City, Zhejiang province, a circular was issued to reward people who report the distribution and sales of illegal audio-visual products.  Upon verification of the information provided, the informant would receive a bonus according to the quantity of the illegal products seized, namely 50 cents for each product.  The same mechanism has been set up successively in Sichuan, Liaoning, Hebei, Hubei, Anhui, Yunnan, and in Changsha City, Hunan province, for rewarding and encouraging people to report clues of illegal activities.  The public has actively embraced this reward system.

To promote the awareness of law, to encourage the self-management of the entities engaged in business operations, and to facilitate the public supervision, the Ministry of Culture decided in October 1998 to introduce a public display system into the audio-visual market, under which a notice board must be hung at every location of audio-visual product business, explicitly indicating the name of administrative authorities concerned and its supervisory telephone number. The system was already put into effect in some areas, and will be implemented in the whole country in 1999.

The Ministry of Culture entitled the year 1998 the "National Cultural Market Year of Law", aiming at promoting legislation, law enforcement, increasing publicity surrounding the law vis-a-vis the cultural market. The audio-visual market has been a constant focus throughout the year. To tackle the problem of piracy and the smuggling of audio-visual products, which became increasingly severe, the Ministry of Culture required the various localities to carry out a centralized management of the audio-visual market from May to July. According to incomplete statistics, within only three months, 14,380,000 illegal audio-visual discs and/or cassettes were confiscated. Administrative penalties were imposed in 8,070 cases, and 831 cases were transferred to public security organs and judicial authorities for handling. 763 entities' licenses were revoked and 3,624 illegal dens were closed down or removed. At the same time, training sessions for management and administration personnel had an overall attendance of 130,000.

In order to support legitimate audio-visual products, the Ministry of Culture actively brought the chain operation mechanism into the audio-visual market and delegated to lower levels the power of examination, approval and management of general wholesale distributors and the wholesale fair. In addition, special attention and efforts were also devoted to rectifying and cleaning up the audio-visual markets in urban-rural junctions and the rural video projection market.

In the governmental restructuring in 1998, the State Council entrusted the Ministry of Culture with the function of administering the import of audio-visual products. With the effective handling of such work as well as with the implementation of "Administrative Measures on Import of Audio-Visual Products "in 1999, copyright of other countries and territories will be further effectively protected in China.

VII. Public Security Organs Made Great Progress in Fighting Against Infringement, Piracy and Other Illegal and Criminal Acts

According to incomplete statistics, in 1998 the public security organs at various levels across the nation investigated and handled 48,000 cases concerning the production, sales, and distribution of pornographic and pirated products, arresting 73,300 suspects, seizing 23 illegal disc production lines, and confiscating 9.1million pirated discs, 413,000 video tapes and 14 million pirated and pornographic books and journals.

In 1998, the Ministry of Public Security, in conjunction with the Ministry of Culture, jointly promulgated a circular calling for the public security organs nationwide to rectify and regulate the video projection market in urban-rural junctions, county cities and towns, and to track down and prosecute illegal acts of producing, selling and disseminating pirated, pornographic and illegal publications. The Chongqing municipal police investigated and closed down 186 video projection places that were operating without a license or which showed pornographic audio-visual products, handled 126 cases of selling and distributing pornographic audio-visual products, and captured 143 offenders. Since some offenders took advantage of rented private houses for selling and concealing pirated, pornographic and other illegal publications, the public security authorities in Beijing, Tianjin, Shandong, Hubei and other areas adopted a set of practical measures to strengthen the management of house renting. They educated house owners to abide by the law and punished them in case they offended the law and regulations. As a result, a group of house owners, who provided facilities to offenders for producing and selling pornographic and pirated products, were punished. To strike against " Roving Peddlers" selling illegal publications, and who are able to appear and disappear quickly, municipal police in Guangzhou utilized the "110 alarm" system, which was characterized with unified command, quick reaction and high flexibility, as a counter measure. Within the two-month intensified actions from October to December, 1,270 policemen were mobilized, 650 roving peddlers who sold illegal books and journals were arrested, and 160,000 illegal books, journals and discs were confiscated. The public security organs in Beijing and Tianjin also launched a concerted attack on Beijing's Zhongguancun Electronic Street and Tianjing Xinyang Market, destroying a number of dens where pornographic and pirated products were produced and sold, and capturing a number of offenders. In 1998, the public security organs in Guangdong, Fujian, Hubei, Sichuan, Anhui, and other places continued to establish and further perfect the working mechanisms that combine the case report reward system with secret investigative practice. These organs made maximum efforts to seek clues for unearthing illegal disc production lines and to severely crack down on illegal production of discs. In addition, the public security organs throughout the country launched a stern crackdown against the newly emerging illegal activity of producing pornographic and pirated discs through computerized CD-writing technologies. In May, 1998, Shanghai police captured a gang of eight criminal suspects who used computerized CD-writing machine to reproduce pornographic discs. The statistics show that the public security organs had seized, since 1995, 73 illegal disc production lines, striking relentless blows at offenders and criminals.

In 1998, based upon a large-scale investigation into the situation of the printing business, the public security organs across the nation tightened the management of commercial printing operations by rectifying the businesses and cracking down on illegal printing activities in areas where such phenomenon was rampant. Shandong, Jiangsu, Zhejiang, Chongqing, Fujian, Hebei, Hunan, Jiangxi, Shanxi, Guangdong, Sichuan, Hubei and other provinces and cities took strong measures, such as the reexamination and the granting of licenses, with the focus on rectifying these businesses and to improve the management of printing business. After the Ministry of Public Security, in conjunction with the State Press and Publications Administration and State Administration for Industry and Commerce, jointly promulgated a "Circular on Rectifying the Printing Business", the public security organs in Beijing, Liaoning, Zhejiang, Anhui, Fujian, Jiangsu, Shandong and other places quickly reacted by adopting measures such as the administration responsibility system for local police stations and the internal security responsibility system for printing houses, and the effective control over these printing houses was consolidated.

In 1998, the public security organs at various levels made increasingly great efforts to track down cases of producing and selling pornographic and pirated products, and thus broke a successive a number of important and influential cases that risked to jeopardize social stability. From 6 to 11 June, the public security organs in Shenzhen, after a detailed deployment, launched an attack and destroyed eight warehouses for concealing pirated discs, confiscated 610,000 discs of over 160 types and arrested 53 offenders and criminals. A powerful and well-organized group that was engaged in wholesales operations and distributing huge quantities of pirated discs from Shenzhen to more than 20 large and middle cities in inland China was smashed. On 16 September, the public security organ in Yangquan, in Shanxi province, handled a case concerning the sale of pirated teaching materials for students through the mailing service of the post office. This was the first time such a case was handled in China. In this case, 8,100 pirated teaching materials were confiscated. It was also learned that the mail service company subordinate to the Yangquan Municipal Postal Bureau bore the responsibility for distributing the pirated items and had earned an illegal profit of 143,000 RMB. Following a lead, the Yangquan police, in cooperation with Hebei police, seized two gangs of offenders who were engaged in the printing of these pirated items. In 1998, the Ministry of Public Security coordinated the handling of more than 20 major cases of producing and selling pornographic and pirated products. All these cases were concluded.                                  

VIII. New Progress in Protecting New Varieties of Plants

On March 20, 1997, the State Council promulgated the "Regulations on the Protection of the New Varieties of Plants". To guarantee the smooth implementation of the Regulation, China successively formulated the Implementing Rules for the Regulation, the Catalogue of First Batch of New Varieties of Plants under Protection, the Examination Guidelines for Variety Right and a series of regulatory documents for applicants. At present, China is speeding up the formulation of the Test Guidelines for Genus (Species) of Plants. In addition, China strengthened publicity of the protection of new varieties of plants by disseminating the knowledge through various means, with the result that the public consciousness of the protection of new varieties of plants has been deepened.

In order to speed up the process of the internationalization of intellectual property in China and promote cooperation and exchanges between the Chinese Government and the International Union of the Protection of New Varieties of Plants (UPOV) and its members, China accession to the International Convention for the Protection of New Varieties of Plants (version in 1978) was approved at the Fourth Plenary Conference of the Ninth Standing Committee of the National People's Congress in August 1998.

IX. International Exchanges and Cooperation Further Strengthened

On June 10, 1998, the United States Government delegation headed by Joseph Papovich, Assistant United States Trade Representative (USTR), and the Chinese delegation led by Gao Lulin, former Commissioner of SIPO of People's Republic of China, held Sino-US bilateral conference on intellectual property. The U. S. delegation consisted of the State Department, the USTR, the United States Patent and Trademark Office (USPTO), the Library of the Congress, and US Customs.  The Chinese delegation included the State Intellectual Property Office, the Trademark Office of the State Administrations for Industry and Commerce, the National Copyright Administration, the State Drug Administration and the General Administration of Customs.

On September 24, 1998, when French Premier Lionel Jospin visited China, France and China signed the Cooperation Agreement on Intellectual Property Between the Government of the People's Republic of China and the French Government. Jiang Ying, Commissioner of SIPO, and H. E. Pierre Morel, the French Ambassador, as the representatives of the two governments, signed the Agreement.

In March and September 1998, former Commissioner Gao Lulin of SIPO and Commissioner Jiang Ying successively led the Chinese Government delegations to attend the 32nd and 33rd Series of Meetings of the Assemblies of the Member States of WIPO. The State Intellectual Property Office also dispatched representatives to be represented at the first session of the WIPO Standing Committee of Patent Law (SCP) and the first session of the WIPO Standing Committee of Information Technologies (SCIT).

In April 1998, SIPO and WIPO together held the 21st Century PCT System International Symposium in Beijing. In October, China Intellectual Property Society and American Intellectual Property Law Association organized the International Symposium on IPR protection System for the 21st Century in Beijing.

In 1998, the State Intellectual Property Office respectively conducted cooperation in the field of intellectual property with Japan, the Republic of Korea, the United States, the United Kingdom, Germany, Austria, France, Sweden, Bulgaria, Yugoslavia, and Russia,etc.

In 1998, the Trademark Office received 40 foreign visiting delegations or groups, sent 24 delegations or groups abroad, and attended the 32nd and 33rd Thirty-Third Series of Meetings of the Assemblies of the Member States of WIPO, the 18th session of the Preparatory Working Group of the Nice Union, the first session of SCIT, and the first session of the Standing Committee on the Law of Trademarks, Industrial Designs and Geographic Indications.  The Trademark Office also visited its counterparts of United States, Japan, Hong Kong, Macao and five other countries and territories and participated in 10 training seminars held in Singapore, Japan, Canada, Sri Lanka, Iran, Switzerland, Belgium and the Netherlands, etc. The Trademark Office further strengthened its ties with WIPO, enhanced exchanges and cooperation with other countries and territories in the field of trademark and trademark laws, and raised China's international standing in the field of trademarks.

Yu Youxian, Director-General of the National Copyright Administration of the People's Republic of China, led a Chinese copyright delegation to visit WIPO headquarters in 1998. The National Copyright Administration, together with WIPO, organized the WIPO/NCAC Regional Workshop for Asia and Pacific on Copyright and WIPO Internet Treaties and the WIPO Regional Consultation Meeting for Asia and the Pacific Concerning a Protocol on Audio-Visual Performances and Related Issues.  Hong Kong Special Administrative Region, for the first time in its history, co-sponsored an International Seminar on Intellectual Property with WIPO in Hong Kong.
 
In 1998, China dispatched a total of three delegations to be represented at the "Symposium on Plant Patent and 98 Seed Trade in Asia and Pacific Region" and "Seminar on Protection of New Varieties of Plants in Asia and Pacific Region" and to participate in the "Training Course on the Protection of International New Varieties of Plants". Through those activities, China enhanced its exchanges and cooperation with other countries in the field of protecting new varieties of plants and strengthened the ties between Chinese examination authorities of new varieties of plants and the International Union for the Protection of New Varieties of Plants (UPOV).