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The ability to provide adequate after-sales service is an important selling point and can distinguish a company from its competitors. Wholly owned service companies and foreign invested enterprises are now able to provide sales service and after-sales customer support in China. Heightened consumer awareness has given U.S. companies with strong international brands an advantage in the Chinese market, as American products and services are generally considered to have superior sales and customer support standards. This, of course, requires a certain degree of localization, and a commitment to training the local sales and service force. Protecting Your Intellectual Property Return to top As China liberalizes its trade regime and continues to further open its markets under its World Trade Organization (WTO) commitments, new products and industries are increasingly present. Additionally, an increasingly large number of Chinese individuals and small companies are involved in manufacturing and international trade. China‘s internet penetration has been rapid, with many companies scouring the internet for market opportunities. While this has many positive effects for the Chinese economy, one ancillary effect of the growing trade and market liberalization has been the simultaneous growth in infringement of intellectual property rights (IPR), including the export of products that violate U.S. rights in the United States and other overseas markets. U.S. companies, whether or not they are active in China, can no longer afford to decline or defer taking steps to protect their IP rights in China. Intellectual property rights are territorial. U.S. companies must secure relevant rights in China in a timely fashion in order to be protected under Chinese law. Separately, U.S. rights holders may need to obtain different types of rights, and seek different types of remedies under China‘s legal regime, compared to the United States. China’s IPR Commitments As part of its Protocol on Accession to the WTO, China committed to full compliance with the WTO‘s Agreement on Trade-Related Aspects of Intellectual Property Rights (the ―TRIPs Agreement‖ or ―TRIPs‖), as well as other TRIPs-related commitments. Although some progress has been made, the Chinese Government has yet to implement effective enforcement measures to deter widespread infringement of intellectual property rights. Currently, some of these laws are being revised or under consideration for amendment. In late 2008, China announced a new National IPR Strategy. In October 2010, Premier Wen Jiabao and the State Council (China‘s cabinet) announced a new "Special IPR Campaign‖ of enhanced enforcement of intellectual property rights. In November 2011, during a bilateral meeting of the Sino-U.S. Joint Commission on Commerce and Trade (JCCT), Vice Premier Wang Qishan announced that China will establish a permanent office to continue the Special Campaign‘s enforcement efforts. Rights holders should ensure that the steps they take are based on the most recent legal developments. Apart from China‘s WTO commitments, China has signed a number of international and bilateral agreements regarding IPR. China is a member of the World Intellectual Property Organization (WIPO) Convention, the Paris Convention for the Protection of Industrial Property, the Berne Convention for the Protection of Literary and Artistic Works, the Madrid System for the International Registration of Marks, otherwise known as the ―Madrid Protocol,‖ the Universal Copyright Convention, the Geneva Phonograms Convention, and the Patent Cooperation Treaty. 15
During 2002, the WIPO Copyright Treaty and WIPO Performance and Phonograms Treaty (the ―Internet Treaties‖) came into effect worldwide. The treaties help define global standards needed to keep pace with distribution of copyright over global networks. In March 2007, China acceded to the two WIPO Internet Treaties. As of June 30, 2010, the China Internet Network Information Center (CNNIC) reported an estimated 420 million internet users. http://www.cnnic.cn/en/index/0O/index.htm. It is critical that the Chinese Government aggressively enforce against copyright infringement occurring over the internet. Enforcement against various types of cybercrimes, such as internet piracy and sales of counterfeit and pirated goods over the internet, however, tends to be weak. The two countries have cooperative programs concerning technology and criminal justice, and continue to discuss IPR issues on a bilateral as well as multilateral basis. From 2007 until recently, though, U.S. and Chinese interests diverged significantly over China‘s continued unsatisfactory record of enforcing and protecting IPR. On April 9, 2007, the United States Trade Representative (USTR) filed two cases against China before the WTO, alleging: (1) weaknesses in China‘s legal regime for protection and enforcement of copyrights and trademarks; and (2) market-access restrictions in China on products of copyright-intensive industries. The Chinese Government reacted strongly to the U.S. action, severely curtailing IPR cooperation outside of Geneva, taking IPR discussions out of the Joint Commission on Commerce and Trade (JCCT) dialogue, and cancelling many cooperative IPR programs, at considerable cost to the United States. In January 2009, the WTO found China in violation of the U.S. copyright claim, and in partial violation of the trademark claim. On the copyright issue, the panel concluded that China did not provide full protection for foreign owners as it did for domestic rights holders. This disparate treatment violated the TRIPs Agreement which requires members to have laws that prevent and deter infringement for all rights holders. The trademark claim concerned the practice of China Customs‘ removing the trademark from counterfeit goods, such as handbags and apparel, then opting for one of the following disposal actions, none of which was acceptable to rights holders: (1) donating the goods to charities; (2) re-selling the goods with the profits given to charities; or (3) simply releasing the goods back to the vendor. The WTO held China in partial violation of TRIPs Agreement, in that simple removal of an unlawfully affixed trademark is insufficient to allow release of the goods back into the commercial stream. However, the panel did not find China to have violated its authority of disposing infringing goods as it deemed appropriate. On a third claim concerning whether China had sufficient enforcement measures to deter infringement, the WTO did not issue a decision, stating that it lacked enough evidence to determine whether China had criminal procedures and penalties in place to address trademark infringement and copyright piracy on a commercial scale. IPR Climate For 2012, industry associations representing copyright and consumer-goods industries report high levels of piracy and counterfeiting of all types of copyrighted products. Additionally, U.S. copyright entities report difficulty in entering the Chinese market due to 16
Page 1 and 2: Doing Business in China 2012 Countr
Page 3 and 4: Despite these remarkable changes, C
Page 5 and 6: Chapter 2: Political and Economic E
Page 7 and 8: level agencies the authority to rev
Page 9 and 10: personnel, appointing a Foreign Ent
Page 11 and 12: Technology transfer is another init
Page 13 and 14: etween their Chinese agents or dist
Page 15: In 2010, approximately 5,040 trade
Page 19 and 20: administrative or judicial organs w
Page 21 and 22: China also has specialized IPR trib
Page 23 and 24: ights holders. In addition to amend
Page 25 and 26: goods and services of one provider
Page 27 and 28: urdensome. When U.S. rights holders
Page 29 and 30: It is also recommended that small a
Page 31 and 32: Chinese law requires representative
Page 33 and 34: American Chamber of Commerce 2011 B
Page 35 and 36: Best Prospects / Services Return to
Page 37 and 38: Chengdu Lily Lin, Commercial Specia
Page 39 and 40: elieve congestion, China opened 19
Page 41 and 42: China Southern Airlines, www.cs-air
Page 43 and 44: 13. Electromechanical systems 14. S
Page 45 and 46: eached a total size of RMB 100 bill
Page 47 and 48: Location: Shanghai-Intex, No. 88 Lo
Page 49 and 50: Venue: China International Exhibiti
Page 51 and 52: percent from 2009. According to sta
Page 53 and 54: Pleasure boats are one of the best
Page 55 and 56: China is #1 in Spending per Travele
Page 57 and 58: Year Ministry of Commerce (MOFCOM)
Page 59 and 60: The demand for modern environmental
Page 61 and 62: U.S. Commercial Service Contact Inf
Page 63 and 64: investment in wafer and LED fabs in
Page 65 and 66: According to the China Greentech In
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The 11th China International Heatin
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Chengdu Office: Tel: (86 28) 8558-3
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Return to table of contents Chapter
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2008, introduced an overall 25 perc
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Classification Number of the item a
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3. Importing Commercial Samples int
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(RMB). Food items containing certai
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proposed technical regulations that
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Dale Wright, Standards Officer Tel:
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The Chinese Government has stated t
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allows antitrust regulators to cons
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Exchange (SAFE). Instead, designate
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for the Protection of Literary and
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accepted CSR principles, and most r
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FDI as a Percentage of Gross Domest
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deposit-taking financial institutio
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The top five locally incorporated f
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program will be available to compan
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Americans who overstay or otherwise
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Language Return to top Mandarin Chi
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Medical Information for Americans T
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U.S. Embassy Beijing: http://beijin
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Website: http://www.mohurd.gov.cn/
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Minister: Sheng Guangzu Main Line:
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International Affairs: (86 10) 8833
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E. Institutions China Meteorologica
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46 Dongsi Xidajie, Dongcheng Distri
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Tel: (86 10) 6209-4114 Fax: (86 10)
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Tel: (86 21) 6252-9985 Fax: (86 21)
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Fax: (86 20) 8666-0703 Shanghai Agr
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Office of U.S. Trade Representative
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