Several Issues Concerning the Specific Application of the Law when Handling Criminal Cases Involving the Infringement of Intellectual Property Rights Interpretation

(1) the illegal turnover is not less than Rmb50,000 or the illegal income is not less than Rmb30,000;

(2) not less than two registered trademarks are passed off and the illegal turnover is not less than Rmb30,000 or the illegal income is not less than Rmb20,000; or

(3) other serious circumstances.

Where the use is characterized by any of the circumstances set forth below, it shall fall under the "exceptionally serious circumstances" specified in Article 213 of the Criminal Law and shall result in a conviction for the crime of passing off a registered trademark and a sentence of a fixed term of imprisonment of not less than three years and not more than seven years, and a fine:

(1) the illegal turnover is not less than Rmb250,000 or the illegal income is not less than Rmb150,000;

(2) not less than two registered trademarks are passed off and the illegal turnover is not less than Rmb150,000 or the illegal income is not less than Rmb100,000; or

(3) other exceptionally serious circumstances.

Article 2: The sale of goods in the knowledge that they bear a counterfeit registered trademark, with a sales amount of not less than Rmb50,000, shall fall under the "relatively large amount" specified in Article 214 of the Criminal Law, and shall result in a conviction for the crime of selling goods with a counterfeit registered trademark and a sentence of a fixed term of imprisonment of not more than three years or criminal detention, and/or a fine.

A sales amount of not less than Rmb250,000 shall fall under the "very large amount" specified in Article 214 of the Criminal Law, and shall result in a conviction for the crime of selling goods with a counterfeit registered trademark and a sentence of a fixed term of imprisonment of not less than three years and not more than seven years, and a fine.

Article 3: The forgery or the manufacture without authorization of representations of the registered trademark of another or the sale of representations of a registered trademark that have been forged or manufactured without authorization, where the forgery, manufacture or sale is characterized by any of the circumstances set forth below, shall fall under the "serious circumstances" specified in Article 215 of the Criminal Law, and shall result in a conviction for the crime of illegally manufacturing or selling illegally manufactured representations of registered trademarks and a sentence of a fixed term of imprisonment of not more than three years, criminal detention or control, and/or a fine:

(1) the number of representations of registered trademarks forged or manufactured without authorization or the number of such representations sold is not less than 20,000, or the illegal turnover is not less than Rmb50,000 or the illegal income is not less than Rmb30,000;

(2) the number of representations of not less than two registered trademarks forged or manufactured without authorization or the number of such representations sold is not less than 10,000, or the illegal turnover is not less than Rmb30,000 or the illegal income is not less than Rmb20,000; or

(3) other serious circumstances.

Where the forgery, manufacture or sale is characterized by any of the circumstances set forth below, it shall fall under the "exceptionally serious circumstances" specified in Article 215 of the Criminal Law, and shall result in a conviction for the crime of illegally manufacturing or selling illegally manufactured representations of registered trademarks and a sentence of a fixed term of imprisonment of not less than three years and not more than seven years, and a fine:

(1) the number of representations of registered trademarks forged or manufactured without authorization or the number of such representations sold is not less than 100,000, or the illegal turnover is not less than Rmb250,000 or the illegal income is not less than Rmb150,000;

(2) the number of representations of not less than two registered trademarks forged or manufactured without authorization or the number of such representations sold is not less than 50,000, or the illegal turnover is not less than Rmb150,000 or the illegal income is not less than Rmb100,000; or

(3) other exceptionally serious circumstances.

Article 4: The passing off of another's patent where the passing off is characterized by any of the circumstances set forth below shall fall under the "serious circumstances" specified in Article 216 of the Criminal Law and shall result in a conviction for the crime of passing off a patent and a sentence of a fixed term of imprisonment of not more than three years or criminal detention, and/or a fine:

(1) the illegal turnover is not less than Rmb200,000 or the illegal income is not less than Rmb100,000;

(2) the patentee incurs direct financial loss of not less than Rmb500,000;

(3) not less than two patents of other persons are passed off and the illegal turnover is not less than Rmb100,000 or the illegal income is not less than Rmb50,000; or

(4) other serious circumstances.

Article 5: Where any of the acts of copyright infringement specified in Article 217 of the Criminal Law is committed for the purposes of obtaining profit and the illegal income derived therefrom is not less than Rmb30,000, such illegal income shall be deemed "relatively large". Where any of the following circumstances are present, "other serious circumstances" shall be constituted and shall result in a conviction for the crime of copyright infringement and a sentence of a fixed term of imprisonment of not more than three years or criminal detention, and/or a fine:

(1) the illegal turnover is not less than Rmb50,000;

(2) not less than 1,000 copies of the copyright holder's written work; musical, cinematographic, television or videographic work; computer software; or other work is reproduced and distributed without the permission of the copyright holder; or

(3) other serious circumstances.

Where any of the acts of copyright infringement specified in Article 217 of the Criminal Law is committed for the purposes of obtaining profit and the illegal income derived therefrom is not less than Rmb150,000, such illegal income shall be deemed "very large". Where any of the following circumstances are present, "other exceptionally serious circumstances" shall be constituted and shall result in a conviction for the crime of copyright infringement and a sentence of a fixed term of imprisonment of not less than three years and not more than seven years, and a fine:

(1) the illegal turnover is not less than Rmb250,000;

(2) not less than 5,000 copies of the copyright holder's written work; musical, cinematographic, television or videographic work; computer software; or other work is reproduced and distributed without the permission of the copyright holder; or

(3) other exceptionally serious circumstances.

Article 6: Where the act specified in Article 218 of the Criminal Law is committed for the purposes of obtaining profit and the illegal income derived therefrom is not less than Rmb100,000, such illegal income shall be deemed "very large" and shall result in a conviction for the crime of selling infringing reproductions and a sentence of a fixed term of imprisonment of not more than three years or criminal detention, and/or a fine.

Article 7: The commission of any of the acts specified in Article 219 of the Criminal Law causing the owner of the trade secrets to incur a loss of not less than Rmb550,000 shall be considered as "causing serious losses to the owner of the trade secrets" and shall result in a conviction for the crime of infringing trade secrets and a sentence of a fixed term of imprisonment of not more than three years or criminal detention, and/or a fine.

Causing the owner of the trade secrets to incur a loss of not less than Rmb2,500,000 shall fall under the "exceptionally serious consequences" specified in Article 219 of the Criminal Law and shall result in a conviction for the crime of infringing trade secrets and a sentence of a fixed term of imprisonment of not less than three years and not more than seven years, and a fine.

Article 8: For the purposes of Article 213 of the Criminal Law, the term "identical trademark" means a trademark that is completely identical to the registered trademark that has been passed off or one that, visually, essentially does not differ from the registered trademark that has been passed off and is sufficient to mislead the public.

For the purposes of Article 213 of the Criminal Law, the term "use" means the act of using a registered trademark or a counterfeit registered trademark on goods, on the packaging or container of the goods, on the instructions for use of the product, on the instrument evidencing the goods transaction, in advertising or publicity materials, in exhibitions or in other commercial activities.

Article 9: For the purposes of Article 214 of the Criminal Law, the term "sales amount" means all the illegal income received and receivable from the sale of goods bearing a counterfeit registered trademark.

The phrase "in the knowledge" as specified in Article 214 of the Criminal law shall be deemed to be constituted if:

(1) one is aware that the registered trademark on the goods one is selling has been altered, replaced or covered;

(2) one has been subject to administrative punishment or borne civil liability for selling goods bearing a counterfeit registered trademark and one again sells the same type of goods bearing the counterfeit registered trademark;

(3) one forges or alters the document of authorization from the trademark registrant or one is aware that such document has been forged or altered; or

(4) another circumstance under which one knew or ought to have known that the goods were ones bearing a counterfeit registered trademark arises.

Article 10: The commission of any of the acts set forth below shall be deemed an act of "passing off another's patent" as specified in Article 216 of the Criminal Law:

(1) marking without permission another's patent number on the products, or the packaging of such products, that one has manufactured or sells;

(2) using without permission another's patent number in advertisements or other publicity materials thereby causing people to mistakenly believe that the relevant technology is another's patented technology;

(3) using without permission another's patent number in a contract thereby causing people to mistakenly believe that the technology under the contract is another's patented technology; or

(4) forging or altering another's patent certificate, patent documents or patent application documents.

Article 11: The direct or indirect charging of a fee through such methods as the publication of paid advertisements, etc. shall fall under the "for the purposes of obtaining a profit" specified in Article 217 of the Criminal Law.

For the purposes of Article 217 of the Criminal Law, the phrase "without the permission of the copyright holder" means that the authorization of the copyright holder has not been obtained or the authorization document from the copyright holder has been forged or altered or the scope of the authorization has been exceeded.

The transmission to the public of another's written work; musical, cinematographic, television or videographic work; computer software; or other work via an information network shall be deemed "reproduction and distribution" as specified in Article 217 of the Criminal Law.

Article 12: For the purposes of the Interpretation, the term "illegal turnover" means the value of the infringing products manufactured, stored, transported and/or sold by the doer in the course of infringing against the intellectual property rights. The value of infringing products that have been sold shall be calculated based on the actual sales price. The value of manufactured, stored, transported and unsold infringing products shall be calculated based on the marked price or the average actual sales price of the infringing products that has been ascertained. If the price is not marked on the infringing products or if it is impossible to ascertain the actual sales price, their value shall be calculated based on the median market price of the infringed products.

If intellectual property infringement has been committed on more than one occasion but has not been subjected to administrative handling or criminal punishment, the illegal turnover, illegal income or sales amount shall be calculated cumulatively.

For the purposes of Article 3 hereof, the term "representation" means a representation that bears a complete likeness of a trademark.

Article 13: If the crime of passing off a registered trademark specified in Article 213 of the Criminal Law is committed and if goods bearing such counterfeit registered trademark are sold and such sale constitutes a criminal offence, the perpetrator shall be convicted of, and punished for, the crime of passing off a registered trademark in accordance with Article 213 of the Criminal Law.

If the crime of passing off a registered trademark specified in Article 213 of the Criminal Law is committed and if goods are sold in the knowledge that they bear another's registered trademark that has been passed off and such sale constitutes a criminal offence, the joinder of punishments for plural offences shall be applied.

Article 14: If the crime of copyright infringement specified in Article 217 of the Criminal Law is committed and if such infringing reproductions are sold and such sale constitutes a criminal offence, the perpetrator shall be convicted of, and punished for, the crime of copyright infringement in accordance with Article 217 of the Criminal Law.

If the crime of copyright infringement specified in Article 217 of the Criminal Law is committed and if reproductions are sold in the knowledge that they infringe another's copyright and such sale constitutes a criminal offence, the joinder of punishments for plural offences shall be applied.

Article 15: If a work unit commits any of the acts specified in Articles 213 to 219 of the Criminal Law, the punishment assessed for a conviction shall be three times that for a commensurate criminal offence committed by an individual as specified herein.

Article 16: If anyone is well aware that another is committing the crime of intellectual property right infringement but provides him loans, funds, bank accounts, invoices, supporting documentation, authorization documents, production or business premises or such facilitating conditions or assistance as transport, storage, import or export agency services, etc., he shall be punished as an accomplice to the crime of intellectual property right infringement.

Article 17: In the event of a conflict between the Interpretation and previously issued judicial interpretations concerning the crime of intellectual property right infringement, such judicial interpretations shall cease to apply upon the implementation of the Interpretation.