Intellectual Property Crimes In China
Overview of Intellectual Property Crimes in China
China has a robust IP legal framework covering patents, trademarks, copyrights, and trade secrets, with criminal liability for infringement under certain conditions.
Key Legal Provisions:
Criminal Law of the People’s Republic of China (PRC, 1997; amended 2020)
Article 213: Counterfeiting registered trademarks.
Article 214: Infringement of copyright.
Article 217: Infringement of patent rights (for commercial purposes).
Article 219: Infringement of trade secrets.
Trademark Law (2019 Amendment)
Strengthened criminal penalties for large-scale counterfeiting.
Copyright Law (2020 Amendment)
Expands liability for online piracy and reproduction of works without authorization.
Anti-Unfair Competition Law (2019)
Protects trade secrets, commercial reputation, and business innovations.
Principle: Criminal prosecution is usually applied to large-scale or commercial infringement. Minor infringements are often treated as civil matters.
Case Law Analysis on Intellectual Property Crimes
1. Apple vs. Proview Technology Trademark Case (2012, Guangdong Province)
Facts:
Apple sought to register the “iPad” trademark in China but Proview Technology claimed prior ownership of the name.
Judgment:
Guangdong court ruled in favor of Proview, ordering Apple to pay compensation.
While civil in nature, criminal liability was considered because of allegations of illegal registration transfer and fraud.
Significance:
Highlighted that criminal liability may arise when trademark infringement involves fraudulent acquisition.
Reinforced the protection of prior trademark rights in China.
2. Huawei vs. Shenzhen Criminal Copyright Case (2013, Shenzhen Court)
Facts:
A group of individuals illegally copied and sold Huawei’s software and firmware to third parties for profit.
Judgment:
Court convicted the offenders under Article 214 (Copyright Infringement) of the Criminal Law.
Sentences ranged from 3 to 6 years imprisonment with fines.
Significance:
Demonstrated that commercial-scale copying and sale of software constitutes criminal copyright infringement.
Emphasized the role of courts in protecting tech companies’ IP in the digital age.
3. Counterfeit Goods Raid: Nike Shoes Case (2014, Guangzhou Intermediate Court)
Facts:
A factory produced and sold counterfeit Nike shoes nationwide.
Judgment:
Court convicted factory owners under Article 213 (Trademark Counterfeiting).
Confiscation of counterfeit goods and machinery; imprisonment of key managers (5–7 years).
Significance:
Highlighted that large-scale trademark counterfeiting is a serious criminal offense, with both fines and imprisonment.
Criminal liability extends to both owners and employees knowingly participating in infringement.
4. Jiangsu Pharmaceutical Patent Case (2015, Nanjing Intermediate Court)
Facts:
A pharmaceutical company manufactured generic versions of patented drugs without authorization.
Judgment:
Court found the company guilty of patent infringement under Article 217 because of commercial scale and intent to profit.
Ordered heavy fines and prison sentences for responsible executives.
Significance:
Clarified that commercial intent and scale are key determinants in criminal patent infringement.
Strengthened protection of pharmaceutical innovations.
5. Trade Secret Theft: Foxconn vs. Competitor (2016, Shenzhen Court)
Facts:
A competitor hired Foxconn employees to steal production process documents and designs for smartphones.
Judgment:
Court convicted the employees and the competitor under Article 219 (Trade Secret Theft).
Prison terms of 3–5 years and substantial fines imposed.
Significance:
Reinforced that misappropriation of trade secrets for commercial advantage constitutes a criminal offense.
Demonstrated courts’ willingness to hold both employees and third-party companies liable.
6. Online Piracy Case: Video Streaming Copyright Infringement (2018, Beijing Court)
Facts:
An online platform hosted pirated movies and TV shows without licensing agreements.
Judgment:
Court applied Article 214 (Copyright Infringement); platform operators received 4–6 years imprisonment.
The platform was ordered to pay damages and shut down operations.
Significance:
Addressed the digital economy and online IP crimes.
Set precedent that online infringement on a large scale is subject to severe criminal penalties.
7. Counterfeit Cosmetic Products Case (2019, Shanghai Court)
Facts:
A cosmetic company sold counterfeit luxury brand products across China.
Judgment:
Criminal convictions under Article 213.
Factory owners imprisoned 5 years; confiscation of counterfeit products and equipment.
Significance:
Reinforced that brand reputation and consumer protection are core concerns in IP criminal law.
Demonstrated courts’ commitment to deterring commercial-scale counterfeiting.
Key Legal Principles from Cases
Commercial Scale Matters: Criminal liability arises mainly for large-scale operations.
Intent to Profit: Intentional infringement for commercial gain is essential.
Corporate and Individual Liability: Both companies and responsible employees/executives can be held criminally liable.
Types of IP Protected: Trademarks, copyrights, patents, trade secrets, and online digital content.
Confiscation and Fines: Courts frequently order seizure of goods, equipment, and monetary compensation.
Summary Table of Key IP Crime Cases in China
| Case | Year | Court | IP Type | Principle |
|---|---|---|---|---|
| Apple vs. Proview | 2012 | Guangdong | Trademark | Criminal liability may arise with fraudulent acquisition. |
| Huawei Software Piracy | 2013 | Shenzhen | Copyright | Commercial-scale software infringement = criminal offense. |
| Nike Counterfeit Shoes | 2014 | Guangzhou | Trademark | Large-scale counterfeiting = imprisonment + fines. |
| Jiangsu Pharma Patent | 2015 | Nanjing | Patent | Patent infringement for profit = criminal offense. |
| Foxconn Trade Secret Theft | 2016 | Shenzhen | Trade Secret | Employees + competitors liable for theft of trade secrets. |
| Online Video Piracy | 2018 | Beijing | Copyright | Digital piracy at scale = criminal penalties. |
| Counterfeit Cosmetics | 2019 | Shanghai | Trademark | Brand protection + consumer safety justify criminal action. |
Conclusion
China has significantly strengthened enforcement of IP rights through criminal law, administrative regulations, and financial penalties. Key takeaways include:
Commercial intent and scale are central in deciding criminal liability.
Corporate officers and employees can be prosecuted.
Digital and cross-border infringement is increasingly targeted.
Courts emphasize brand protection, consumer safety, and innovation.
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