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OPINIONS OF THE SUPREME PEOPLE’S COURT ON COMPREHENSIVELY INTENSIFYING THE TRIAL WORK ON INTELLECTUAL PROPERTY RIGHTS TO SUPPLY JUDICIAL BACKUP FORCE FOR THE CONSTRUCTION OF AN INNOVATIVE COUNTRY






Circular of the Supreme People’s Court Concerning the Printing and Distribution of the Opinions of the Supreme People’s Court on Comprehensively
Intensifying the Trial Work on Intellectual Property Rights to Supply Judicial Backup Force for the Construction of an Innovative
Country

[2007] No.1 of the Supreme People’s Court
Each local people’s court at each level of the whole nation, military courts at each level, each intermediate and grass-root court
of railway transportation, each maritime court and courts at each level of Xinjiang Production and Construction Army Corps:

We hereby print and distribute the Opinions of the Supreme People’s Court on Comprehensively Intensifying the Trial Work on Intellectual
Property Rights to Supply Judicial Backup Force for the Construction of an Innovative Country to you, please earnestly implement
them by considering the actual situation of your trial work.
The Supreme People’ Court

January 11, 2007

Opinions of the Supreme People’s Court on Comprehensively Intensifying the Trial Work on Intellectual Property Rights to Supply Judicial
Backup Force for the Construction of an Innovative Country

By proceeding from a strategic height of comprehensively building a well-off society and accelerating the undertaking of socialist
modernization, the CPC Central Committee with Comrade Hu Jintao as the general secretary expressly proposed the goal and task of
building China into an innovative country in the Decision of the Central Committee of the Communist Party of China and the State
Council Concerning the Implementation of the Outline of Science and Technology Planning and the Improvement of the Ability to Innovate
Independently and the Decision of the Central Committee of the Communist Party of China Concerning Some Significant Matters on Constructing
a Socialist Harmonious Society. In order to bring into full play the judicial function of the people’s courts so as to provide strong
and reliable judicial backup force for the construction of an innovative country, we hereby propose the following opinions on comprehensively
intensifying the trial work on intellectual property rights.

I.

Sufficiently understanding the great significance of comprehensively intensifying the trial work on intellectual property rights

1.

Comprehensively intensifying the trial work on intellectual property rights would surely boost the construction of an innovative country.
The people’s courts, as the judicial organs of the state, provide judicial protection for intellectual property rights, which possesses
a basic station in the overall law enforcement protection system for intellectual property rights of the state and plays a leading
role. In respect of adjusting intellectual property right relationships, protecting the lawful rights and interests of the obligees
of intellectual property rights, punishing the crimes impairing intellectual property rights and maintaining socialist market economic
order, etc, the people’s courts bear irreplaceable legal responsibilities and undertake significant missions. Comprehensively intensifying
the trial work on intellectual property rights would surely boost the implementation of the strategy of reinvigorating China by means
of developing human resources as well as the comprehensive implementation and embodiment of the guideline of respecting labor, knowledge,
talents and innovation.

2.

Comprehensively intensifying the trial work on intellectual property rights would surely conduce to building up a good international
image of China. Comprehensively intensifying the judicial protection of intellectual property rights is not only an actual requirement
for China to take part in international competition and to build up a more attractive soft investment environment for better introducing
in foreign capital and advanced technologies, but also an objective requirement for China to fulfill its external promises and build
up a good international image. Comprehensively intensifying the trial work on intellectual property rights would surely conduce o
better protecting and attracting foreign investment, ensuring and upgrading the international competitiveness of Chinese enterprises
and further promoting the strategy of opening wider to the outside world. By severely punishing the tortious acts upon intellectual
property rights in accordance with law, rigorously punishing such gross violations and crimes as trademark counterfeit and piracy
in accordance with law and fairly safeguarding the lawful rights and interests of the foreign and Chinese parties concerned in accordance
with law, the people’s courts would surely set up a good image of Chinese judicial protection of intellectual property rights.

3.

Comprehensively intensifying the trial work on intellectual property rights would surely accelerate the construction of a socialist
harmonious society. The trial work on intellectual property rights shall conduce to the respect of the creative desires beneficial
for social progress, the support of the creative activities, the exertion of the creative abilities and the protection of the creative
achievements and make the society energetic and vigorous. It shall also promote and guarantee the set-up of honest mechanism in the
society, direct people to keep promises, attach importance to good credit, maintain good morality, trust each other as well as to
increase value identity and cohesiveness so as to realize an honesty and friendly society.

II.

The guiding ideology, goal and task as well as basic principles for the trial work on intellectual property rights

4.

For the purpose of providing judicial backup force for building an innovative country, we must stick to being directed by Deng Xiaoping
Theory and the important thoughts of “Three Represents”, effectively and comprehensively carry out the scientific view of development
in an all-round way, adhere to the guideline of “fair jurisdiction and serving the people with all heart” and the working theme of
“justice and efficiency” as required for building an innovative country and further intensify the judicial protection of intellectual
property rights. We shall also protect intellectual property rights in accordance with law, maintain fair competition, boost independent
innovation, serve the policy of opening to the outside world and implement the judicial protection of intellectual property rights
throughout the whole process of creating, managing and using intellectual property rights so as to provide strong and effective protection
for the execution of intellectual property right strategy of the state and the build-up of an innovative country and socialist harmonious
society and try more best to build up a legal environment of being impartial, highly-efficient and authoritative.

5.

The main goals and tasks of providing judicial protection for the build-up of an innovative country are as follows: the trial work
on intellectual property rights shall be intensified in an all-around way; the functions and roles of criminal, civil and administrative
trial of intellectual property rights shall be given full play; the litigation system of intellectual property rights shall be ceaselessly
improved; the judicial protection system for intellectual property rights shall be further sound; the quality of the judges who are
responsible for the trial work on intellectual property rights shall be visibly increased; a sound judicial protection environment
of intellectual property rights where the jurisdiction is fair, highly-efficient and authoritative, the obligees safeguard their
lawful rights actively and conveniently, the infringers are punished definitely as well as knowledge and fortune circulate orderly
shall be basically set up; the judicial protection ability and level of intellectual property rights shall be visibly increased;
and the judicial requirements for building up an innovative country shall be comprehensively satisfied.

6.

The following principles shall be observed for providing judicial protect for building an innovative country: first, fair jurisdiction
shall be adhered to. Fair jurisdiction shall be deemed as the soul and life of the trial work on intellectual property rights all
the time and d Fairness and justice in the field of intellectual property rights shall be realized and maintained through lawful,
fair, highly-efficient and authoritative jurisdiction over intellectual property rights. Second, the principle of uniform jurisdiction
shall be adhered to. We shall handle cases strictly subject to legal provisions, ensure uniform application of laws, regulations
and judicial interpretations to the trial work involving intellectual property rights and make great efforts to realize the coordination
between judicial standards and ruling results. Third, the principle of equal protection shall be adhered to. The lawful rights and
interests of both foreign and Chinese parties concerned shall be protected equally, local protectionism and self-centered operation
by different departments shall be firmly rejected and local blockade and industrial monopoly shall be overcome. Fourth, the principle
of interest balance shall be adhered to. The relationship between protecting intellectual property rights and protecting public interests
and that between inspiring scientific and technological innovation and arousing the application of science and technology shall be
properly handled. Intellectual property rights shall be effectively protected and the abuse of right and illegal monopoly shall be
deterred at the same time. Fifth, the principle of serving the overall situation shall be adhered to. The perspective of overall
situation and service awareness shall be firmly established, the simple business perspective of handling a case just as a case shall
be gotten over and the organic combination of the legal effect of handling a single case and its social effect shall be realized.

III.

Giving full play to the functional role of judicial protection of intellectual property rights and guaranteeing the whole society’s
creative energy and innovative ability

7.

Rigorously punishing the crimes against intellectual property rights in accordance with law. We shall bring into full play the functional
role of the criminal judicial protection of intellectual property rights, employ each kind of measures of criminal punishments in
accordance with law so as to bring into play such functions as criminal punishment and crime prevention against intellectual property
rights. With respect to such criminal behaviors on intellectual property rights as counterfeit and piracy, etc, the standards for
conviction and sentencing shall be further consummated and unified, the application of probation shall be regulated and severer punishment
shall be imposed according to the specific criminal circumstance and the harmful consequences; the application and enforcement of
pecuniary penalty shall be strengthened simultaneously with the application of the principal penalty; attention shall be paid to
economically depriving the infringers of their capacity of and conditions for recommitting crime by means of recovering illegal proceeds,
capturing crime instruments, destroying the tortious products and ordering them to compensate for losses; self-incriminating criminal
cases infringing upon intellectual property rights shall be tried in accordance with to law and the right of a victim to bring private
criminal prosecution shall be effectively protected; in case it is found when trying an administrative case that a suspected criminal
offense to which criminal punishment shall be imposed is only given administrative punishment or administrative handling, the criminal
clew shall be timely transferred to the public security organ for investigation and disposal simultaneously with the proposition
of a judicial suggestion to the administrative organ; in case any suspected criminal clew is found when trying a civil case, where
it meets the conditions for lodging private criminal prosecution, the obligee shall be informed that he/she has the right to lodge
a private criminal prosecution at the same time; in case a public prosecution shall be lodged in accordance with law, the information
and materials on the suspected crime shall be timely transferred to the public security organ for investigation and disposal, the
civil case may be continually tried if the trial is not affected by the transfer.

8.

Appropriately trying the civil cases on intellectual property rights. The civil trial of intellectual property rights acts as a leading
role in protecting intellectual property rights and stimulating independent innovation, to which we shall attach importance to giving
full play. Cases of technical intellectual property rights on patent, technical secret, computer software, new plant variety and
layout-design of integrated circuits shall be tried in accordance with law, innovation results shall be reasonably and moderately
protected and the protection of the key core technologies playing a leading role in the significant breakthrough of economic growth
and possessing independent property rights shall be intensified; cases of intellectual property rights on such marks as trademark
and landmark and each kind of cases of unfair competition shall be tried in accordance with law so as to severely regulate market
competition order; cases of intellectual property rights on such expression vehicles as works and audio and video products shall
be tried in accordance with law so as to boost the sound development of the copyright industries; new types of disputes over intellectual
property rights on computer network and new technologies shall be tried in accordance with law so as to boost the healthy growth
of emerging industries; foreign-related cases of intellectual property rights shall be tried in accordance with law so as to equally
protect the lawful rights and interests of foreign and Chinese related parties; traditional knowledge, inheritance resources and
non-governmental literature shall be actively protect so as to safeguard the holders’ rights and interests of being informed and
consent as well as sharing benefits; the scope of rights shall be scientifically and reasonably interpreted in accordance with law,
apply the methods for determining infringement shall be correctly applied and the conditions for determining the equal characteristics
of patent infringement cases shall be strictly grasped; well-known trademarks shall be cautiously determined in accordance with law,
no well-known trademark may be determined if any case is beyond the determination scope or fails to meet the conditions for determination
or the infringement accused by the plaintiff is not tenable,; attention shall be paid to providing dual protection for the parties
involved in a case on business secrets and balance the relationship between the freedom of selecting work and the protection of business
secrets; the effect and responsibilities of a contract on intellectual property right shall also be accurately determined, the conditions
for rescinding g such contract shall be strictly stipulated and the will autonomy of the parties concerned shall be fully respected.

9.

Supervising and supporting the administration of administrative authorities in accordance with law. We shall give play to the judicial
examination function of administrative trial on the administrative enforcement of intellectual property right law, supervise and
support the administration of administrative authorities in accordance with law, safeguard the lawful rights and interests of the
administrative counterparts of intellectual property rights, protect the administrative order of intellectual property rights and
boost the administrative protection of intellectual property rights. We shall support administrative authorities to crack down upon
tortious acts in accordance with law; in case an administrative authority files an application for compulsory execution of an administrative
handling decision, where it meets the conditions for compulsory execution, it shall be timely ruled and executed compulsorily; intensify
judicial supervision over the administrative omission of the serious tortious acts against intellectual property rights and urge
the administrative authorities for law enforcement to refrain the tortious acts in light of their functions; perform the duty of
judicial review over the cases of disputes over the ownership of such intellectual property rights as patent right and trademark
right and carry out the examination on the legality of an administrative behavior in terms of fact verification and law application
in an all-around way.

10.

Intensifying supervision over the trial of intellectual property rights and coordination between cases. We shall smooth the channel
for applying for the retrial of intellectual property right cases, severely examine a case that attracts much attention from the
related parties and the society, and where any wrong judgment is found, we shall timely retry the case and revise the original judgment;
we shall have the work for stopping litigation and visits done properly in accordance with the relevant laws and policies where it
is determined that an appeal is made unreasonably,; we shall intensify supervision over the trial of cases of disputes over administrative
authorization of intellectual property rights. With respect to an affiliated case highly affecting the society, the trial courts
shall attach importance to the communication with each other, unify the trial standards and ensure the consistency of judgments,
in case the judgments is found to be apt to conflict with each other, the situation shall be reported to the court of higher level
for guidance, coordination and resolution; the reporting system for significant intellectual property right cases shall be set up,
where a case affects the overall situation and has great impact, or the object litigation is huge and is a new-type case without
precedent, the court accepting such case shall notify the trial situation to the court of higher level of in a timely manner; and
we shall further perfect the system for the determination and archival filing of well-known trademarks.

11.

Perfecting the system for enforcing intellectual property right cases. The system for centralized enforcing intellectual property
right cases shall be set up, any court accepting relatively more intellectual property right cases shall appoint a special collegial
panel or group in the enforcement department to be in charge of the centralized enforcement; in case any person against whom a judgment
or order is being executed refuses to stop infringing upon as required in an effective judgment and goes on the original tortious
act, the obligee may investigate his/her civil liabilities in accordance with law, moreover, the court shall assist the public security
organ or the procuratorial organ to investigate his/her criminal liabilities under the crime of refusing to enforce a judgment.

12.

Perfecting the system for the jurisdiction and acceptance of civil intellectual property right cases. In principle, the first instance
of civil intellectual property right cases shall be conducted by the courts at or above the intermediate level; with respect to a
place where there exists too much pressure on the trial of these cases owing to the vast occurrence of such cases, the higher court
may report the situation to the Supreme People’s Court and request it to designate some grass-root courts to rule some intellectual
property right cases; the system for designing jurisdiction of cases involving patent, new plant variety and the layout-design of
integrated circuits shall be exercised strictly; the standards for the grade jurisdiction of civil intellectual property right cases
shall be adjusted appropriately and the intermediate courts’ acceptance scope of the cases of first instance shall be enlarged; with
respect to a intellectual property right case endowed with general significance in the application of law, the lower court may report
it to the higher court to try upon discussion and decision of the judicial committee, and the higher court may directly try the case
where it determines upon examination that the case meets the related conditions; we shall actively probe into the reform of subject-matter
jurisdiction for different instances of intellectual property right cases; with regard to a case of provisional measures before a
lawsuit is lodged, the department putting it on record shall immediately transfer it to the division in charge of trying intellectual
property right cases for examination by the professional judicial personnel, and ensure judgment shall be ensured to be made within
the statutory time limit, and enforced immediately through the coordination of the judicial personnel.

13.

Intensifying compensation for infringement and civil punishment in accordance with law. We shall reinforce the applicable rules on
compensating for the infringement upon intellectual property rights, implement the principle of full compensation, make efforts to
decrease the cost for defending rights and enhance the overawing effectiveness of civil punishment. We shall appropriately loose
the obligees’ burden of proof; in case it is proved that an infringer has committed the tortious activity on many occasions at different
time, we may presume that the tortious act is continuous, based on which we determine the corresponding compensation extent; in case
mental injury is suffered by a plaintiff, as a natural person, from the tortious act, we shall, in light of his/her petition, determine
reasonable consolation money for mental injury; as for the attorney fees paid for a litigation by the parties concerned according
to the related provisions, they shall be reasonably determined and listed into the compensation extent in light of the petitions
of the parties concerned and by comprehensively taking into consideration such elements as the necessity, the degree of support to
all claims, the proportion between the claimed amount of damages and the actually judged amount, etc; we shall, in light of the subjective
faults of the parties concerned, determine the corresponding liabilities for compensation, and apply civil sanction to punish the
infringers in accordance with law.

14.

The provisional measures shall be applied in a correct manner and in accordance with law. With respect to any application for provisional
injunction, prior enforcement, property or evidence conservation filed by a party concerned before a lawsuit is brought or during
the processing of a lawsuit, it shall be accepted actively, examined swiftly, ruled cautiously and enforced immediately. We shall
pay high attention to the time effect of the provisional measures adopted before a lawsuit is brought; understand the material conditions
for the adoption of provisional measures in a correct manner, with respect to provisional injunction, we shall, when stressing on
the examination of infringement possibility, take into consideration the prescribed period for litigation and the damage situation
at the same time; with respect to evidence conservation, we shall, when taking the infringement possibility into account, stress
on considering such elements as evidence risks and the applicant’s ability to obtain evidences at the same time; we shall also scientifically
and reasonability determine the guarantee requirements.

15.

The facts on professional technologies shall be determined appropriately. We shall stress on giving play to the roles of people’s
assessor, expert witness, expert consultation and technical appraisement in settling the problems faced during the determination
of the facts on professional technologies. We shall, upon the recommendation of the grass-root courts of the cities the experts reside,
pay attention to appointing the experts who possesses professional technological speciality and certain legal knowledge and are generally
recognized; support the parties concerned of a case to invite the personnel with expertise to present in court as auxiliary personnel
of a lawsuit and explain the technical problems involved in the case without being restricted by the time limit for producing evidence;
with respect to a complex and difficult intellectual property right case, we may consult the technical and legal experts in the related
field; with respect to a professional technological problem hard to determine by any other means, technical appraisement may be conducted
by entrusting a professional organto do so. With respect to such evidential materials formed abroad as publication, whose authenticity
may be directly and preliminarily determined and are not required to go through the formalities for notarial certification, except
that the opposite party concerned is able to put forward effective challenge on its authenticity and the party who produces such
evidence can’t retort effectively.

16.

Any abuse of intellectual property right shall be forbidden. The right limits of the obligees of intellectual property rights and
the general public shall exactly defined, and such defending grounds of the parties concerned as prior right, prior use right, known
technology, estoppel, fair use and legitimate use, etc, shall be examined and supported in accordance with law; acts illegally monopolizing
technologies and obstructing the development of technology shall be prevented, such causes for the nullification of technical contracts
as restricting research and development, forcible grantback, blocking implementation, tie-in sale, restricted purchase and forbidding
effectiveness questioning, etc shall be verified in accordance with so as to maintain fair competition in the technological market;
the obligees shall be prevented from abusing infringement warning and litigious right and the system for determining non-tort actions
and that for compensating correspondingly for indiscriminate lawsuits and shall be perfected.

17.

Making greater efforts in conciliating intellectual property right cases. We shall, when trying the intellectual property right cases
by means of judgment, stress on the conciliation of such cases simultaneously, stick to the principle of “to conciliate when possible,
judge when necessary, combine conciliation with judgment and solve the dispute when the case is concluded” and increase the rate
of the conciliated cases and that of the compromised and withdrawn cases and implement the conciliation of throughout the whole process
of trial; attach high importance to the conciliation used in the cases of provisional measures before litigation, actively probe
and summarize the experience in coordinating administrative cases of intellectual property rights and self-incriminating criminal
cases; attach importance to giving play to the roles of industrial associations and professional personnel in communication and coordination
as well as removing the opposing sentiment and resolving contradictions and disputes.

18.

Earnestly implementing the measures of jurisdiction for the people. We shall intensify litigation guidance and interpretation, enhance
the parties’ ability to participate in actions, and strengthen the judgment’s public reliability and executive force. We shall prepare
a guide for the lawsuits of intellectual property rights; stick to the system of open trial; comprehensively implement the system
of the notification of rights and obligations to the parties concerned and the system of warning litigation risk; probe into the
system for directing the parties in producing evidences; probe into the trial implementation of investigation order system, with
respect to any evidence that is kept by the related department under the state and can’t be acquired by a party concerned on his/her/its
own strength or any other evidence that can’t be obtained by a party concerned owing to impersonal reasons, the court may try to
authorize the party’s attorney agent to investigate and obtain the evidence; we shall make greater efforts in conducting judicial
relief, deduct or exempt the legal cost of the intellectuals with economic difficulties and the enterprises under especially difficult
situation or close to bankruptcy; intensify the examination of agent capacity and regulate intellectual property right lawsuits lodged
by citizens by proxy in accordance with law; regulate the relationship between judges and lawyers in accordance with law, earnestly
examine the litigation materials presented by lawyers in accordance with law and fully hear the lawyers’ opinions; reinforce the
awareness of concluding a trial within the prescribed time limit and the awareness of efficiency, strictly examine and cautiously
decide to discontinue an action so as to relieve the parties from unnecessary litigation exhaustion; enhance the capacity of preparing
ruling papers, in which the right and wrong shall be clarified by legal reasoning.

IV.

Taking effective measures to enhance the judicial protection of intellectual property rights

19.

Intensifying the professionalization of the trial team of intellectual property rights. We shall attach importance to choosing and
cultivating the intellectual property right judges from the persons who are accomplished in laws, have relatively good base in foreign
languages, possess scientific or engineering background and have certain trial experience so as to further improve the professional
structure of the trial team of intellectual property rights; attach importance to keeping relatively stable the judge team of intellectual
property rights; build up a scientific and reasonable performance appraisal system and avoid the practice of simply taking the number
of cases as a measurement standard; intensify the training of the intellectual property right judges and enhance their professional
skills; enhance their political quality and professional ethics of the intellectual property right judges and effectively improve
their sense of honesty and jurisdiction.

20.

Perfecting the trial structure of intellectual property rights. The Supreme People’s Court, any higher court, intermediate court accepting
relatively more intellectual property right cases and any grass-root court appointed to accept intellectual property right cases
shall set up independent intellectual property division, while any other intermediate court shall establish a collegial panel to
uniformly try the intellectual property right cases; such functional departments as those in charge of putting a case on record,
criminal trial, administrative trial, enforcement and supervision on trial, etc, shall designate special collegial panels and professional
personnel to take charge of examining, trying and enforcing of the intellectual property right cases .

21.

Intensifying the coordination and cooperation among the functional departments in charge of protecting intellectual property rights.
The business coordination and communication among the departments in charge of the criminal trial, civil trial and administrative
trial of the cases of intellectual property rights shall be intensified, the work connection between the departments in charge of
the trial of intellectual property rights and the departments in charge of supervising trials shall be intensified, and information
notification and business communication between the courts at higher level and that at lower level shall be intensified also. We
shall attach importance to intensifying work coordination with the related administrative enforcement departments of intellectual
property rights, intensifying cooperation and mutual restriction with the public security and procuratorial organs when carrying
out the work involving the crim

INTERPRETATION OF THE SUPREME PEOPLE’S COURT ON SOME MATTERS ABOUT THE APPLICATION OF LAW IN THE TRIAL OF CIVIL CASES INVOLVING UNFAIR COMPETITION

Announcement of the Supreme People’s Court

Fa Shi [2007] No. 2

The Interpretation of the Supreme People’s Court on Some Matters about the Application of Law in the Trial of Civil Cases Involving
Unfair Competition, has been adopted by the 1412th meeting of the Judicial Committee of the Supreme People’s Court on December 30,
2006. It is hereby promulgated and shall enter into force as of February 1, 2007.
The Supreme People’s Court

January 12, 2007

Interpretation of the Supreme People’s Court on Some Matters about the Application of Law in the Trial of Civil Cases Involving Unfair
Competition

(Adopted at the 1412th meeting of the Judicial Committee of the Supreme People’s Court on December 30, 2006 )

For the purpose of correctly hearing the civil cases involving unfair competition, lawfully protecting the legitimate rights and interests
of business operators, and maintaining the order of market competition, the present Interpretation is constituted in accordance with
the General Principles of the Civil Law of the People’s Republic of China, the Anti-unfair Competition Law of the People’s Republic
of China, and the Civil Procedure Law of the People’s Republic of China and in combination with the experiences and actual situation
of the trial practice.

Article 1

Well-known commodities as stipulated in Subparagraph (2) of Article 5 of the Anti-unfair Competition Law refer to those commodities
that have certain market popularity within the territory of China and are known by the public concerned. The people’s court shall
take into account the time, region, volume and targets for selling such commodities, the duration, degree and scope for any promotion
of such commodities, as well as the protection situation as well-known commodities, and make comprehensive judgments when affirming
well-known commodities. The burden of proof for the market popularity of commodities shall be assumed by the plaintiff.

In case an identical or similar name, package or ornament with that typical to a well-known commodity is used within a different region,
it will not constitute the unfair competition as stipulated in Subparagraph (2) of Article 5 of the Anti-unfair Competition Law
if the later user can prove its good faith in using it. Where the sources of commodities of the earlier user are confused due to
the later business activities conducted within the same zone, the people’s court shall give support when the earlier user pleads
the court to order the later to add other signs to make a distinction on the sources of its commodities.

Article 2

In case the name, package and ornament of commodities is the notable characteristics for distinguishing the source of commodities,
it shall be deemed as the typical name, package and ornament as stipulated in Subparagraph (2) of Article 5 of the Anti-unfair Competition
Law. In case of any of the following circumstances, the people’s court shall not ascertain them as the typical name, package and
ornament of well-known commodities:

(1)

the commonly-used name, graphics or model of the commodities;

(2)

the name of the commodities that just directly specifies the quality, major raw materials, functions, utilities, weight, quantity
or any other characteristic of the commodities;

(3)

the shape produced due to the nature of the commodities, the shape of the commodities that should be produced for the purpose of obtaining
technical effects, as well as the shape that produces substantial value to the commodities; or

(4)

other name, package or ornament of the commodities that has no notable characteristic.

In case the notable characteristic occurs upon use under any circumstance as stipulated in Subparagraph (1), (2) or (4) of the preceding
paragraph, it can be regarded as a typical name, package and ornament.

In case the typical name, package or ornament of a well-known commodity includes the name, graphics, or model common to the said commodity
in question, or directly indicates the quality, major raw materials, functions, utilities, weight, quantity or any other characteristic
of the said commodity, or involves the name of the place, if it is used by any other party for narrating commodities impartially,
it shall be deemed that an unfair competition is not constituted.

Article 3

In case the ornament of the business place, the pattern of business appliances, or the clothes of operating personnel, and etc. constitutes
an overall business image with a unique style, it may be ascertained as the ornament as stipulated in Subparagraph (2) of Article
5 of the Anti-unfair Competition Law.

Article 4

In case of any confusion concerning the source of a commodity in the public concerned, including the misapprehension of such a typical
relationship as licensed use or affiliation with the business operator of a well-known commodity, it shall be regarded as causing
the confusion with the well-known commodity of someone else, and making the consumers mistake it to be a well-known commodity as
stipulated in Subparagraph (2) of Article 5 of the Anti-unfair Competition Law.

In case any identical name, package or ornament of a commodity or the one that is no difference with the forged one in terms of visual
effect is used on the same commodity, it shall be deemed as sufficiently to cause the confusion with the well-known commodity of
someone else.

The identity or similarity with the typical name, package or ornament of a well-known commodity may be ascertained with reference
to the principles and methods for judging identical or similar trademarks.

Article 5

In case the name, package or ornament of a commodity is a sign that can not be used as a trademark as stipulated in Paragraph 1 of
Article 10 of the Trademark Law, if the party concerned applies to the court for protection in accordance with Subparagraph (2)
of Article 5 of the Anti-unfair Competition Law, the people’s court shall not give support.

Article 6

A name of any enterprise registered by the enterprise registration competent authority, or a name of any foreign enterprise used
within the territory of China for commercial use shall be ascertained as an enterprise name as stipulated in Subparagraph (3) of
Article 5 of the Anti-unfair Competition Law. A shop name in the name of enterprise that has certain market popularity and is acknowledged
by the public concerned may be ascertained as a enterprise name as stipulated in Subparagraph (3) of Article 5 of the Anti-unfair
Competition Law.

The name of any natural person used in the business operation of commodities shall be ascertained as a name as stipulated in Subparagraph
(3) of Article 5 of the Anti-unfair Competition Law. The pen name or stage name of any natural person that has certain market popularity
and is acknowledged by the public concerned may be ascertained as a name as stipulated in Subparagraph (3) of Article 5 of the Anti-unfair
Competition Law.

Article 7

As regards the commercial use within the territory of China that includes the use of the typical name, package or ornament of a well-known
commodity, or use of the enterprise post_title or name for a commodity, commodity packages or commodity exchange documents, or for advertisements,
exhibitions or any other commercial activities, it shall be ascertained as the use as stipulated in Subparagraphs (2) and (3) of
Article 5 of the Anti-unfair Competition Law.

Article 8

In case of any of the following acts committed by a business operator, if it is sufficient to cause the misapprehension of the public
concerned, it may be ascertained as a false or misleading promotion as stipulated in Paragraph 1 of Article 9 of the Anti-unfair
Competition Law:

(1)

implementing biased or contrastive promotion of commodities;

(2)

implementing the promotion of commodities by adopting unsure scientific viewpoints or phenomena as the facts for final conclusions;
or

(3)

implementing the promotion of commodities by way of using vague language or other deceptive methods.

In case the commodities are publicized by way of obviously exaggerating, if it is insufficient to cause the misapprehension of the
public concerned, it shall not be ascertained as the false or misleading promotion.

The people’s court shall ascertain the false or misleading promotion in light of daily life experiences, the general attention of
the public concerned, the fact misunderstood, as well as the reality of the promotion objects, and etc..

Article 9

If the related information may not be aware of by the related personnel in the field therefrom and is difficult to be obtained, it
shall be ascertained as unknown to the public as stipulated in Paragraph 3 of Article 10 of the Anti-unfair Competition Law.

In case of any of the following circumstances, it may be ascertained that the related information is not unknown to the public:

(1)

It is the common sense or industrial practice as known by people in the related technical or economic field;

(2)

It only involves the simple combination of dimensions, structures, materials and components of products, and can be directly obtained
by observing the products by the public concerned after the products enter into the market;

(3)

It has been publicly revealed on any publication or any other mass medium;

(4)

It has been publicized by reports or exhibits;

(5)

It can be obtained through other public channels; or

(6)

It can be easily obtained with no price.

Article 10

In case the related information has practical or potential commercial value, and can be used for enhancing the competitive advantage
for the obligee, it shall be ascertained as capable of bringing about benefits to the obligee, and having practical applicability
as stipulated in Paragraph 3 of Article 10 of the Anti-unfair Competition Law.

Article 11

If the obligee takes proper protection measures that is suitable for the commercial value or any other specific circumstance for
the purpose of avoiding information divulgence, it shall be deemed as confidentiality measures as stipulated in Paragraph 3 of Article
10 of the Anti-unfair Competition Law.

The people’s court shall ascertain whether the obligee has taken confidentiality measures in accordance with the features of the related
information carrier, the willingness for keeping secret of the obligee, the identifiability degree of the confidentiality measures,
the difficulty for others to obtain it by justifiable methods and other elements.

In case of any of the following normal circumstances that is sufficient to prevent the divulge of any classified information, it shall
be ascertained that the obligee has taken the confidentiality measures:

(1)

To limit the access scope of the classified information, and the contents shall only be notified to related personnel that must be
aware of the information;

(2)

To take such preventive measures as locking the carrier of the classified information up;

(3)

To tag a confidentiality sign on the carrier of classified information;

(4)

To adopt passwords or codes on the classified information;

(5)

To conclude a confidentiality agreement;

(6)

To limit visitors to the classified machinery, factory, workshop or any other place or bring forward any confidentiality request;
or

(7)

Any other reasonable measure for guaranteeing the confidentiality of information.

Article 12

As regards obtaining business secrets through development and research by itself or reverse engineering, it shall not be ascertained
as an infringement upon business secrets as stipulated in Subparagraphs (1) and (2) of Article 10 of the Anti-unfair Competition
Law.

Reverse engineering referred to in the preceding paragraph means to obtain the related technical information on the products in technical
methods by way of disassembling, mapping or analyzing the products gotten from public channels. Any party concerned that knows the
business secrets of someone else by unjustifiable methods and then claims its acquisition as lawful in excuse of reverse engineering
shall not be supported.

Article 13

The name list of clients among business secrets generally refers to the special client information that is different from related
public information, including the name, address, contact information, business habits, intent, and contents of the clients and comprise
the name roll of clients that collects lots of customers as well as the specific customers that have kept a long-term and stable
transaction relationship.

In case a client develops market transactions with the entity due to relying on an employee thereof, after this employee leaves his
post, if it can be proved that this client voluntarily chooses to perform market transactions with the said employee or the new entity
he works for, it shall be ascertained that no unfair methods has been adopted, except it is otherwise stipulated between this employee
and the former entity.

Article 14

As regards any party concerned that claims that someone else has infringed upon its business secret, it shall be responsible for
providing proof to verify that its business secret satisfies the statutory requirements, the information of the other party concerned
is identical or substantially identical with its business secret, and the other party concerned has adopted unfair methods. Among
others, the evidence for proving that its business secret satisfies the statutory requirements shall comprise the carrier, specific
contents, and commercial value of this business secret as well as the specific confidentiality measures taken for this business secret.

Article 15

If the licensee of the license contract for sole use of the business secret raises an action as regards infringement upon any business
secret, it shall be accepted by the people’s court in accordance with related laws.

If the licensee of the license contract for exclusive use, jointly with the obligee, raises an action, or the licensee raises an action
independently under the circumstance that the obligee may not do so, it shall be accepted by the people’s court in accordance with
the related laws.

If the licensee of the license contract for common use, jointly with the obligee, raises an action, or the licensee raises an action
independently upon authorization of the obligee in written form, it shall be accepted by the people’s court in accordance with the
related laws.

Article 16

When the people’s court make an adjudication of the civil liability to stop the infringement on any business secret, the time for
stopping the infringement shall generally be prolonged to the time when this business secret has been aware of by the general public.

In case the time for stopping the infringement arbitrated in accordance with the preceding paragraph is clearly unacceptable, if it
is under the circumstance that the competitive advantage of the obligee to this business secret is protected, the infringer may be
ordered to stop using this business secret within a certain period or scope.

Article 17

As regards determining the damages for the acts infringing on business secrets as stipulated in Article 10 of the Anti-unfair Competition
Law, it may be performed with reference to the methods of determining damages for patent infringements, and as regards determining
the damages for the unfair competition acts as stipulated in Article 5 , 9 or 14 of the Anti-unfair Competition Law, it may be performed
with reference to the methods of determining damages for infringing upon registered trademark rights.

If any business secret has been aware of by the general public due to any tort, the damages shall be determined subject to the commercial
value of this business secret. The commercial value of this business secret shall be ascertained in light of such elements as the
research and development costs, the income from implementing this business secret, possible benefits, and the time for maintaining
the competitive advantage, and etc..

Article 18

The power to adjudicate the civil cases of the first instance concerning the unfair competition as stipulated in Article 5 , 9, 10
or 14 of the Anti-unfair Competition Law shall generally remain with the intermediate people’s court.

Each higher people’s court may determine some grass-roots people’s courts to accept the civil cases of the first instance concerning
unfair competition in accordance with the actual situation of its jurisdiction and upon approval of the Supreme People’s Court, and
those grass-roots people’s courts that have been approved to hear civil cases regarding intellectual property may continue the acceptance
of cases concerning unfair competition.

Article 19

The present Interpretation shall enter into force as of February 1, 2007.

 
The Supreme People’s Court
2007-01-12

 




CIRCULAR OF THE MINISTRY OF FINANCE, STATE DEVELOPMENT AND REFORM COMMISSION, GENERAL ADMINISTRATION OF CUSTOMS AND STATE ADMINISTRATION OF TAXATION ON IMPORT TAXATION POLICIES TO IMPLEMENT THE OPINIONS OF THE STATE COUNCIL OF INVIGORATING EQUIPMENT MANUFACTURING

Circular of the Ministry of Finance, State Development and Reform Commission, General Administration of Customs and State Administration
of Taxation on Import Taxation Policies to Implement the Opinions of the State Council of Invigorating Equipment Manufacturing

Cai Guan Shui [2007] No. 11

The competent departments of finance, development and reform (planning), economy and trade, and taxation at various levels in all
provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state
plan, the finance bureau and development and reform committee of Xinjiang Production and Construction Corps, Guangdong Sub-Administration
of China Customs and the customs offices directly affiliated to the General Administration of Customs, the offices of financial inspection
commissioners in all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically
designated in the state plan:

For the purpose of raising core competitiveness and capacity for independent innovation of domestic enterprises, promoting the development
of equipment manufacturing and implementing the preferential policies of import taxation to invigorate the equipment manufacturing,
it is hereby notified:

I.

In the key equipment manufacturing areas which have been ascribed by the State Council to be effective in promoting the sustainable
development of national economy and stimulating for industrial restructuring, upgrading and enterprise innovation (see Appendix I),
the Ministry of Finance will formulate special import taxation policies together with State Development and Reform Commission, General
Administration of Customs and State Administration of Taxation and refund the previously levied import tariffs and value-added taxes
for the key parts and accessories imported for development and manufacturing of these equipment, and raw materials which cannot be
produced domestically. The refunded money will be generally used as national investment to the research and development of new products
and the cultivation of capacity for independent innovation.

II.

With the detailed knowledge of development, manufacturing, supply and demand at home and abroad, as well as the domestic production
of key parts and accessories and raw materials of various key technological equipment, Ministry of Finance will, together with State
Development and Reform Commission, General Administration of Customs and State Administration of Taxation, formulate special import
taxation policies with respect to the key areas of equipment manufacturing, including the specifications and requirements of various
key equipment, the scope of the key parts and accessories which have to be imported for equipment manufacturing and of the raw materials
which cannot be produced domestically, as well as the disposition of refunded tax. The special import taxation policies for the aforementioned
areas will be implemented after the Ministry of Finance discusses with the departments concerned.

III.

As of the announcement of special import taxation policies, the manufacturing enterprises of relevant key technological equipment,
should they need to import the key parts and accessories and raw materials within the scope of the import taxation policy, may file
the application of enjoying the preferential policy to the Ministry of Finance through the provincial government or the provincial
department of finance; enterprises under the central government may file the application directly to the Ministry of Finance (see
the Appendix II for the document of application).

IV.

The Ministry of Finance will examine the documents submitted by the enterprises for tax refund and will invite State Development and
Reform Commission and so on to assess the specifications of technological equipment developed and manufactured by the applying enterprises
and see whether they are in consistent with the policy. The Ministry of Finance shall give a response to the applying enterprises
within 40 days after they receive the application. A confirmation will be issued by the Ministry of Finance to the enterprises which
are confirmed to have met the conditions of tax refund and the time limit will be specified for the refunded tax to be used as national
capital.

V.

The manufacturing enterprises of relevant key technological equipment shall make separate customs declaration for goods listed on
the catalogue which enjoy special import taxation policies. Those which have obtained the confirmation of tax refund issued by the
Ministry of Finance shall go through the procedures for the refund in the local customs with it. The specific procedures shall be
in line with the Circular of the Ministry of Finance, State Economy and Trade Commission, State Administration of Taxation and General
Administration of Customs on Rebating Some of the Imported Goods ([1994] No.42).

VI.

The enterprises shall, after they receive the refund, transfer the refunded money to national capital within time limits, differentiating
the situations as follows:

1.

Enterprises exclusively funded by the state shall take the refund as the registered capital;

2.

Other enterprises shall transfer it to the national capital in ways as follows: incorporated enterprises with state-owned shares shall
have them hold the shares transferred from the newly-added national capital (if more than one state owners exist, the proportion
of shares held shall be decided by themselves); those without state-owned shares shall have the state-owned assets operation company
authorized the local governments at various levels hold those shares.

3.

The listed companies shall act in accordance with the regulations of private placement issued by China Securities Regulatory Commission.

VII.

The offices of financial inspection commissioners across the country shall supervise and examine the progress of the transfer from
refund to national capital. After the transfer, the enterprises shall submit the duplicate of accounting voucher to the Ministry
of Finance as well as the local office of financial inspection commissioners, and do the registration of ownership of state-owned
assets. If enterprises fail to make the transfer within the time limits, the refund shall be timely returned to the national treasury.
Should any enterprises violate the aforementioned regulations, they will be punished in accordance with Measures for Punishment of
Illegal Financial Activities (Decree No. 427 of the State Council).

VIII.

At the end of every year that a preferential policy of import taxation has been implemented, the Ministry of Finance will, together
with State Development and Reform Commission and General Administration of Customs and State Administration of Taxation, adjust the
catalogue of refunded goods for next year’s special import taxation policies according the general situation of application of enterprises
and policy implementation.

IX.

For the key technological equipment whose imported parts and accessories and raw materials have been refunded, the import tariff exemption
policy for the complement plant and set of equipment shall be repealed after the examination and confirmation of Ministry of Finance,
State Development and Reform Commission, General Administration of Customs and State Administration of Taxation; for some of the
complete plants, the Ministry of Finance and State Development and Reform Commission will, on the basis of strict examination, adopt
the transition measures of reducing the refunds or tightening the scope of tariff exemption according to the supply and demand of
related industries, continue to grant the import taxation privilege for a certain period; after the transition period the import
tariff exemption policy shall be repealed.

Appendix:

1.

The 16 Key Areas of Technological Equipment

2.

The Application Document for Tax Refund

Ministry of Finance

State Development and Reform Commission

General Administration of Customs

State Administration of Taxation

January 14, 2007
Appendix I:
The 16 Key Areas of Technological Equipment

1.

Large sized clean and high-efficiency power equipment: new energy generating equipment such as nuclear power generating plant of a
million Km/h, supercritical thermal power generating plant, gas-steam circulation power generating plant, large sized circulation
fluidized bed boiler, large sized hydro-power generating plant and pumped storage power station, large sized direct air-cooled generating
plant and high-power wind power generator.

2.

UHV Transmission Equipment: complete equipment of UHV transmission with alternating current of 1000000 volts and direct current of
￿￿00000 volts, and key transmission equipment with alternating current of 500000 volts and direct current of 750000 volts.

3.

Large sized petrochemical equipment: large sized plant of petrochemical equipment of million-ton-level and complete equipment of Px,
PTA and polyester.

4.

Complete plant of coal chemical equipment.

5.

Complete plant of cold and hot continuous sheet rolling and that of surface coating and plating.

6.

Large sized plant of underground coal mining, elevating and washing and that of opencast mining.

7.

Large sized plant of ship and ocean engineering: large sized equipment of ocean petroleum engineering, large sized high-tech and high
added value ships such as ore and crude oil carrier of 300000 tons, floating production storage and offloading vessels, container
carriers with more than 1000 containers, liquefied natural gas carriers and high-power diesel engines.

8.

Equipment of railway transport: express trains at the speed of 200km/h plus and new subway trains.

9.

Large sized equipment of environmental protection and integrated utilization of resources: large sized equipment of environmental
protection such as equipment of air and urban pollution control and industrial sewage treatment and that of solid waste disposal,
and equipment of integrated utilization of resources such as seawater desalination and scrap car salvage.

10.

Large sized construction plant: tunnel boring machines, etc.

11.

Key project automation control system and key testing precision instruments.

12.

Large sized, precision and high-speed numerical control equipment, numerical systems and functional units

13.

New textile machines: complete polyester staple fibre plant with daily output of 200 tons plus, high-speed adhesive filament continuous
spinning machine, modern complete plant of cotton spinning, electromechanically integrated rapier loom and air jet loom.

14.

New and high-powered agricultural plant: high-powered tractor, head-feed rice combine, corn combine and cotton picker.

15.

Key equipment of integrated circuit, new flat panel display manufacturing machine, electronic components and elements, lead-free complete
plant, digital medical imaging equipment and specialized equipment of bio-engineering and medical production.

16.

Civil aircraft, engine and other airborne equipment.

Appendix II:
The Application Document for Tax Refund

I.

The nature, shareholding structure, registered capital and business scope of the applying enterprise;

II.

The financial status of the applying enterprise

III.

The progress of development and manufacturing and key technological equipment and the production plan of the applying enterprise,
including the name and specifications of the key technological equipment which applies for tax refund;

IV.

The variety, quantity, import time and value of the key parts and accessories and raw materials which will be under the preferential
policy of import taxation, as well as the estimated amount of import tariff that will be paid.

V.

The specific plan of transferring the refunded money to national capital, which shall be approved by the organs of power of the enterprise,
either the general manager’s meeting for the enterprises solely funded by the state or the meeting of stakeholders for incorporated
enterprises. It shall include the stakeholders, the price of the potential shares, and the specific time of the transfer. The listed
corporations shall offer the letter of commitment to the effect that the aforementioned plan has been submitted to the meeting of
stakeholder for deliberation. Those without state-owned shares shall submit the letter of intention of equity participation signed
with the state-owned asset operation companies authorized by governments at various levels.



 
Ministry of Finance, State Development and Reform Commission, General Administration of Customs, State Administration
of Taxation
2007-01-14

 







CONSTITUTION ACT, 1982 – page 22

NOTES (1) The enacting clause was repealed by the Statute Law Revision Act, 1893, 56-57 Vict., c. 14 (U.K.). It read as...