PRC BEEFS UP IPR PROTEC-TION IN FOREIGN TRADE

05/01/2004

---

Mainland China recently promulgated amend-ments to its Foreign Trade Law, which will take effect on 1 July 2004. The amendments include the addition of a new Chapter 5 on the protection of intellectual property rights, as summarized below:

The State shall protect intellectual property rights related to foreign trade in accordance with IPR-related legislation and administra-tive regulations. (Article 29)

If imported goods infringe intellectual prop-erty rights and threaten the orderly conduct of foreign trade, the agency of the State Council responsible for the administration of foreign trade i.e. the Ministry of Commerce, MOF-COM may undertake measures such as pro-hibiting for a certain period of time the im-portation of relevant goods manufactured or sold by the infringer.

If an IP rights holder bars a licensee from challenging the validity of IP rights that are the subject of a licensing agreement, imposes coercive package licensing, or imposes ex-clusive grant-back conditions in a licensing agreement, such as to hinder fair competition in foreign trade, MOFCOM may undertake all necessary measures to remove the hindrance. (Article 30)

If another jurisdiction does not offer national treatment in protection of intellectual property rights to Chinese individuals or entities, or if it is unable to provide full and effective IPR protection with respect to goods, technology, or services originating in China, MOFCOM may undertake all necessary measures with respect to trade with that jurisdiction in ac-cordance with the relevant laws, regulations, treaties or international agreements. (Article 31)

In addition to the above chapter, Article 37 em-powers MOFCOM to conduct investigations regarding the matters referred to in Articles 29, 30 or 31, alone or in consultation with other relevant agencies of the State Council, in order to maintain the orderly conduct of foreign trade.