Identifier
Created
Classification
Origin
06GUANGZHOU14710
2006-05-17 00:10:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Guangzhou
Cable title:
Guangdong IPR: Enforcement Efforts in 2005
how-toVZCZCXYZ0033 RR RUEHWEB DE RUEHGZ #4710/01 1370010 ZNR UUUUU ZZH R 170010Z MAY 06 FM AMCONSUL GUANGZHOU TO RUEHC/SECSTATE WASHDC 8026 INFO RUEHOO/CHINA POSTS COLLECTIVE RUCPDOC/USDOC WASHDC RUEAIIA/CIA WASHDC RUEKJCS/DIA WASHDC RHHMUNA/HQ USPACOM HONOLULU HI
UNCLAS GUANGZHOU 014710
SIPDIS
USDOC FOR 4420/ITA/MAC/MCQUEEN, DAS LEVINE
STATE FOR EB/TPP MASSINGA, FELSING
STATE PASS COPYRIGHT FOR TEPP
STATE PASS USPTO FOR DUDAS, BROWNING, BOLAND, ANTHONY, NESS
STATE PASS USTR FOR MENDENHALL, MCCOY, ESPINEL, CELICO
USDOJ FOR SUSSMAN
DHS/CPP FOR PIZZECK
USPACOM FOR FPA
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: KIPR KJUS KCRM ECON ETRD WTRO CH
SUBJECT: Guangdong IPR: Enforcement Efforts in 2005
REF: A) Guangzhou 13563; B) 05 Guangzhou 23057
(U) This document is sensitive but unclassified. Please
protect accordingly.
UNCLAS GUANGZHOU 014710
SIPDIS
USDOC FOR 4420/ITA/MAC/MCQUEEN, DAS LEVINE
STATE FOR EB/TPP MASSINGA, FELSING
STATE PASS COPYRIGHT FOR TEPP
STATE PASS USPTO FOR DUDAS, BROWNING, BOLAND, ANTHONY, NESS
STATE PASS USTR FOR MENDENHALL, MCCOY, ESPINEL, CELICO
USDOJ FOR SUSSMAN
DHS/CPP FOR PIZZECK
USPACOM FOR FPA
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: KIPR KJUS KCRM ECON ETRD WTRO CH
SUBJECT: Guangdong IPR: Enforcement Efforts in 2005
REF: A) Guangzhou 13563; B) 05 Guangzhou 23057
(U) This document is sensitive but unclassified. Please
protect accordingly.
1. (U) Summary: Guangdong officials praised their
intellectual property rights (IPR) enforcement efforts and
highlighted Guangdong enterprises' IP creation in the annual
white paper on IPR enforcement and development. Guangdong
courts concluded 94 IPR-related criminal cases in 2005,
involving 232 individuals. The courts also completed 3,316
IPR-related civil cases, up 83 percent from 2004. The
province has designated eight local courts to handle IPR
cases, more than any other province. According to the
report, all provincial offices and large municipal offices
are now using legal software, while smaller cities will
complete the transition by the end of 2006. End Summary.
2. (U) Econoff attended an April 20 press conference hosted
by Guangdong IP agencies to publicize the province's 2006
white paper on IPR protection and development. Post has
reported separately on Guangzhou's IPR white paper (ref A)
and will report on Shenzhen's when it is released.
Focus on Foods, Electronics, and Trade Fairs
--------------
3. (U) Guangdong's white paper describes Guangdong IPR
enforcement efforts from September 2004 to the end of 2005
as a "special campaign" guided by the Guangdong IPR Working
Group. During this period, officials targeted counterfeit
food and drugs, electronics, and household appliances.
Optical discs were cited as a key product throughout the
report, particularly compressed DVDs because of their high
storage volume. Priority venues for enforcement included
wholesale markets, supermarkets, and trade fairs. The
report listed Guangzhou, Shenzhen, Foshan, and Dongguan as
priority regions. The Public Security Bureau (PSB)'s
Mountain Eagle campaign, which lasted from November 2004
through November 2005, was directed at protecting well-known
trademarks of products that are closely related to people's
daily life or health (ref B). Guangdong officials have
since announced the extension of the Mountain Eagle campaign
through the end of 2006.
Criminal Cases and PSB Investigations
--------------
4. (U) According to the white paper, Guangdong courts
concluded 94 criminal cases in 2005, involving 232
individuals. Guangdong public security offices investigated
426 criminal IPR cases in 2005, solving 331 and arresting
1,207 suspects. Approximately one-third of these cases were
trademark cases generated by the Mountain Eagle campaign.
The report highlighted cases involving Viagra, Hennessy, and
a Jieyang VCD production line in which 12 suspects were
arrested. The PSB seized a total of 15 CD production lines
in 2005.
Case Transfers
--------------
5. (U) Guangdong AIC offices transferred 17 cases to the PSB
in 2005, which involved 17 suspects. Some of these cases
included counterfeit products of Nike, Adidas, and Coach.
According to the report, Guangdong Copyright offices
transferred 51 IPR-related cases to the PSB for criminal
prosecution in 2005, involving 57 suspects. A June 2005
campaign against A/V products in Guangzhou accounted for
nine of these case transfers, as well as the closure of 67
warehouses, eight wholesale locations, and 29 transport
centers.
Civil Cases
--------------
6. (U) Guangdong courts concluded 3,316 IPR-related civil
cases in 2005, up 83 percent from 2004. The report boasts
that 45 percent of IPR cases in Guangdong courts were
settled by mediation, including 58 percent of cases in the
Shenzhen Intermediate Court.
7. (U) Guangdong has designated eight local courts (courts
of first instance) -- more than any other province -- to
handle IPR cases in an effort to alleviate the workload of
intermediate courts. The report states that these courts,
two of which are located in Guangzhou and Shenzhen,
concluded 286 IPR-related cases in 2005.
Software Legalization
--------------
8. (U) The report states that by the end of 2005 all
municipal governments in Guangdong had "basically finished
the work of software legalization." At the press
conference, an IPO official clarified that all provincial
offices and large municipal offices are now using legal
software. Smaller cities, as well as county- and district-
level offices, will complete the transition by the end of
2006.
Customs
--------------
9. (U) Guangdong Customs officials seized 521 cases in 2005,
up 11 percent from 2004. 516 of these cases were exports
and 508 involved trademarks. In export enforcement,
Guangdong Customs targeted trademark counterfeiting and CD
piracy. Sixteen of the Customs cases involved large-scale
CD counterfeiting. Foreign brands protected include Nike,
Pfizer, Motorola, Disney, Philips, Canon, and Citizen.
Guangdong and Hong Kong customs authorities also conducted
nine joint enforcement actions in border cities.
Trade Fairs
--------------
10. (U) The two sessions of the Canton Trade Fair in 2005
saw 375 patent infringement cases, 462 trademark cases, and
45 copyright cases, according to the report. The April 2006
Canton Trade Fair saw 322 patent infringement cases, 139
trademark cases, and 11 copyright cases, according to a
trade fair representative. (Note: According to a contact,
the trade fair's method of recording complaints changed in
2006. Previously, authorities recorded only one complaint
even if exhibitors infringed on multiple patents,
trademarks, or copyrights. Currently, each infringement is
calculated as one complaint. End note)
11. (U) The Guangdong white paper highlighted the following
trade fairs as the most important in the province. All of
them include IPR complaint offices staffed by enforcement
authorities (typically the Intellectual Property Office
[IPO] or the Administration of Industry and Commerce [AIC]).
(Note: Draft trade fair regulations would require an IPR
complaint desk to be onsite during fairs of three or more
days. End note).
Canton Trade Fair (Guangzhou)
China Int'l Toys and Gifts Fair (Guangzhou)
Guangdong Int'l Beauty, Hairdressing, and Cosmetics Expo
(Guangzhou)
China Small and Medium-Size Enterprise Fair (Guangzhou)
China Int'l Expo of A/V Industry Fair (Guangzhou)
South China Book Festival (Guangzhou)
Guangzhou Int'l Civil Engineering Expo (Guangzhou)
China Int'l High-Tech Fair (Shenzhen)
China Pottery Expo (Foshan)
Textile, clothing, and furniture fairs (Dongguan)
Patent and Trademark Applications
--------------
12. (U) The white paper states that Guangdong had the most
patent applications and grants of any province in China in
2005 for the 11th consecutive year. Patents applications
were up 38 percent in 2005, totaling 72,220, accounting for
19 percent of the national total. Guangdong saw 102,998
trademark applications in 2005 -- again the highest in China
for the 11th consecutive year.
13. (U) Guangdong enterprises received 20 "China Well-Known
Trademarks" in 2005, and currently have a total of 56 --
ranking second nationwide. Seventy-three Guangdong
enterprises received the title "China Famous Brand",
bringing the total to 165. This bring Guangdong's share to
17.8 percent of China's total, ranking Guangdong first
nationwide for five consecutive years. (Note: This jump in
well-known trademarks is part of a Chinese campaign to
promote branding. End note).
14. (U) Eight Guangdong products, including Liusha pearls,
Qindou mangoes, and Yugonglou pineapples, were given
geographic indicator trademarks. This brings the total to
14, ranking fourth nationwide.
Public Education
--------------
15. (U) The report also highlights three universities and
one institute in Guangzhou which have set up IPR schools:
Jinan University, Zhongshan University, South China
University of Technology and Guangdong University of
Finance. The report also mentions ongoing training and
joint actions with Hong Kong IPR authorities, including an
"expert group on IPR protection", a program on small and
medium-size enterprise development, the "No Fakes" campaign
for retail businesses, and a cooperative mechanism for
handling cross-border IPR cases. The most significant IPR-
related event in Guangdong was a three-day seminar on IP
education in China jointly hosted by the World IP
Organization (WIPO) and the Guangdong IPO, though China has
not yet signed on to the WIPO treaties.
16. (U) The report emphasizes the importance of public
education through commercial media, and lists the following
media channels that were used in 2005 (sponsoring office is
listed in parentheses):
Advertisements on Guangdong TV (Guangdong IPO)
Documentaries on CCTV and Guangdong TV (Guangdong PSB)
A five-episode TV series on Shenzhen television (Shenzhen
IPO)
Advertisements on trademark protection on Dongguan
television (Dongguan AIC)
IPR publicity in the Nanfang Daily (one of Guangdong's
largest newspapers) (Guangdong IPO and AIC)
Comment
--------------
17. (SBU) The Guangdong IPO press conference was largely a
ceremonial occasion, taken up mostly by an IPO official
reading from the white paper. Though the report is largely
a laudatory summary of enforcement actions, it does offer
specific examples of prominent cases, important trade fairs,
and types of media utilized in public education campaigns.
The report lacked detailed statistics, however, particularly
on criminal cases and transfers by type of infringement.
Post has since submitted a request to Guangdong authorities
for a breakdown of IPR-related criminal cases by code of law
for 2004 and 2005.
18. (SBU) Business contacts acknowledge that Guangdong is
doing more to crack down on piracy and counterfeiting.
However, virtually all of our contacts believe IPR
violations are increasing and product quality is much
better, making it more difficult to differentiate between
the original product and a high-quality fake. Of course,
large quantities of poor-quality fakes are still in the
markets in China, as well as exported.
ROCK
SIPDIS
USDOC FOR 4420/ITA/MAC/MCQUEEN, DAS LEVINE
STATE FOR EB/TPP MASSINGA, FELSING
STATE PASS COPYRIGHT FOR TEPP
STATE PASS USPTO FOR DUDAS, BROWNING, BOLAND, ANTHONY, NESS
STATE PASS USTR FOR MENDENHALL, MCCOY, ESPINEL, CELICO
USDOJ FOR SUSSMAN
DHS/CPP FOR PIZZECK
USPACOM FOR FPA
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: KIPR KJUS KCRM ECON ETRD WTRO CH
SUBJECT: Guangdong IPR: Enforcement Efforts in 2005
REF: A) Guangzhou 13563; B) 05 Guangzhou 23057
(U) This document is sensitive but unclassified. Please
protect accordingly.
1. (U) Summary: Guangdong officials praised their
intellectual property rights (IPR) enforcement efforts and
highlighted Guangdong enterprises' IP creation in the annual
white paper on IPR enforcement and development. Guangdong
courts concluded 94 IPR-related criminal cases in 2005,
involving 232 individuals. The courts also completed 3,316
IPR-related civil cases, up 83 percent from 2004. The
province has designated eight local courts to handle IPR
cases, more than any other province. According to the
report, all provincial offices and large municipal offices
are now using legal software, while smaller cities will
complete the transition by the end of 2006. End Summary.
2. (U) Econoff attended an April 20 press conference hosted
by Guangdong IP agencies to publicize the province's 2006
white paper on IPR protection and development. Post has
reported separately on Guangzhou's IPR white paper (ref A)
and will report on Shenzhen's when it is released.
Focus on Foods, Electronics, and Trade Fairs
--------------
3. (U) Guangdong's white paper describes Guangdong IPR
enforcement efforts from September 2004 to the end of 2005
as a "special campaign" guided by the Guangdong IPR Working
Group. During this period, officials targeted counterfeit
food and drugs, electronics, and household appliances.
Optical discs were cited as a key product throughout the
report, particularly compressed DVDs because of their high
storage volume. Priority venues for enforcement included
wholesale markets, supermarkets, and trade fairs. The
report listed Guangzhou, Shenzhen, Foshan, and Dongguan as
priority regions. The Public Security Bureau (PSB)'s
Mountain Eagle campaign, which lasted from November 2004
through November 2005, was directed at protecting well-known
trademarks of products that are closely related to people's
daily life or health (ref B). Guangdong officials have
since announced the extension of the Mountain Eagle campaign
through the end of 2006.
Criminal Cases and PSB Investigations
--------------
4. (U) According to the white paper, Guangdong courts
concluded 94 criminal cases in 2005, involving 232
individuals. Guangdong public security offices investigated
426 criminal IPR cases in 2005, solving 331 and arresting
1,207 suspects. Approximately one-third of these cases were
trademark cases generated by the Mountain Eagle campaign.
The report highlighted cases involving Viagra, Hennessy, and
a Jieyang VCD production line in which 12 suspects were
arrested. The PSB seized a total of 15 CD production lines
in 2005.
Case Transfers
--------------
5. (U) Guangdong AIC offices transferred 17 cases to the PSB
in 2005, which involved 17 suspects. Some of these cases
included counterfeit products of Nike, Adidas, and Coach.
According to the report, Guangdong Copyright offices
transferred 51 IPR-related cases to the PSB for criminal
prosecution in 2005, involving 57 suspects. A June 2005
campaign against A/V products in Guangzhou accounted for
nine of these case transfers, as well as the closure of 67
warehouses, eight wholesale locations, and 29 transport
centers.
Civil Cases
--------------
6. (U) Guangdong courts concluded 3,316 IPR-related civil
cases in 2005, up 83 percent from 2004. The report boasts
that 45 percent of IPR cases in Guangdong courts were
settled by mediation, including 58 percent of cases in the
Shenzhen Intermediate Court.
7. (U) Guangdong has designated eight local courts (courts
of first instance) -- more than any other province -- to
handle IPR cases in an effort to alleviate the workload of
intermediate courts. The report states that these courts,
two of which are located in Guangzhou and Shenzhen,
concluded 286 IPR-related cases in 2005.
Software Legalization
--------------
8. (U) The report states that by the end of 2005 all
municipal governments in Guangdong had "basically finished
the work of software legalization." At the press
conference, an IPO official clarified that all provincial
offices and large municipal offices are now using legal
software. Smaller cities, as well as county- and district-
level offices, will complete the transition by the end of
2006.
Customs
--------------
9. (U) Guangdong Customs officials seized 521 cases in 2005,
up 11 percent from 2004. 516 of these cases were exports
and 508 involved trademarks. In export enforcement,
Guangdong Customs targeted trademark counterfeiting and CD
piracy. Sixteen of the Customs cases involved large-scale
CD counterfeiting. Foreign brands protected include Nike,
Pfizer, Motorola, Disney, Philips, Canon, and Citizen.
Guangdong and Hong Kong customs authorities also conducted
nine joint enforcement actions in border cities.
Trade Fairs
--------------
10. (U) The two sessions of the Canton Trade Fair in 2005
saw 375 patent infringement cases, 462 trademark cases, and
45 copyright cases, according to the report. The April 2006
Canton Trade Fair saw 322 patent infringement cases, 139
trademark cases, and 11 copyright cases, according to a
trade fair representative. (Note: According to a contact,
the trade fair's method of recording complaints changed in
2006. Previously, authorities recorded only one complaint
even if exhibitors infringed on multiple patents,
trademarks, or copyrights. Currently, each infringement is
calculated as one complaint. End note)
11. (U) The Guangdong white paper highlighted the following
trade fairs as the most important in the province. All of
them include IPR complaint offices staffed by enforcement
authorities (typically the Intellectual Property Office
[IPO] or the Administration of Industry and Commerce [AIC]).
(Note: Draft trade fair regulations would require an IPR
complaint desk to be onsite during fairs of three or more
days. End note).
Canton Trade Fair (Guangzhou)
China Int'l Toys and Gifts Fair (Guangzhou)
Guangdong Int'l Beauty, Hairdressing, and Cosmetics Expo
(Guangzhou)
China Small and Medium-Size Enterprise Fair (Guangzhou)
China Int'l Expo of A/V Industry Fair (Guangzhou)
South China Book Festival (Guangzhou)
Guangzhou Int'l Civil Engineering Expo (Guangzhou)
China Int'l High-Tech Fair (Shenzhen)
China Pottery Expo (Foshan)
Textile, clothing, and furniture fairs (Dongguan)
Patent and Trademark Applications
--------------
12. (U) The white paper states that Guangdong had the most
patent applications and grants of any province in China in
2005 for the 11th consecutive year. Patents applications
were up 38 percent in 2005, totaling 72,220, accounting for
19 percent of the national total. Guangdong saw 102,998
trademark applications in 2005 -- again the highest in China
for the 11th consecutive year.
13. (U) Guangdong enterprises received 20 "China Well-Known
Trademarks" in 2005, and currently have a total of 56 --
ranking second nationwide. Seventy-three Guangdong
enterprises received the title "China Famous Brand",
bringing the total to 165. This bring Guangdong's share to
17.8 percent of China's total, ranking Guangdong first
nationwide for five consecutive years. (Note: This jump in
well-known trademarks is part of a Chinese campaign to
promote branding. End note).
14. (U) Eight Guangdong products, including Liusha pearls,
Qindou mangoes, and Yugonglou pineapples, were given
geographic indicator trademarks. This brings the total to
14, ranking fourth nationwide.
Public Education
--------------
15. (U) The report also highlights three universities and
one institute in Guangzhou which have set up IPR schools:
Jinan University, Zhongshan University, South China
University of Technology and Guangdong University of
Finance. The report also mentions ongoing training and
joint actions with Hong Kong IPR authorities, including an
"expert group on IPR protection", a program on small and
medium-size enterprise development, the "No Fakes" campaign
for retail businesses, and a cooperative mechanism for
handling cross-border IPR cases. The most significant IPR-
related event in Guangdong was a three-day seminar on IP
education in China jointly hosted by the World IP
Organization (WIPO) and the Guangdong IPO, though China has
not yet signed on to the WIPO treaties.
16. (U) The report emphasizes the importance of public
education through commercial media, and lists the following
media channels that were used in 2005 (sponsoring office is
listed in parentheses):
Advertisements on Guangdong TV (Guangdong IPO)
Documentaries on CCTV and Guangdong TV (Guangdong PSB)
A five-episode TV series on Shenzhen television (Shenzhen
IPO)
Advertisements on trademark protection on Dongguan
television (Dongguan AIC)
IPR publicity in the Nanfang Daily (one of Guangdong's
largest newspapers) (Guangdong IPO and AIC)
Comment
--------------
17. (SBU) The Guangdong IPO press conference was largely a
ceremonial occasion, taken up mostly by an IPO official
reading from the white paper. Though the report is largely
a laudatory summary of enforcement actions, it does offer
specific examples of prominent cases, important trade fairs,
and types of media utilized in public education campaigns.
The report lacked detailed statistics, however, particularly
on criminal cases and transfers by type of infringement.
Post has since submitted a request to Guangdong authorities
for a breakdown of IPR-related criminal cases by code of law
for 2004 and 2005.
18. (SBU) Business contacts acknowledge that Guangdong is
doing more to crack down on piracy and counterfeiting.
However, virtually all of our contacts believe IPR
violations are increasing and product quality is much
better, making it more difficult to differentiate between
the original product and a high-quality fake. Of course,
large quantities of poor-quality fakes are still in the
markets in China, as well as exported.
ROCK