Provisions of Pudong New Area of Shanghai Municipality on the Establishment of A High-level Protection System for Intellectual Property

(October 28, 2021)

No. 89

(Adopted at the 36th Session of the Standing Committee of the 15th Shanghai Municipal People's Congress on October 28, 2021)

Article 1

With a view to implementing the requirements of establishing a high-level protection system for intellectual property in Pudong New Area, strengthening the whole chain of intellectual property protection, pioneering the establishment of an international highland of intellectual property protection with a complete and sound system and favorable environment, these Provisions are formulated according to the basic principles of laws and administrative rules, and in light of the actual circumstances of Pudong New Area.

Article 2

Pudong New Area People's Government shall strengthen the leadership of intellectual property protection, coordinate and facilitate major matters in intellectual property protection, integrate and optimize the resources of IP protection, improve the establishment of the systems and mechanisms and comprehensive service platforms for IP unified management, advance the comprehensive law enforcement in the field of intellectual property, and strengthen education, publicity and fund guarantee for intellectual property protection.

The intellectual property department of Pudong New Area shall take the responsibility in coordinating, organizing and implementing intellectual property protection, carry out in Pudong New Area the comprehensive acceptance of the related businesses involving the national intellectual property department, cooperate with the national intellectual property department in carrying out the administrative law enforcement of integrated circuits layout-design in accordance with the functions and powers or comprehensive administrative enforcement power entrusted by the relevant department in the field of intellectual property.

The Intellectual Property Protection Center of Pudong New Area shall establish and improve a “one-stop” protection mechanism for IP affairs, be aligned with the national intellectual property protection platform, and promote the Integrated Online Platform of national intellectual property affairs in Pudong New Area, and may, relying on the Integrated Online Administration platform, assist in carrying out the relevant administrative law enforcement work prescribed in the preceding Paragraph.

Article 3

The intellectual property department of Pudong New Area shall, according to the provisions of the national intellectual property department, provide pretrial services for patent applications to be submitted for expedited examination in the fields of bio-medicine, high-end equipment manufacturing and a new generation of information technology.

The intellectual property department of Pudong New Area shall cooperate with the national intellectual property department in developing such quick rights confirmation services as priority examination of patent reexamination and invalidation cases and remote video hearing of patent invalidation cases, and promote the joint trials on patent rights confirmation cases and administrative adjudication cases.

Article 4

Where any unit or individual, before exploiting a patent or entering a foreign market, or planning to be listed on the market, entrusts a professional institution to investigate the exploitation of a patent on whether a product or technology infringes the patent right of another person and obtains a report on patent exploitation, the said report may serve as a reference basis for judging the intentional infringement.

Article 5

In the administrative law enforcement procedure for copyright infringement involving the public interest, if the respondent claims non-liability for the infringement, the evidence shall be provided to prove that he/she has obtained the permission of the right holder, or that the copyright can be used without the permission of the right holder as prescribed by law. Where the respondent is unable to provide the evidence or the provided evidence is insufficient to overturn the evidence of infringement provided by the complainant, the act of the respondent may be deemed to constitute copyright infringement.

Article 6

Where any unit or individual maliciously applies for trademark registration, the applicant shall be given a warning and, if there are any illegal gains therefrom, a fine of five times the illegal gains but not more than 50,000 yuan may be imposed. If there are no illegal gains therefrom, a fine of not more than 30,000 yuan may be imposed.

Article 7

Any unit or individual shall be prohibited from committing any of the following acts that violate the provisions on the protection of geographical indications:

misleading the public by using the name or description of a product with a geographical indication that the said product comes from a geographical origin under protection ;

2. using the name, or its liberal translation, transliteration or literal translation of the product that obtains the protected geographical indication for the same or similar product other than the said production origin, or using expressions such as “category”, “type”, “style” or “imitation” at the same time for the said product;

3. using special geographical indications on products without approval;

4. using marks similar to those used for special geographical indications on products, causing the public to mistake them for special geographical indications; or

5. selling the aforesaid products.

Whoever violates the provisions of the preceding Paragraph shall be ordered to stop the illegal act immediately, and the products illegally produced or sold and the tools for forging special geographical indications shall be confiscated and destroyed; if the amount of illegal business revenue therefrom is not less than 50,000 yuan, a fine of not more than five times the amount of the illegal business revenue may be imposed; if there is no illegal business revenue, or the amount of illegal business revenue is difficult to calculate or is less than 50,000 yuan, a fine of not more than 250,000 yuan may be imposed. Where anyone who sells the product without knowing the violation of the provisions of the preceding Paragraph and proves that the said product is lawfully obtained with the specific supplier, he/she shall be ordered to stop the sale.

Article 8

In the procedure of administrative law enforcement concerning trade secrets, if the right holder of a trade secret provides preliminary evidence that he/she has already taken security measures for the trade secret claimed thereby, and reasonably indicates that the said secret is infringed, the suspected infringer shall prove that what the right holder claimed does not belong to a trade secret or that there is no act infringing upon the trade secret.

The infringement on trade secrets shall be handled according to the provisions of the Law of the People’s Republic of China on Anti-Unfair Competition, and the infringer shall also be ordered to return or destroy the drawings, software or other relevant carriers containing trade secrets, and shall not continue to disclose, use or allow others to use the trade secrets. Where the products produced by the infringer with the holder’s trade secret have not yet been sold, the infringer shall be supervised to conduct destruction thereof, except where the right holder agrees to purchase them or approves the infringer to continue the sale of the products.

Where the right holder requests the people's court to return or destroy the drawings, software or other relevant carriers containing the trade secret, and to remove the trade secret under its control, the people’s court shall support it .

Article 9

An organizer of exhibition activities shall not allow the exhibitors to participate in the exhibition without submitting the compliance commitment of intellectual property rights or relevant proof of intellectual property rights ownership.

If an exhibition item is complained of infringement by the right holder, the exhibition organizer shall immediately require the exhibitor to provide proof of non-infringement within a limited time; if the exhibitor is unable to provide it, the organizer shall immediately take measures such as covering up the exhibits, removing the exhibits from the shelves or canceling the qualification of participation.

Where an exhibition organizer violates the provisions of the Paragraph 1 or 2 of this Article, it shall be given a warning and may be imposed a fine of not less than 30,000 yuan but not more than 100,000 yuan.

Article 10

Where an intellectual property right has been intentionally infringed, and the circumstances are serious, the people's court may, according to relevant provisions, and on the basis of the actual losses suffered by the right holder from the infringement, the benefits gained by the infringer from the infringement, the royalty of the license or the royalty of the right usage, determine the amount of not less than one time but not more than five times for compensation.

If the circumstances are especially serious, the people’s court may determine the amount of compensation of not less than five times but not more than ten times the actual losses suffered by the right holder from the infringement, the royalty of the license or the royalty of the right usage. Where it is difficult to calculate the actual losses of the right holder, or the royalty of the license or the royalty of the right usage gained by the infringer from the infringement, the people’s court shall, in light of the circumstances of the infringement, adjudicate on a compensation of not more than 10 million yuan.

Where, after the judicial judgment or administrative ruling on a patent infringement dispute becomes effective, the same patent right is infringed again, the illegal income shall be confiscated and a fine of not less than one time but not more than five times the amount of the illegal business revenue shall be imposed; where there is no illegal business revenue, or the illegal business revenue is difficult to calculate or is less than 50,000 yuan, a fine of not less than 50,000 yuan but not more than 250,000 yuan shall be imposed.

Where a person is subjected to a judicial judgment or administrative penalty for infringing on trade secrets and infringes upon trade secrets again within two years from the date of the judicial judgment or administrative penalty decision taking effect, the infringer may be given a heavier punishment.

Article 11

Before or after an intellectual property dispute is placed on file, the intellectual property department of Pudong New Area may conduct mediation by itself, or entrust or transfer the mediation to relevant organizations, except for cases involving suspected crimes.

An administrative case concerning intellectual property may not be placed on file if a mediation agreement has been reached and fulfilled completely before the filing. If a mediation agreement is reached and fulfilled completely after the case is placed on file, a lighter or mitigated punishment may be imposed; if the legal rights and interests of the third party and the public interests are not damaged, the party may be exempted from punishment.

Article 12

Pudong New Area People's Court shall specify the relevant judicial organization to uniformly hear civil, administrative and criminal cases concerning intellectual property within its jurisdiction.

Persons with specialized knowledge in such units as institutions of higher learning, scientific research institutions, and intellectual property service institutions may, upon selection, serve as expert jurors in intellectual property cases.

Pudong New Area People's Court shall be supported to explore the mode of prior written statement of claim in handling intellectual property cases.

Article 13

Pudong New Area People's Procuratorate shall specify the relevant procuratorial case-handling department to uniformly perform the procuratorial functions of criminal, civil, administrative and public interest litigation concerning intellectual property.

Pudong New Area People’s Procuratorate shall be supported to explore public interest litigation in the fields of geographical indications, collective trademarks, drug patents and other intellectual property rights involving public interests.

Article 14

Pudong New Area shall be supported to set up intellectual property service stations for companies planning to be listed on the Science and Technology Innovation Board, and provide IP counseling, IP evaluation and other services for companies planning to go public across the country in accordance with the law.

Article 15

Financial institutions shall be encouraged to optimize the financing mode of intellectual property pledge, establish the risk sharing mechanism of financing guarantee, and increase the credit enhancement services for small and medium-sized enterprises, technological innovation-based enterprises and cultural and creative enterprises.

Enterprises shall be encouraged to build the underlying intellectual property assets based on the combination of high-value intellectual property, and to explore the mode of intellectual property securitization on the premise of generating stable cash flow.

Article 16

These Provisions shall be effective as of December 1, 2021.