Issued by the Supreme People's Court and the Supreme People's Procuratorate
Judicial Interpretation on Some Issues Concerning the Specific Application of Law in Handling Criminal Cases of Infringement of Intellectual Property Rights

On September 13, the Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Specific Application of Law in Handling Criminal Cases of Infringement of Intellectual Property Rights (III) was released and will come into force on September 14, 2020.

The introduction of the criminal judicial interpretation of intellectual property is an important measure taken by the Supreme People's Court and the Supreme People's Procuratorate to implement the decisions and arrangements of the CPC Central Committee, strengthen the criminal judicial protection of intellectual property, and actively respond to social concerns. The promulgation and implementation of judicial interpretation is of great significance for improving the legal system of intellectual property protection, unifying the standards of law application, standardizing the handling of criminal cases of infringement of intellectual property rights, and creating a good environment for innovation, rule of law and business.

Supreme People's Court Supreme People's Procuratorate
Interpretation on Several Issues Concerning the Specific Application of Law in Handling Criminal Cases of Infringement of Intellectual Property Rights (III)

The Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Specific Application of Law in Handling Criminal Cases of Infringement of Intellectual Property Rights (III), which was adopted at the 1811st meeting of the Judicial Committee of the Supreme People's Court on August 31, 2020 and the 48th meeting of the 13th Procuratorial Committee of the Supreme People's Procuratorate on August 21, 2020, is hereby promulgated, Effective from September 14, 2020.

Supreme People's Court Supreme People's Procuratorate

September 12, 2020

Supreme People's Court Supreme People's Procuratorate

Interpretation on Several Issues Concerning the Specific Application of Law in Handling Criminal Cases of Infringement of Intellectual Property Rights (III)

(Adopted at the 1811st Meeting of the Judicial Committee of the Supreme People's Court on August 31, 2020, and the 48th Meeting of the 13th Procuratorial Committee of the Supreme People's Procuratorate on August 21, 2020, and effective as of September 14, 2020)

In order to punish crimes of infringing intellectual property rights according to law and maintain the order of the socialist market economy, in accordance with the Criminal Law of the People's Republic of China, the Criminal Procedure Law of the People's Republic of China and other relevant provisions, the following explanations are given on some issues concerning the specific application of law in handling criminal cases of infringing intellectual property rights:

Article 1 Under any of the following circumstances, it may be recognized as a "trademark identical with its registered trademark" as stipulated in Article 213 of the Criminal Law:

（1） Changing the font, capital and lowercase letters or the horizontal and vertical arrangement of words of a registered trademark, which is basically no different from the registered trademark;

（2） Changing the spacing between words, letters, numbers, etc. of a registered trademark, which is basically the same as that of a registered trademark;

（3） Changing the color of a registered trademark does not affect the distinctive features of the registered trademark;

（4） Only adding the common name and model of the commodity on the registered trademark lacks the elements of distinctive features, which does not affect the expression of the distinctive features of the registered trademark;

（5） There is basically no difference with three-dimensional signs and plane elements of three-dimensional registered trademarks;

（6） Other trademarks that are basically indistinguishable from registered trademarks and can mislead the public.

Article 2 A natural person, legal person or organization without legal personality who signs his name in the usual way on a work or sound recording as provided for in Article 217 of the Criminal Law shall be presumed to be the copyright owner or sound recording producer, and there are corresponding rights in the work or sound recording, unless there is evidence to the contrary.

In the case where there are many kinds of works and sound recordings involved and the obligees are scattered, if there is evidence to prove that the copies involved are illegally published, reproduced and distributed, and the publisher and reproduction publisher cannot provide relevant evidentiary materials that have been approved by the copyright owner and the sound recording producer, it can be identified as "without the permission of the copyright owner" as stipulated in Article 217 of the Criminal Law "Without the permission of the recording producer". However, unless there is evidence to prove that the obligee has waived his rights, the copyright of the work involved in the case or the relevant rights of sound recordings are not protected by China's copyright law, or the term of protection of the rights has expired.

Article 3 Those who steal trade secrets by illegal copying, unauthorized or unauthorized use of computer information systems, etc. shall be identified as "theft" in Item 1 of Paragraph 1 of Article 219 of the Criminal Law.

Obtaining the obligee's business secrets by bribery, fraud, electronic intrusion and other means shall be identified as "other improper means" as stipulated in Item 1 of Paragraph 1 of Article 219 of the Criminal Law.

Article 4 The implementation of the act specified in Article 219 of the Criminal Law shall be deemed as "causing heavy losses to the obligee of trade secrets" in any of the following circumstances:

（1） Causing losses to the obligee of trade secrets or obtaining more than 300000 yuan from the infringement of trade secrets;

（2） The obligee of trade secret directly goes bankrupt or goes bankrupt due to major business difficulties;

（3） Causing other heavy losses to the obligee of trade secrets.

If the amount of loss caused to the obligee of trade secret or the amount of illegal gains from infringement of trade secret is more than 2.5 million yuan, it shall be recognized as "causing particularly serious consequences" as stipulated in Article 219 of the Criminal Law.

Article 5 The amount of losses or illegal gains caused by the implementation of the acts specified in Article 219 of the Criminal Law may be determined in the following ways:

（1） If the obligee's trade secret is obtained by improper means and has not been disclosed, used or allowed to be used by others, the amount of loss may be determined according to the reasonable licensing fee for the trade secret;

（2） If the obligee discloses, uses or allows others to use the trade secret obtained by improper means, the amount of loss may be determined according to the loss of sales profit caused by the infringement of the obligee, but if the amount of loss is lower than the reasonable licensing fee for trade secret, it shall be determined according to the reasonable licensing fee;

（3） If the obligee discloses, uses or allows others to use the trade secrets it holds in violation of the agreement or the obligee's requirements for keeping trade secrets, the amount of loss may be determined according to the loss of sales profits caused by the obligee's infringement;

（4） If the obligee still obtains, uses or discloses the trade secret even though he knows that it is obtained by improper means or is disclosed, used or allowed to use in violation of the agreement or the obligee's requirements for keeping the trade secret, the amount of loss may be determined according to the loss of sales profit caused by the infringement of the obligee;

（5） If the trade secret has been known to the public or lost due to the infringement of trade secret, the amount of loss may be determined according to the business value of the trade secret. The business value of a trade secret can be comprehensively determined according to the research and development cost of the trade secret and the income from the implementation of the trade secret;

（6） Property or other property interests obtained by disclosing or allowing others to use trade secrets shall be recognized as illegal income.

The loss of sales profit caused by the obligee due to infringement as specified in Item 2, Item 3 and Item 4 of the preceding paragraph may be determined by multiplying the total amount of sales volume reduction caused by the obligee due to infringement by the reasonable profit of each product of the obligee; If the total amount of sales volume reduction cannot be determined, it can be determined by multiplying the sales volume of infringing products by the reasonable profit of each product of the obligee; If the total amount of sales volume reduction and the reasonable profit of each product of the obligee due to infringement cannot be determined, it can be determined by multiplying the sales volume of the infringing product by the reasonable profit of each infringing product. If the trade secret is used for other business activities such as service, the amount of loss can be determined according to the reasonable profits reduced by the obligee due to infringement.

The remedial expenses paid by the obligee of trade secret to mitigate the loss of business operation and business plan or restore the security of computer information system and other systems shall be included in the losses caused to the obligee of trade secret.

Article 6 In criminal proceedings, if a party, defender, agent ad litem or an outsider applies in writing for taking confidentiality measures against the evidence and materials of relevant trade secrets or other business information that need to be kept confidential, necessary confidentiality measures such as organizing litigation participants to sign a confidentiality commitment letter shall be taken according to the circumstances of the case.

Those who violate the requirements for confidentiality measures in the preceding paragraph or the confidentiality obligations stipulated by laws and regulations shall bear corresponding responsibilities according to law. Those who disclose, use or allow others to use the trade secrets they have contacted or obtained in the criminal proceedings without authorization, in conformity with the provisions of Article 219 of the Criminal Law, shall be investigated for criminal responsibility according to law.

Article 7 Except under special circumstances, goods with counterfeit registered trademarks, illegally manufactured registered trademark logos, copies infringing copyright, goods mainly used to manufacture counterfeit registered trademarks, registered trademark logos or infringing copies of materials and tools shall be confiscated and destroyed according to law.

If the above articles need to be used as evidence in a civil or administrative case, they can be destroyed after the end of the civil or administrative case or after the evidence is fixed by sampling, photographing, etc. upon the application of the obligee.

Article 8 Under any of the following circumstances, a heavier punishment may be imposed as appropriate, and probation is generally not applicable:

（1） Mainly engaged in infringement of intellectual property rights;

（2） Infringement of intellectual property rights again after being punished for infringement of intellectual property rights constitutes a crime;

（3） Counterfeiting registered trademarks of goods such as emergency relief and epidemic prevention materials during major natural disasters, accident disasters and public health events;

（4） Refusing to hand over the illegal gains.

Article 9 Under any of the following circumstances, a lighter punishment may be given as appropriate:

（1） Pleading guilty to punishment;

（2） Obtaining the understanding of the obligee;

（3） Showing repentance;

（4） The trade secret of the obligee has not been disclosed, used or allowed to be used by others after obtaining it by improper means.

Article 10 For the crime of infringing intellectual property rights, a fine shall be imposed in accordance with the law, taking into account the amount of illegal gains, the amount of illegal business operations, the amount of losses caused to the obligee, the amount of infringing and counterfeit goods, and the social harmfulness.

The amount of fine is generally determined between one time and five times the amount of illegal income. If the amount of illegal gains cannot be ascertained, the amount of the fine shall generally be determined on the basis of not less than 50 percent but not more than one time the amount of illegal business operations. If neither the amount of illegal gains nor the amount of illegal business operations can be ascertained, and if a person is sentenced to fixed-term imprisonment of not more than three years, criminal detention, public surveillance or a single fine, the amount of the fine is generally between 30000 yuan and one million yuan; If a person is sentenced to fixed-term imprisonment of not less than three years, the amount of a fine is generally not less than 150000 yuan but not more than 5 million yuan.

Article 11 After the release and implementation of this interpretation, if the judicial interpretations and normative documents previously released are inconsistent with this interpretation, this interpretation shall prevail.

Article 12 This interpretation shall come into force on September 14, 2020.

The heads of relevant departments of the "two high" Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Specific Application of Law in Handling Criminal Cases of Infringement of Intellectual Property Rights (III) Answer the reporter's question

On September 13, the Supreme People's Court and the Supreme People's Procuratorate jointly issued the Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Certain Issues Concerning the Specific Application of Law in Handling Criminal Cases of Infringement of Intellectual Property Rights (III) (hereinafter referred to as the Interpretation), which will come into force on September 14, 2020. In order to better understand and apply the Interpretation, the head of the Third Civil Division of the Supreme People's Court and the head of the Fourth Procuratorial Office of the Supreme People's Procuratorate were interviewed by reporters.

Q: Please introduce the background and main contents of the Interpretation?

Answer: Criminal judicial protection of intellectual property is the most compelling and deterrent way of intellectual property protection. The CPC Central Committee has always attached great importance to the criminal judicial protection of intellectual property rights. In November 2019, the General Office of the CPC Central Committee and the General Office of the State Council further specified in the Opinions on Strengthening the Protection of Intellectual Property Rights that "strengthen criminal judicial protection and promote the revision and improvement of criminal laws and judicial interpretations. We will intensify the criminal crackdown, study and reduce the criteria for the criminalization of intellectual property infringement crimes, increase the intensity of sentencing and punishment, modify the description of the facts of crime, and promote the solution of the problems such as the disposal of infringing goods involved in the case. ". In judicial practice, with the development of social economy, new types of intellectual property crimes are emerging. Criminal cases of intellectual property, especially cases of infringement of trade secrets, have many controversial issues, which need to be clarified and standardized by issuing relevant judicial interpretations.

There are 12 articles in the Interpretation, which mainly stipulates three aspects: first, it stipulates the conviction and sentencing standards of the crime of infringing trade secrets, and stipulates different loss calculation methods according to the degree of social harm of different acts, so as to unify the standards of legal application; The second is to further clarify the specific identification of the crime of counterfeiting registered trademarks "the same trademark", the crime of infringing copyright "without the permission of the copyright owner", and the crime of infringing trade secrets "improper means", so as to unify the understanding of judicial practice; The third is to clarify the application of penalties for crimes against intellectual property rights and grasp the criminal policy of combining punishment with leniency, stipulate the situation of heavier punishment, non application of probation and lighter punishment, and further standardize the sentencing standards.

Q: Please introduce the drafting process of the Interpretation, and what are the main ideas for its formulation?

Answer: The work of formulating the Interpretation has been brewing for a long time. Since 2018, the Third Civil Division of the Supreme People's Court has successively carried out research on intellectual property criminal justice work in courts across the country, research on the marking of intellectual property criminal cases in some courts, discussion and research on criminal justice work and other work; The Fourth Procuratorate Office of the Supreme People's Procuratorate conducted in-depth research on the prosecution and non prosecution of criminal cases of infringement of trade secrets handled in 11 provinces throughout the country from 2017 to 2019, and conducted written research on the legal application of criminal cases of infringement of intellectual property rights in the national economic crime procuratorial department. On the basis of sufficient research, we began to draft the Interpretation. We have repeatedly solicited opinions from relevant central departments, the national court system and the procuratorial system, organized expert argumentation meetings, and solicited opinions from the public. We have fully listened to the opinions of relevant experts, enterprises, social groups, industry associations, lawyers and individual citizens.

In the process of drafting the Interpretation, we adhered to the following principles:

First, adhere to the principle of legality and strictly interpret in accordance with the law. The Interpretation strictly follows the explicit provisions of the Criminal Law and the original intention of the legislation. Proceeding from the actual needs of punishing crimes that infringe intellectual property rights, it comprehensively considers the judicial practice experience, clarifies the meaning of relevant counts of crime according to law, and clarifies the boundary between crime and non crime.

Second, adhere to the problem orientation and effectively solve judicial practical problems. The Interpretation starts from the needs of judicial practice, increases the application of relevant circumstances in the conviction standards, and constructs a reasonable conviction and sentencing model; We will standardize the difficulties and doubts in the application of laws for the crimes of counterfeiting registered trademarks, infringing copyright and infringing trade secrets, and further unify judicial standards.

Third, adhere to the principle of combining leniency with severity, and highlight the focus of punishment. The Interpretation clearly stipulates the specific circumstances of heavier punishment and non application of probation, focuses on combating the situation of taking intellectual property infringement as a career and committing crimes again after being punished for infringement of intellectual property rights, defines the applicable standard of fine punishment, and gives full play to the function of punishment in punishing and preventing crimes; At the same time, it stipulates the situation of lighter punishment, which is conducive to resolving social conflicts.

Fourth, adhere to the consensus on the rule of law and fully absorb the suggestions of all parties. We carefully sorted out, studied and judged the opinions and suggestions from various aspects, fully considered and absorbed them, and insisted on condensing the wisdom of the rule of law from all walks of life in the Interpretation.

Q: The Opinions on Strengthening the Protection of Intellectual Property Rights clearly states that "to explore and strengthen the effective protection of trade secrets, confidential business information and their source codes". What are the main aspects of criminal protection of trade secrets in the Interpretation?

Answer: Trade secret is a right protected by the obligee himself by taking confidentiality measures. It does not have exclusive rights, and its own boundaries are relatively vague. Many domestic and foreign suggestions have been made to reduce the crime standard and increase the judicial protection of the obligee of trade secret. The Interpretation fully listened to the opinions of all parties and clarified the relevant issues of the crime of infringing trade secrets, which are mainly reflected in:

First, according to the needs of judicial practice, the standard of incrimination has been lowered. Expand the criminalization situation, and include the amount of illegal gains due to infringement of trade secrets, bankruptcy and bankruptcy of obligees due to infringement of trade secrets into the threshold of criminalization; According to the specific situation of judicial practice and the opinions of many parties during the consultation period, the amount of conviction was adjusted to "more than 300000 yuan".

The second is to build a systematic and standardized conviction and sentencing system. Based on the principle of consistency of crime, responsibility and punishment, different standards for determining "major losses" are stipulated according to the degree of social harm of different acts. In view of the fact that the act of obtaining trade secrets by illegal means such as theft is often more concealed, despicable and socially harmful, it is stipulated that the loss of the obligee can be determined according to the reasonable licensing fee of trade secrets for such acts, and it is no longer required to use trade secrets for production and operation to cause actual losses. For the breach of contract infringement of trade secrets, since the perpetrator's possession of trade secrets is legal and the harm is relatively less than the illegal acquisition, there should be a difference in the threshold of criminalization, and the amount of loss should be calculated according to the loss of sales profits of the obligee caused by the use of trade secrets.

The third is to clarify the application of laws and unify judicial standards. In view of the inconsistent understanding in the current judicial practice, the Interpretation makes it clear and standardized. For example, it is stipulated that the amount of loss can be determined according to the research and development cost of trade secret only when the trade secret has lost its non-public knowledge or lost, and the research and development cost of trade secret should not be extended to all kinds of violations of trade secret, so as to unify the judicial practice.