Great Wall of Consequences

China once again tightens the measures against IP rights infringers and strengthens own control over companies and managers. 38 Chinese state-level authorities signed a Memorandum of Understanding (MOU) on December 5, 2018. Central message of the document is that authorities – including the National Intellectual Property Administration and the Supreme People’s Court – are working on much closer cooperation in sanctioning severe IPR violations.

The MOU is primarily about repeated IP infringements like multiple patent infringements or the forgery of relevant documents during patent application. In the future, companies guilty of such offences shall be registered in a public data base and face further consequences.

Amongst other data bases, infringers will be registered at www.creditchina.gov.cn, a website that has been storing so called credit data on Chinese citizens and companies since 2015. Additional consequences include restricted financing, limited access to high executive positions in state-owned enterprises and many more. In other words: severe IPR infringements would narrow a company’s future scope of action significantly.

Very likely, the measures introduced in the MOU will discourage potential IPR infringers. The document also puts emphasis on a stronger cooperation between China’s public authorities. This will surely lead to increased legal certainty for IPR holders. But it will also facilitate the country’s access to companies’ most sensitive data and further increase China’s ubiquitous surveillance.

Source: National Intellectual Property Administration (CNIPA)

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