China’s IP Enforcement Revolution: 5 Things Every Business Needs to Know
A Comparative Perspective: China vs. NZ, UK, and Australia (Part I)
China IP enforcement has undergone its most significant transformation in a generation. For businesses operating across China and common law jurisdictions—particularly NZ, the UK, and Australia—understanding these shifts is no longer optional; it is a strategic necessity.
1. Criminal IP Law Isn’t New in China—But It Now Has Teeth
A common misconception is that China only recently introduced criminal liability for IP infringement. Dedicated criminal IP provisions have been embedded in Chinese law since the 1997 revision of the Criminal Law.[1]
What is genuinely transformative is Criminal Law Amendment XI, which came into force on 1 March 2021.[2] This amendment represents a massive scaling-up of the state’s enforcement power:
Higher Penalties: It raises the maximum custodial sentence for “especially serious” trademark and copyright offences from seven to ten years.
Expanded Scope: For the first time, criminal trademark coverage explicitly includes service marks.
New Offences: It introduces a specific commercial espionage offence.[3]
Stricter Enforcement: It tightens the availability of probation for IP offenders, ensuring convictions lead to meaningful deterrence rather than mere financial penalties.
2. Trade Secrets: China Goes Criminal; The Common Law Stays Civil
There is a striking structural divergence between China and the traditional common law systems regarding trade secrets. While China has maintained criminal sanctions for trade secret misappropriation since 1997, Amendment XI significantly lowered the bar for prosecution. It replaced the restrictive “significant losses” threshold with a much broader “serious circumstances” standard.[3]
In contrast, the common law world remains firmly anchored in civil litigation:
- The UK introduced a statutory framework in 2018 providing civil remedies only.[4]
- Australia and New Zealand rely on the common law equitable action for breach of confidence.[4] There is no dedicated statute or criminal liability for trade secret theft in either country.
The Practical Implication: A thief who steals trade secrets and takes them to China now faces the very real threat of criminal prosecution. In New Zealand or Australia, that same theft remains, fundamentally, a civil wrong.
3. Patent Infringement Is—Everywhere—a Civil Matter
One point of global convergence is that no major jurisdiction criminalises general patent infringement. This remains a deliberate policy choice consistent with TRIPS Article 61.
In China: Only patent counterfeiting (the specific act of passing off a non-patented product as patented) attracts criminal liability, which is capped at three years.[5]
In the West: The UK, Australia, and New Zealand impose no criminal liability for patent infringement, relying exclusively on civil remedies such as injunctions and damages.
While China is aggressively criminalizing other areas of IP, they have maintained the international standard that standard patent disputes should be settled in the civil courts.
Raymond Huo is a Principal at Righteous Law, Auckland, New Zealand, practising in commercial law with a focus on China-related business and intellectual property matters.
Part I Footnotes
[1] PRC Criminal Law (revised 1997), Arts 213–220: offences including trademark counterfeiting (Art 213), copyright piracy (Art 217), and patent counterfeiting (Art 216).
[2] National People’s Congress Standing Committee, Amendment XI to the Criminal Law of the People’s Republic of China (effective 1 March 2021).
[3] Criminal Law Amendment XI, amending Art 219: the ‘significant losses’ threshold is replaced with ‘serious circumstances’. Commercial espionage is inserted as Art 219A.
[4] UK Trade Secrets Regulations 2018 (SI 2018/597). Australia and New Zealand rely on Coco v AN Clark (Engineers) Ltd [1969] RPC 41.
[5] PRC Criminal Law, Art 216: Patent counterfeiting (distinct from unauthorized use/infringement).
Disclaimer
The information in this article is for general informational purposes only and does not constitute legal, financial, or professional advice of any kind. While every effort has been made to ensure accuracy, the content is provided “as is” without any warranties. Reading or acting upon this information does not create a solicitor-client relationship or any other professional relationship between you and Righteous Law Limited or its lawyers. The author and publisher expressly disclaim all liability for any loss or damage arising from reliance on this content. Laws and regulations are subject to change. You are strongly advised to seek independent legal counsel tailored to your specific circumstances before making any decisions.
