Latest Development In China’s Criminal Regulation On Intellectual Property.

1. Introduction 

April 26, 2025, marks the 25th “World Intellectual Property Day,” and China also announced the “National Intellectual Property Week” from April 20 to April 26. In the wake of rapidly changing global situation and profound changes unprecedented in a century, China has simultaneously strengthened the protection of intellectual property and the enforcement against intellectual property criminals.

2. Judicial Authorities of Different Levels Release Landmark Cases

During the National Intellectual Property Week, judicial authorities across the country have organized a series of press conferences, which not only disclosed data on intellectual property cases in 2024 but also released typical cases involving intellectual property. The specific information is as follows:

1. On April 21, 2025, the Supreme People’s Court (SPC) held a press conference to release the “2024 China Courts Intellectual Property Judicial Protection Report” and the 2024 People’s Court Intellectual Property Typical Cases.

2. On April 23, the Supreme People’s Procuratorate (SPP) held a press conference titled “High-Quality Intellectual Property Prosecution to Serve High-Level Scientific and Technological Innovation.” In 2024, the national procuratorate authorities accepted 13,486 cases for review of arrests related to intellectual property crimes and 33,805 cases for review of prosecutions. Additionally, the SPP, after research and approval by the Central Institutional Organization Office, added the designation of “Intellectual Property Prosecution Office” to the Economic Crimes Prosecution Office. Furthermore, the SPP released typical cases involving intellectual property prosecution.

3. On April 24, the Beijing High People’s Court released the top ten cases of intellectual property judicial protection and the top ten cases of judicial protection for trademark authorization and confirmation in 2024.

4. On April 18, the Beijing Procuratorate held a press conference to announce and release the bilingual version of the “Beijing Procuratorate Intellectual Property Prosecution White Paper (2024),” the typical cases of intellectual property protection by the Beijing Procuratorate in 2024, and the “Guidelines for the Beijing Procuratorate on High-Quality Development of the Copyright Industry”.

5. On April 23, the Shanghai High People’s Court held a press conference on intellectual property judicial protection to announce the top ten intellectual property judicial protection cases of the Shanghai courts in 2024.

6. On April 25, the Shanghai Procuratorate held a press conference to release the bilingual version of the “Shanghai Intellectual Property Prosecution White Paper (2024),” reporting on the criminal, civil, administrative, and public interest litigation cases involving intellectual property handled by the municipal procuratorate authorities in 2024.

3. Latest Development in China’s Criminal Protection on Intellectual Property Revealed in the Press Conference

1. Exploring the Use of Compulsory Measures in Intellectual Property Criminal Cases

In criminal cases, the choice of compulsory measures, especially the arrest rate, has always been a focus of public concern. According to the data provided in the Supreme People’s Procuratorate’s “Criminal Prosecution Work White Paper (2024),” in 2024, the procuratorate authorities nationwide accepted 1,117,281 cases for review of arrests and 2,179,648 cases for review of prosecutions for various crimes. Thus, the average rate of cases accepted for arrest is approximately 51.26%.

However, based on the data released during the aforementioned press conference by the SPP, in 2024, national procuratorate authorities accepted 13,486 cases for review of arrests related to intellectual property crimes and 33,805 cases for review of prosecutions. The average rate of cases accepted for arrest in intellectual property crimes is approximately 39.89%, which is 11% lower than the overall average rate of acceptance for arrests.

These figures indicate that in cases involving intellectual property crimes, the arrest rate is lower than that for all criminal cases. This suggests that judicial authorities are more cautious when choosing “arrest” as the compulsory measure in intellectual property cases, striving a balance between education and punishment.

2. Establishment of the Intellectual Property Prosecution Office at the Supreme People’s Procuratorate

From the press conference by the SPP, we learnt that the Economic Crime Prosecution Office has been added with another designation as the “Intellectual Property Prosecution Office.” As early as January 1, 2019, the Supreme People’s Court has already established the Intellectual Property Court, but no corresponding action was taken within the SPP.

This year, the addition of the “Intellectual Property Prosecution Office” designation to the Economic Crime Prosecution Office not only aligns with the corresponding institution in the Supreme People’s Court, but also signals to the public that the procuratorate authorities, especially the nation’s highest procuratorate, are attaching increasingly more importance to protecting intellectual property and combating intellectual property crimes. Since this institution has just been established, we will continue to follow and analyze its subsequent operations.

3. Equal Protection of Domestic and Foreign Entities as Shown in Bilingual Documents

By reviewing information related to the National Intellectual Property Week, we can see that the procuratorate authorities in Beijing and Shanghai have released the “Intellectual Property White Paper” in both Chinese and English versions.

As the international economic situation evolves, foreign trade has deeply intertwined with various aspects of China’s economic development, which leads to rising significance of intellectual property protection, especially that of foreign entities. By releasing the “Intellectual Property White Paper” in a bilingual format, Chinese judicial authorities can better demonstrate to the world the favorable business environment in China, the welcoming attitude towards foreign investments, and that the legitimate rights and interests of foreign entities, including intellectual property, will be protected by China’s relevant authorities.

4. Brief Analysis of New Types of Typical Criminal Cases 

For the typical cases released by various judicial authorities this time, we will only briefly analyze the new types of criminal cases among them. Therefore, we will not elaborate on the investigation, prosecution, and judgment content that are consistent with the past.

1. Unlawfully Acquiring Trade Secrets and Then Publishing Them as a Thesis Constitutes a Crime

In a trade secret infringement case released by the Supreme People’s Procuratorate, between June 2015 and December 2018, Hao X Wang worked as a software engineer at West X Company and participated in the development of the company’s “Rail Vehicle Operation Control System Equipment” project. Hao X Wang violated the company’s confidentiality regulations by stealing the design development documents, key equipment parameters, and other contents of the “Rail Vehicle Operation Control System Equipment” project through methods such as photographing with a mobile phone and copying onto a USB drive after work hours, and used them to write his master’s thesis titled “Design and Implementation of a Rail Vehicle Onboard Control System.”

From January to August 2020, Hao X Wang published this thesis on websites such as CNKI and Wanfang Data, during which time the thesis was massively viewed and downloaded, resulting in the relevant technology of West X Company research project being released into the public domain and losing its novelty. According to the audit report, from 2017 to 2019, West X Company has incurred over 2.18 million RMB in cost for research and development for the technology involved in the case.

Analysis: In traditional trade secret infringement cases, the suspect would usually profit from the illegally acquired trade secrets, thereby causing losses to the right holder. In this case, however, the suspect’s behavior after illegally acquiring the trade secrets was quite unique as he did not use the trade secrets for commercial activities but instead published them in a thesis, causing the right holder’s trade secrets to lose their novelty and become public knowledge, thus losing their market value and tradability. Consequently, the judicial authorities used the research and development costs of the trade secrets involved as the standard for determining the amount involved in the case, thereby convicting the suspect of the crime of infringing trade secrets.

2. Unlawfully Acquiring and Possessing Trade Secrets Constitutes the Crime of Infringing Trade Secrets

In the case of Guo X convicted of the crime of infringing trade secrets released by the Shanghai High People’s Court, the defendant Guo X was originally the founder of the victim company, having signed a confidentiality agreement and being responsible for the research and development of the project involved. To gain leverage during negotiations with the company and facilitate the continued use of related data after resigning, Guo X illegally copied and transmitted a large amount of confidential data, including two pieces of technical information related to the case, to his local computer and then uploaded it to his personal cloud storage.

The products associated with the trade secrets in this case were sold for a short period and in limited quantities, and production was carried out during special circumstances. Therefore, the relevant sales data failed to meet the conditions for applying the income method or market value method for evaluation. However, the victim company provided standardized and complete accounting vouchers and original documents for the research and development expenses related to the trade secrets, and thus the cost method was deemed appropriate for evaluation. The assessment also excluded and adjusted unrelated expenses, making determinations favorable to the defendant. In summary, the defendant Guo X used theft to acquire the victim company’s trade secrets, causing a total loss of 2.31 million RMB to the victim company.

Analysis: Like the first case, the suspect illegally acquired the trade secrets but did not use them for profit-making purposes and instead merely possessed the illegally acquired trade secrets. The court adopted the cost method to calculate only the expenses directly related to the research and development as the amount involved in the case, thereby determining that the defendant’s actions constituted the crime of infringing trade secrets.

3. Providing Confidential Information to Foreign Organizations as a Commercial Spy Constitutes a Crime

In the case released by the Shanghai Procuratorate, Tian X was convicted of illegally providing trade secrets to foreign organizations. From March 2022 until the case unfolded, the defendant Tian X served as a senior manager in the raw materials procurement department of the company, with access to the operational information held by Company Z. On March 10, 2024, Shanghai S Investment Consulting Co., Ltd. (hereinafter referred to as Company S), commissioned by the foreign organization M Consulting Company, invited Tian X to participate in paid consultation activities via a network platform conference call. Despite knowing that the consulting party was a foreign organization, Tian X accepted Company S’s arrangement for paid consultation activities and provided operational information such as the procurement status of silicon wafers by Company Z in 2022, illicitly gaining RMB 3,685.92. The relevant consulting records were sent to M Consulting Company via the internet. The court sentenced Tian X to one year and nine months of imprisonment and imposed a fine of RMB 50,000 for the crime of illegally providing trade secrets to foreign organizations.

Analysis: The crime of stealing, prying into, purchasing, or illegally providing trade secrets to foreign entities is a newly added crime under the “Criminal Law Amendment (XI),” and related cases are currently rare in practice. This case is one of the few publicly disclosed cases, which has significant value for studying. In this case, the suspect knowingly accepted paid consultation activities from a domestic consulting company with full knowledge that the end user of the consultation was a foreign company and provided relevant operational information of the rights holder. By emphasizing the element of “providing trade secrets to foreign entities,” the judicial authorities clarified the substantive recognition principle for “foreign institutions, organizations, and personnel,” effectively safeguarding the commercial interests of enterprises and national security.

4. “Borderline” Trademark Registration Constitutes the Crime of Counterfeiting Registered Trademarks

In the case of Hu XX counterfeiting registered trademarks released by the Shanghai Procuratorate, the defendant Hu XX operated five online clothing stores between June 2013 and October 2019. Starting in September 2017, Hu XX gradually applied to register four trademarks, including “Fa Bo Xiu,” through A Intellectual Property Agency Co., Ltd. (hereinafter referred to as Company A), all of which incorporated the registered trademark “Bo” of another party. From September 2019, Hu XX began listing various clothing items in her online stores. Instead of using her own registered trademarks in product promotions or titles, she highlighted the registered trademark “Bo” of another party by combining it with some words before and after it, misleading consumers with phrases such as “Authentic Bo Special Winter Down Jacket 2021” and “Li Fa Bo Xiu Casual 2021 Summer Wandering Spring Knit Slim Fit Shirt.”

Analysis: Unlike the traditional act of directly counterfeiting registered trademarks, this case features a “borderline” type of trademark registration. The defendant registered trademarks containing a well-known existing trademark and then used word combinations to highlight the registered trademark of others in the name of products listed in her online store, misleading consumers and generating profits illegally. This case demonstrates the emergence of new forms of counterfeiting registered trademarks, which has been observed by the judicial authorities and would be subject to criminal measures to protect the intellectual property rights of right holders.

5. Stealing IELTS Questions Constitutes the Crime of Copyright Infringement

In the case of Xu X Wen and others convicted of copyright infringement released by the Shanghai High People’s Court, from March 2019 to December 2020, the defendant Xu X Wen, in collusion with Cui X Dong, Zou X, and Gu X, conspired with staffs from a logistics company handling IELTS exam papers to obtain illegal profits. Logistics staffs, including defendants Ding X Jie and Zhou X, stole the sealed exam papers boxes from logistic hubs before the IELTS exams, with Ding X Jie conspiring with defendant Li X Ming who was responsible for disabling surveillance during the theft.

In a temporarily rented accommodation, Xu X Wen, Cui X Dong, and Zou X obtained the exam papers by unsealing the boxes and photographing or copying the questions. They then repackaged the exam papers in counterfeit or original sealed bags and returned them to the logistics hub via the logistics personnel. Gu X was responsible for providing the answers, and for the essay section of the exam, Cui X Dong and others were instructed to hire writers to produce model essays. After compiling the answers and essays, Xu X Wen, Cui X Dong, Zou X, and Gu X, either individually or through defendants Xu X, Liu X, and Liang X Li, recruited students nationwide, set up pre-exam face-to-face training classes, and charged corresponding fees. On the night before the exam, they provided face-to-face training, distributing the prepared IELTS exam questions and answers to the students for them to memorize in private.

Analysis: The defendants’ actions could potentially align with the crimes of organizing exam cheating or illegally selling or providing exam questions and answers. However, these crimes are limited to “national exams” as defined by Chinese law. The peculiarity of this case is that the exam involved is the “IELTS,” an exam organized by a foreign institution and not a national exam under Chinese law, making those charges inapplicable.

After ruling out the crimes of organizing exam cheating or illegally selling or providing exam questions and answers, this case could potentially constitute the crime of infringing trade secrets or copyright. The appellate court determined that each IELTS’s questions include personalized expressions by the authors regarding the textual content and format, possessing originality in selection and arrangement, thereby qualifying as works protected under copyright law. Ultimately, the court convicted them of copyright infringement. This case also reflects the judicial authorities’ approach to handling foreign-related intellectual property crime cases, ensuring equal protection for both domestic and foreign entities, precisely convicting and sentencing the defendants through professional and meticulous analysis.

5. New Trends in China’s Criminal Regulation of Intellectual Property from Typical Cases

1. Use of Hash Values for Fixing Electronic Evidence and Recovery of Virtual Currency Accounts

In judicial practice, an increasing number of offenders are using cryptocurrency instead of traditional cash or bank transfers in an attempt to evade legal responsibility. In the case of Wu X Feng and Shi X Yuan convicted of selling goods bearing counterfeit registered trademarks released by the Supreme People’s Procuratorate, investigative authorities strengthen communication with relevant e-commerce platforms and adopt methods such as using hash values to fix evidence and web page preservation to promptly extract and secure electronic evidence.

Similarly, in the copyright infringement case involving Kuang X, Chen XX, and others released by the Shanghai Procuratorate, the procuratorate thoroughly fulfilled their responsibilities regarding the prosecution of case-related assets. The authority focused on the payment and settlement rules, transaction models, and virtual currency wallets related to the promotion fees of the infringing private servers of the game in question. Through intensive questioning, they guided the public security authorities to retrieve screenshots of the cryptocurrency wallets involved, accurately determining the illegal gains of each defendant. By strengthening collaboration with the public security authorities, the judicial authorities enhanced legal explanations and reasoning, guided defendants to voluntarily provide account information and worked with the public security authorities to urge defendants’ family members to withdraw funds from the cryptocurrency accounts involved and voluntarily return the illegal gains.

While cryptocurrency transactions are explicitly identified as illegal in China, when criminal cases involve cryptocurrency, judicial authorities can not only use technology, such as hash values, to preserve evidence but also confiscate funds in cryptocurrency accounts. This reflects the advancement of criminal judicial technology and serves as a warning to suspects that using cryptocurrency does not exempt them from legal sanctions.

2. Inviting Technical Investigators and Specially Prosecutor Assistants to Aid in Case Handling

In intellectual property criminal cases, judicial officer often encounter highly technical issues, necessitating the assistance of individuals with specialized knowledge. For instance, in the case of Beijing Jun X Technology Co., Ltd., Sun X Ming, Hu X Wei, and others convicted of infringing trade secrets released by the Supreme People’s Procuratorate, the prosecutorial authorities invited a researcher from the Beijing Center of the Patent Examination Cooperation under the State Intellectual Property Office to serve as a technical investigator. They fully considered the expert’s professional opinions and jointly discussed the approach for examining and judging facts at the code level. Similarly, in the case of Suzhou H Electronics Technology Co., Ltd., Zhang XX, and others convicted of infringing trade secrets released by the Shanghai Procuratorate, the prosecutorial authorities appointed a specially invited prosecutor assistant with a technical background in the automotive industry to help clarify the technical information characteristics and specific operational mechanisms in the specialized field.

These cases illustrate that as science and technology develop and progress, an increasing number of high-tech enterprises face intellectual property infringement, and the infringed content is usually highly specialized. In such situations, judicial authorities would invite technical investigators or specially prosecutor assistants to help clarify technical issues in the relevant professional field, thereby accurately determining the nature of the cases. We highly appreciate this trend, as it shows that judicial authorities not only review cases from a documentary perspective but also gain a deeper understanding and comprehension of the intellectual property involved, enabling precise judgments and ensuring the conformity of crime, responsibility, and punishment.

3. Gradual Application of Criminal Incidental Civil Litigation in Intellectual Property Criminal Cases

In past judicial practices, criminal incidental civil litigation was rarely applied in monetary-related criminal cases. However, in several recently released cases, we see that intellectual property criminal cases are gradually applying criminal incidental civil litigation, further safeguarding the legitimate rights and interests of the right holders.

For example, in the series of cases released by the Shanghai Procuratorate involving Cheng X, Wang X Quan, and 14 others for counterfeiting registered trademarks, selling goods with counterfeit registered trademarks, and illegally manufacturing trademark labels, it was the first intellectual property criminal incidental civil litigation case in Shanghai to receive an effective judgment. From mediation to the fulfillment of civil compensation, the whole process was completed within one week, resolving both criminal liability and civil responsibility issues in an integrated manner.

4. Application of the Reverse Connection of Criminal and Administrative Measures for Administrative Penalties

In the process of handling intellectual property criminal cases, when judicial authorities find that there is no need to resort to criminal measures to regulate the parties involved, or when they identify other entities requiring administrative penalties, they would use the reverse connection mechanism of criminal and administrative measures to guide the competent authorities in carrying out administrative penalties.

For instance, in the copyright infringement case of Zhang X and Sun X released by the SPP, when the procuratorate found that the case does not meet the threshold of prosecution according to law, it would continue to examine whether the non-prosecuted individual would be subject to administrative penalties. If administrative penalties are deemed necessary and prosecutorial opinions are put forward according to law, the case would be transferred to the relevant administrative authorities for administrative penalties.

VI. Conclusion

During this year’s “National Intellectual Property Week,” within just a few days, we observed that judicial authorities at all levels released a large number of typical cases. These cases include both the types of cases that have been repeatedly emphasized in the past as priorities, as well as many new types of cases emerging.

By reviewing the highlights of press conferences and typical cases, we explore the new trends in the criminal regulation of intellectual property crimes by Chinese judicial authorities. With the passage of time and the development of science and technology, legal issues related to intellectual property will inevitably become more prevalent. We will continue to promptly follow new trends in law enforcement by judicial authorities, thereby providing more professional legal services to all clients.

For further information, please contact:

Min Ding, Partner, Anjie Broad Law

dingmin@anjielaw.com

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