patent jurisdiction in china--present and future

jian li*

it is my great honor and pleasure to address here. in the next few minutes i would like to focus on what is happening in china about patent jurisdiction, and the discussions of the specialized ip court. maybe some of the questions have been or are being discussed in the process of establishment of european patent court.

background

chinese patent law was first enacted in 1984 with the background of reform and opening, it has since undergone two major revisions, the first was in 1992, and the second was in 2000. both of them are somewhat related with china’s accession to gatt and wto, now the third revision is underway.

under the current patent law, there are three types of patents: patents for inventions, utility models and designs. the latter two hold the majority of the granted patents.

the patent cases could be classified into four main types: patent infringement dispute, patent administrative dispute, patent ownership dispute and patent contractual dispute. among them, patent administrative cases refer to the disputes relating to patent granting, invalidation and upholding as well as other administrative injunction. by the way, the related administrative authorities in the local government are empowered to order the infringer to cease infringement. if any party is not satisfied with the decision, he or she may file a lawsuit before the courts.

there are four levels of court in china: the supreme court, the higher court, the intermediate court and the basic court. the supreme court is the highest judicial authority of the state. one of its functions is to issue judicial interpretations, which are legally binding. there is one high court in each province, autonomous region and the municipality. each medium city has one intermediate court and each county has one basic court.

china has adopted a "two-instance" procedure system. the decisions of the court of first instance could be appealed to the court at the higher level, which makes the final decisions. of course, if some material incorrect could be proved by evidence, the higher-level court, even the supreme court, shall retry the final case. in addition, both fact and law issues shall be reviewed during the appeal and retrial.

as to the trial organ, in china there is no specialized ip court, rather, a system of specialized division to hear ip cases. the first specialized ip division was created in beijing courts in 1993, and in 1996 the supreme court also setup the ip division. afterwards many higher courts established the specialized division to hear the ip cases, till around 2001, every higher court and many intermediate courts in major cities have established the specialized ip division.

jurisdiction

the rule of the jurisdiction is different depending on the different types of cases.

for the patent administrative disputes relating to patent reexamination board (prb), such as patent granting, invalidation, upholding and compulsory licensing, the beijing first intermediate court has the exclusive jurisdiction because prb is located in beijing. correspondingly, the beijing higher court is the appellate court for these cases.

for the other kinds of patent cases, the lowest level of the trial court is the intermediate court, but not every intermediate court, only those situated in the capital cities of the provinces and some other intermediate courts assigned by the supreme court. till now, there are 64 intermediate courts which have exclusive jurisdiction over the patent cases. obviously, the purpose of the centralized jurisdiction over patent disputes is to develop expertise in patent law through more exposure to patent cases.

from the perspective of territory, as a basic principle, litigation is under the jurisdiction of the court in the place where the infringer is located or the place where the infringement takes place. however, due to the comprehensive definition of "the place where the infringement takes place”, the plaintiff will have more freedom to make choices among courts, which lead to two phenomena, one is the centralized trial, the other is that some cases with similar facts may end up with different judgments by various courts, which is a threat to the predictability of decisions.

parallel procedures

chinese patent law gives any person, including patentee, the right to initiate invalidation proceedings before the prb. once a decision is issued by the prb, any party may bring an action in the beijing first intermediate court. in the lawsuit, the prb is the defendant, and the winning party in the invalidation procedure is the third party. so the nature of the procedure is administrative cases, but somebody argued that it should be viewed as the civil cases, though prb is the administrative body, because it is inter parties, rather than ex parti procedure in nature.

before the 2000 amendment of patent law, a decision by prb regarding the validity of a utility model or design patent was final, while a decision by prb on the validity of an invention patent was subject to appeal. to comply with trips, which requires that the administrative decisions in any proceeding for the acquisition and maintenance of ip shall be subject to judicial review, the 2000 amendment removed the finality of prb’s decision on the validity of utility models and design. at present, the validity of the three types of patent could be challenged before the beijing first intermediate court, then appeal to the beijing higher court.

in china, it is somewhat common for a defendant in a patent infringement cases to challenge the validity of the patent as part of its defense. the patent invalidation proceedings are strictly separate from, and independent of, patent infringement procedures. in other words, the judges in the infringement procedure have no right to determine the validity of one patent directly.where an invention patent's validity is challenged, the court hearing the infringement claim retains discretion over whether to suspend. in cases involving patents for invention, the court may not suspend the legal proceedings normally. in infringement lawsuits relating to utility models or design rights, if the defendant files an invalidation request with the prb within the time limit for making a defense, the court usually suspends the infringement proceedings until the prb makes its decision or the final decision of the validity. this could therefore lead to an unsatisfactory state of much delay in the proceedings. especially, if both validity and infringement are in issue, it will take a long time to reach the final decision, depending on the complexity of the case.

despite of the debates on the public or private procedure in theory, the heart of problem is if there is a procedure to ensure the panel to embrace the technical issue arising from the invalidation cases, i think.

technical issues

in my personal opinion, the complexity of patent law, or the biggest difference from other fields of law, lies not in its legal principles but in the scientific fact-finding required to apply those legal principles properly. indeed, difficult questions of scientific fact are likely to arise more frequently in patent law than in any other field of law. this is also a big challenge for the legally- qualified judge. in china, most patent judges do not have any technical background, so the courts normally deal with the complex technical issues in the following two ways:

1.          entrusting technical experts to provide verification and the verification conclusion is used as evidence, which should be examined before being admitted.

2.          inviting technical experts to serve as court consultants. and their opinions will be used only as reference, not evidence, by the panel.

even so, there are some suggestions to enhance the competences of the panel to keep up with the increasing complexity of technology.

specialization of the ip court

as mentioned above, there is no specialized ip court in china, only specialized ip division. with the tendency of specialization of ip court, a comprehensive discussion about the establishment of the specialized ip court is being developed. in my opinion, the heart of discussion lies on how to simplify the procedure, increase accuracy and predictability of decisions. simply put, how to make ip protection faster, fairer and clearer.

anyway, the specialized ip court is a very complicated issue，many ip specialists are in favor, but not everybody. the proponents believe that the specialized ip court will advance judicial efficiency and economy, improve consistency and predictability of decisions. however, the opponents argue if the specialization of the ip court would be so much beneficial. they questioned if only ip cases confront the problem of uniformity and hold that uniformity doctrine shall be applied to all kinds of cases besides ip cases. regardless of the pros and cons, at least it will provide more possibilities to make the administration of justice more efficient.

based on various angles, there are some proposals, but there is still no consensus about what form in ip court should take.

from the perspective of subject matter, one possibility is to hear patent cases only, while another is to hear all ip cases relating the civil, criminal and administrative dispute, similar to the thailand ip court. in fact, several basic courts in guangdong and shanghai, began to concentrate the civil, criminal and administrative ip cases into the ip division to handle, which could be regarded as one tentative step.

from the perspective of uniformity of decisions, there is one point holding to establish several circuit courts to hear the appellate cases, like the cafc in usa.

from the perspective of procedure, some scholars propose that the court should handle both the validity and infringement procedure to be more efficient. another point is to define the prb as the quasi-judicial organ, its examination will be regarded as the first instance, then after an appeal to court, the decision will be final.

from the perspective of technical issue, some persons insist on merging prb and beijing first intermediate court into the “capital ip court” with the reference of german style, where the panel is composed of technical and legal qualified members. another point of view is to introduce the technical research official, like japan, to embrace the technical issue.

in my personal opinion, technical issue is the core of the various key issues. the expertise does not have to come directly from the judges themselves, because even if all judges were technically trained, they could hardly be versed in the dozens of technical fields. instead, a specialized court or procedure providing with the resources to appoint expert consultants may be preferable.

in china, there is one characteristic system namely people’s assessors, which is much different from the juror system. the congress will select an assessor from a pool of pre-qualified citizens. if selected, the assessors will serve a term of 5 years on a part-time basis. importantly, assessors will have the same power as judge, except that they are unable to preside over the panel or wear court dress, so they have a nickname: judge without robe. in my personal opinion, if the qualification of the assessors were defined within the expert, probably the system could be rebuilt to deal with the technical issues much better, because it provides more opportunities to merge the judicial power of judge to the comprehensive fields of science.

summary

generally speaking, the court system is a complicated issue. there is no best model, but feasible experience. we could draw many blueprints, however, from the practical standpoint, one preferable system shall be based on and compatible with the local fundamental custom and practice.

it is too early to figure out how the chinese patent jurisdiction system will develop, but what are the certain is the research will go further and deeper. it is a long way behind, so there is a lot of potential and space for china to establish one more preferable system. in the process, it is beyond doubt that the international experiences are valuable.

thanks for your time.