Judicial Protection for Intellectual Property in China

The Supreme People’s Court of the PRC

China has made great efforts in developing a more strong and transparent IP judicial enforcement system. Courts certainly play a vital role in IP protection and hold the power of final decision-making for all cases. Focusing on strengthening judicial capabilities and enhancing judicial levels, the courts at all levels across China brought every IP trial functions into full play, conducted all kinds of IP cases according to law, coordinated IP relationship appropriately and severely punished activities of IP infringements and crimes. Right holders' legitimate rights and interests as well as public interests were safeguarded effectively and IP judicial protection was strengthened constantly.

Part 1  Caseload

I  Civil Cases

In the year of 2006, people's courts at all local levels across the country accepted total 14,219 IP civil cases of first instance and concluded 14,056 ones, with respective increases of 5.92% and 4.95% over that of last year. These accepted cases were composed of 3,196 patent cases, 2,521 trademark cases, 5,719 copyright cases, 681 technological contract cases, 1,256 unfair competition cases and 846 other IP cases. The concluded cases were composed of 3,227 patent cases, 2,378 trademark cases, 5,751 copyright cases, 668 technology contract cases, 1,188 unfair competition cases and 844 other IP cases. A total of 2,686 IP civil cases of second instance were accepted, 2,652 of which were concluded, decreasingly by 13.74% and 12.07% respectively than those of last year. Another 42 cases were of re-trial proceedings, with a decrease of 3 over the previous year, and 42 cases were concluded.

As a matter of fact, IP civil cases received by courts are continuously and steadily increasing in past more than twenty years. Especially, in recent years, the annual number of IP civil cases has increased rapidly by annually 20% or so. After the accession to the WTO, that is, from 2002 to 2006, the courts across the country received 54,321 first instance IP civil cases and 52,437 were concluded, with annually average increases of 17.06% and 19.29% respectively. These figures increased by 145.92% and 141.99% respectively as compared with those before the WTO entry, that is, from 1997 to 2001.

In 2006, IP cases involved parties of foreign countries, Hong Kong, Macau and Taiwan accepted by national people's courts raised obviously. 353 IP civil cases of first instance involving foreign litigants were concluded, with an increase of 52.16% over that of 2005. 229 IP civil cases of first instance involving litigants from Hong Kong, Macau and Taiwan were concluded, with an increase of 34.71%. In addition, just from January to October in 2006, national people's courts accepted and concluded IP civil cases of first instance involving "three kinds of foreign-invested enterprises" respectively amounted to 752 and 447. Of these cases, 533 accepted cases and 308 concluded ones were foreign-invested ventures related; 219 accepted cases and 139 concluded ones were Hong Kong, Macau and Taiwan-invested ventures involved. These kinds of foreign-related IP cases accounted for considerable proportion.

The courts pay great attentions on the adoption of provisional measures, to timely prevent infringements and effectively protect the interests of the rightholders. According to a statistics, since 2001 to October 2006, local courts of the country received 430 preliminary injunction applications and concluded 425 of them, the actual upholding rate reached 83.17% among cases excluding those settled or withdrawn, of which, more than half were patent cases; received 642 applications concerning pre-trial preservation of evidence and concluded 607 of them, the actual upholding rate reached 92.67%, of which, nearly half were patent cases; received 218 applications concerning pre-trial preservation of property and concluded 208 of them, the actual upholding rate reached 96.07%.

II  Administrative Cases

The courts sternly implemented the judicial review function over the cases related to grant of patent and trademark as well as the IP administrative enforcement, to regulate and supervise the enforcement actions of administrative organs in accordance with laws. In 2006, people's courts across the country accepted 1,396 IP administrative cases of first instance, 1,436 cases were concluded during the same period. Of these accepted cases, 458 were patent cases, with an increase of 36.72%; 235 were trademark cases, with an increase of 12.44%; 10 were copyright cases, with a decrease of 67.74%; 690 were technological supervision cases; and 3 were other cases.

III  Criminal Cases

As for the IP criminal protection, a total of 2,277 IP criminal cases were concluded by people's courts across the country in 2006, with 3,508 suspects sentenced to be effective judgments and 3,507 suspects sentenced to be guilty. Among them, 769 cases of IP infringement crimes (an increase of 52.28% than that of last year), 437 cases of manufacturing or selling false and inferior commodity crimes, 1,066 cases of illegal business crimes with IP infringement involved in and 5 cases of other crimes were concluded, with 1,212 (an increase of 62.21% than that of last year), 766, 1,525 and 5 suspects sentenced respectively per effective judgements.

Part 2  Judicial Interpretations and Policies

The doctrine of precedent does not exist in the Chinese judicial system. However, under the Constitution, the Supreme People's Court (SPC) is authorized to interpret laws when it is needed and the interpretations themselves are applied as laws. The so-called Judicial Interpretations (JI) has a special position in the legal framework for IP protection.

Up to the end of June, 2007, the SPC has issued more than fifty judicial interpretations or opinions as to the trial of IP cases, most of which remain in force. In order to further improve IP litigation system after China’s WTO entry, the SPC’s Judicial Committee discussed and passed 19 IP JIs from 2001 to April 2007, concerning issues of patent, trademark, copyright, new variety of plant, integrated circuit, technology contract, unfair competition, domain name of Internet, IP crimes, provisional measures, and so on. The latest two civil JIs respectively concerning the trial of unfair-competition cases and new varieties of plant cases were issued on January 12, 2007.

In December 2004, October 2005 and April 2007, the SPC and the Supreme People’s Procuratorate (SPP) jointly issued three very important JIs on the matter of IP crimes to significantly lower down the threshold of punitive sanctions and to clarify the standards of sentencing on IP crimes. Now it is much easier to put IP infringers in jail than before and tougher penalties for IP crimes will be imposed.

At present, the SPC is drafting several new judicial interpretations on issues concerning the protection for well-known trademarks, MTV, conflicts of IPRs and criteria of adjudicating upon patent infringement. Some of these JI drafts have been published seeking for public comments.

To further strengthen the judicial system for IP protection, the SPC has done many research projects and issued many judicial policies through the annual National IP Trial Conferences (in which all IP senior judges meet together and discuss cutting-edge issues) and judicial documents. In January 2007, the SPC issued a remarkable document, Opinions on Comprehensively Improving Trials Related to Intellectual Property Rights to Provide Judicial Security for the Development of an Innovative Society, which set a comprehensive plan for the judicatory work concerning IP trials and is of great significance for the court to crack down on infringements more effectively and to enhance IP protection through civil, administrative and criminal justice. Nevertheless, more detailed trial principles and standards were clarified by the SPC in its’ case judgements and decisions.

Part 3  Improvement of Judicial System

China does not have independent Patent Court or IP Court exclusively dealing with all patent or IP civil cases. However, within the Chinese court system, specialized tribunals (i.e., so-called Intellectual Property Division) handling IP cases have been established in all High People’s Courts of provinces and Intermediate People’s Courts in provincial capital cities and many other economically advanced cities. According to a statistic, there were 172 Intellectual Property Divisions and 140 Intellectual Property Collegiate Panels within the whole court system in early 2006. The Intellectual Property Division of the SPC was founded in October, 1996.

To reasonably deploy the IP judicial resources and ensure the trial quality, the jurisdiction of the courts over IP cases is relatively centralized and generally limited to intermediate courts. Up to July, 2007, there are only 26 primary courts can accept general IP cases, such as cases of trademark, copyright and technology contract. More strictly, cases in relation to patent, new varieties of plant and layout-designs of integrated circuits are limited to those experienced and specifically designated intermediate courts. Up to July, 2007, only 67 intermediate courts hold such jurisdiction over patent cases, namely intermediate courts in all provincial capitals and 32 other big cities. As for cases of new plant varieties and integrated circuits, 38 and 43 intermediate courts are exclusively entitled to try, respectively.

To improve the openness and transparency of IP related trials, the SPC issued a notice in March 2006, requiring local courts throughout the country to announce on line convicted cases on IPR related crimes. On March 10, 2006, the SPC officially launched the web of China IPR Judgements and Decisions (http:// ipr.chinacourt.org) which provided an integrated platform for making effective IP verdict documents of national courts known to the public. The courts of China will make more efforts in legal publicity, so as to gradually improve the legal awareness of the public on respecting and protecting IPR, and encourage the public to voluntarily fight against IP infringements.

To improve judicial competence on IP trial, the SPC and relevant local courts has long paid more attention to training specialized judges through the National Judges College, provincial Judges Colleges and other institutes in regular or irregular bases. For example, the SPC has held 8 IP trial training programs at the National Judges College in past five years and more than 1,000 IP judges were trained.

With constant improvement in the public awareness on IPR protection, in relevant legislations and in law enforcement, the overall environment for IP judicial protection will surely be constantly optimized. The courts of China will continue its faithful performance of its legal responsibilities, strengthen the efforts in IPR protection through civil, administrative and criminal justice, improve the efficacy of IP judicial protection, and endeavour to create a sound legal environment for IP protection where the rights are duly protected, trials are fair and efficient and infringers are punished without exception.