Views from the Bench——for Special Judges Panel Discussion

Jiang Zhipei PhD, Professor, Senior Advisor and former Supreme Court Justice

Good morning ladies and gentlemen (everyone),

Thanks for GFIP’s invitation, giving me this opportunity to meet my old friends and find some new ones.  It’s a great pleasure to be here today to share with you some latest IP developments and practices in China.

I      First of all, to review the latest development of IP in China, let’s see some statistical data.

In 2010, from January to November, the total number of IPR cases for 1st instance trail was 39,913 of those there were 5,273 patent cases, 23,304 copyright cases, and 7,617 trademark cases.  Among these, the Courts concluded 1,057 cases concerning foreigners or foreign companies, 2.4% more than 2009.

Let’s see this chart.  The number of cases is steadily increasing in China.

Now we can see that more and more enterprises, institutions and even individuals are relying on court trials to resolve IPR disputes.  It can also be seen that the number of IPR cases has a rising trend even under the backdrop of the global financial crisis and economic slowdown.  The steady and rapid increase of the IP litigation cases shows that, the judicial protection of IP in China has played a leading role in the whole IP protection system, and it also shows that the judicial protection for IPR in China has gained the society’s widespread trust and full recognition.

II    Secondly let me introduce the new trends of IP legislation in China.

Patent Regime

New legislation was promulgated in 2010 following the third revision of the PRC Patent Law ("New Patent Law").  "Matching rules" will affect the initiative of patent right holders in patent infringement actions in China.  

These new legislation includes the Interpretation on the Application of Law Concerning Several Issues in Handling Patent Infringement Disputes ("Interpretation") (effected on 1 January 2010) published by the Supreme People's Court, and more importantly, the revisions of the Rules for the Implementation of the Patent Law of PRC ("Implementation Rules") (effected on 1 February 2010).

1.      Interpretation

The Interpretation had been under preparation for several years, and the public was provided with numerous opportunities to comment on drafts since 2003.  I have offered some personal comments in the preparation.

Many provisions in the Interpretation are critical for parties in the patent litigation in Chinese courts. The most important ones are as   follow:

Ÿ           Claim construction, including the importance of specifications, drawings and reference materials, as well as means-plus-function claims and estoppels;

Ÿ           Infringement determinations, including the doctrine of literal infringement;

Ÿ           Design patent protection, including the criteria of similarity and the ordinary consumer standard;

Ÿ           Calculations of damages, including the infringer profits standard;

Ÿ           Declaratory actions for non-infringement; and

Ÿ           Defenses based on prior art or prior use.

2.      Implementation Rules

The revised Implementation Rules provide detailed explanations and specifications to smooth the implementation of the New Patent Law.

The following key rules need to be noted:

Ÿ           Inventor or designer’s financial reward;

Ÿ           Genetic resources; and

Ÿ           Compulsory license.

National Meeting on IP Protection

The State Council issued an action plan to crack down on IPR infringement and counterfeit products as part of a national campaign that will last for half a year beginning from the end of October 2010.

The principal task of this action is to protect copyrights, trademark rights, patent rights and plant variety rights.  It focus on areas like the product manufacturing concentration areas, product distribution centers, and the areas where IP infringement frequently occur, industries like the Press Publishing Industry, Culture Entertainment Industry, High-tech Industry and the Agriculture, and objects like books, audiovisual products, software, bulk export commodities, auto parts, mobile phones, drugs, seeds.

To supervise the crackdown action, the State Council has set up a leading group led by Vice Premier Wang Qishan.  Members of the group include senior officials from China's ministries and administrations.

In order to take the action plan, corresponding regulations and plans have been worked out by government departments, including the State Intellectual Property Bureau, the State Administration for Industry and Commerce, the Customs, the State Broadcasting Film and Television Administration, the State Food and Drug Administration, the Quality Control Bureau, and etc.  Provincial governments have also taken active roles in this action, laying out their own province IP protection plans.

In the national meeting, Wen said authorities should target root causes of IPR violations; strengthen IPR protection especially with regard to Internet use.

Internet IP Protection Interpretation Preparation

With the development of the Internet and the rapid technological growth, there are more and more IP infringements on the net, which are complicated and disputable.  The Supreme People’s Court is now conducting widely research on these issues and trying to draft a new Internet IP protection interpretation.

Opinion on Trademark Protection

The Trademark Law of the People’s Republic of China (1982) has gone through two major amendments in the past two decades.  The latest amendment was adopted on October 27, 2001.  On April 20, 2010, the Supreme People’s Court issued the Opinions of the Supreme People's Court on Several Issues Relating to Trials of Administrative Cases Concerning the Grant and Confirmation of Trademark Rights (hereafter “the Opinion”) to provide more guidance and clarification in this area.

The Opinion includes twenty paragraphs, covering a wide range of issues including: trademark rejection, trademark opposition, trademark disputes, trademark cancellation and trademark registration by agents.  The Opinion draws a distinction between trademarks that have been extensively used and those that have not.  It seems that the former will enjoy higher protection.  The opinion also elaborates on the definition of a number of terms, including “exaggeration and fraud” and “distinctiveness.”

III   Last but not the least, I would like to share with you some of my comments on the future developments.

With the advancement of reform and opening-up, China gradually established and perfected its IPR system.  The country continually launched special campaigns on IP protection, constituted and implemented the outline of national IP strategy and developed international cooperation on IPR issues.  As a result, China made notable progress in IPR protection, which aroused the innovation enthusiasm of the whole society.  However, it has to be clearly understood that the IPR protection in China does not meet the requirements of in-depth reform and opening-up and the construction of innovation-based country.  Besides, infringement and piracy, the manufacture and sales of counterfeiting goods in some regions and sectors are quite serious.  China should pay more attention to the serious issues concerning IPR protection and earnestly cracked those hard nuts in order to lift IPR protection work to a higher level.

China should persist in the guideline of creation and encouraging scientific management, focusing on the special campaigns on the crackdown of   IPR infringement to thoroughly promote IPR protection work.  

IP judicial protection directly relates to the development of economics, technology and culture.  Technology innovation, market development and culture prosperity raises new tasks to IP judicial protection.  The international financial crisis nowadays also raises new challenge to IP judicial protection.  In order to deal with  these new issues and challenges, the following aspects of work should  be the focus of Chinese courts：

1.    Firstly, keep on enhancing the Strength of IP Judicial Protection

Improving IP protection, enhancing IP innovation, usage and management is very important to promote technology innovation and keep the development of economy.  History shows that economic crisis is usually accompanied with science and technology revolution, which becomes the essential engine for the next economic development and prosperity.  The Chinese court will protect the legitimate rights and interests of IP owners and consumers, which makes enterprises to have innovation motive, individuals to have creative passion and society to have creativity energy.

2.    Secondly, explore how to perfect the IP Judicial System

A Reasonable IP judicial system is very important to effectively protect IP right and the interests of IP right owners.  The Chinese court should actively explore and perfect the IP judicial system, realize uniform and high efficient IP judicial protection according to the Compendium of China National IP Strategy.  The practice proves that establishing specialized IP tribunal in the people’s court agrees with the Chinese judicial system, benefits and guarantees the judgment quality of IP cases, training persons for IP judgment and accumulating judgment experience.  Sticking to the said basic method, Chinese courts will continue to explore to establish specialized IP tribunals gathering civil, administrative and criminal cases together, and to integrate and optimize judicial resources.  The court should also thoroughly study the feasibility and necessity to establish IP appeal court according to the requirement of perfecting the IP appeal procedure, gradually realizing the efficient connection between IP right confirmation and infringement litigation procedures, actively promoting the simplification of patent and trademark confirmation and granting, as well as study the transformation of patent invalidation and trademark appeal organizations to quasi judicial organizations.

In the judicial reform of China, we are paying more attention to the transparency of judicial enforcement, the honesty of judicial adjudication, and the communication between judicial institutions and civilians.  We are also creating a more attractive environment for the development of enterprises during the global financial crisis.

3.   Thirdly, continue the strengthen of judicial interpretation

Issuing judicial interpretations is the right and responsibility granted to the Supreme Court by the law.  Judicial interpretations in China shall be applied to China’s courts in all levels.  The Supreme Court will explore new questions about IP judicial protection according to the economics and technology development based on the requirement of IP judicial protection.  It can guide the judicial work by issuing judicial interpretations in time and make efforts to unify the judicial standard. 

In the next few years, the Supreme Court will further establish and perfect relevant litigation procedures such as judicial IP authentication, expert witness, technical investigation and interim measures before litigation etc.

The improvements and developments of the intellectual property protection system will provide a sound legal environment for the stable and rapid economic development of China, and such improvements and developments will also provide positive influences on the economic development and intellectual property protections for other countries around the world.

Thank you so much for your attention.