Other perspectives on Apple/Proview

Last week, we had a group of Chinese IP officials visiting Fordham – from Chinese Customs, a local Administration for Industry and Commerce and the Supreme People’s Procuratorate  – it was a perfect combination of officials to ask about the Apple / Proview case from the perspective of different Chinese government agencies, other than the courts. Continue reading

“Case Filing” In China’s Courts and Their Impact on IP Cases

In my experience over the past decade and in talking to local IP courts in China, the IPR judges have for the most part been very forthcoming, knowledgeable and engaging.  However, their colleagues in the Case Filing Division (立案庭) (“CFD”) have operated in a much more opaque way, typically not willing to meet at all, despite their playing a critical role in certain WTO / TRIPS obligations of China, such as granting/denying preliminary injunctions, and preliminary evidence or asset preservation measures (“provisional measures”) (TRIPS Art. 50).  The CFD of a court is more than a court clerk or docketing officer, the CFD actually operates to accept or deny cases, typically without handing down written decisions of any kind.

The opaque nature of the CFD was highlighted more generally in some recent postings on China Law Net, hosted by Prof. Don Clarke.  Dr. Liu Nanping and Michelle Liu recently authored an article on the significance of the CFD.[1]  The article argues, generally without the benefit of the much smaller quantity of data from IPR-related cases, that a right to justice can often be taken away by the CFD before ever reaching the courtroom for trial. In theory, the CFD was designed to filter disputes for resolution through other channels, thereby limiting the judges’ power and controlling court jurisdiction.  In practice, however, it has been found that the division often abuses its discretion, including by pushing off controversial cases.  The authors point out that the CFD rejects cases that should have passed the initial threshold and leaves litigants with reduced channels to pursue justice.

Case filing became especially important after China joined the WTO, as decisions on provisional IP civil measures are initially sent to this division.   As China does not yet afford these provisional measures in other civil cases, the experience of the CFD in handling these matters was likely limited or non-existent before WTO accession.  Regrettably, the statistics to date show only a limited number of these measures actually being made available to rights holders, and call into question whether use of the CFD is the optimal means for China to fully make this right available to litigants.

China’s statistics in this area are confusing:  they show a high “grant” rate of accepted cases involving provisional measures – but they don’t reveal how many cases were rejected by the CFD, since such cases were deemed to have never been “filed”.  This “pre-screening”, I believe, contributes to the high grant rate. A more revealing data point is made by comparing the numbers of such provisional measure cases with the total number of IP cases filed.  The incidence of such cases is very low, most likely because the cases never appear on the docket.   If one were to look at the grant rates alone, one might think that China had particularly robust preliminary injunctions in all IP rights.  In 2009, 85.42% of pre-trial preliminary injunction applications admitted in IP cases were granted.  The number is especially striking because in US practice, preliminary injunctions for patents are rarely granted.  China also showed even higher grant rates for other provisional measures: 98.72% of admitted applications for pre-trial preservation of evidence were granted and 100% of admitted applications for pre-trial preservation of property were granted. In 2010, the grant rates for these provisional measures were 89.74% for preliminary injunction applications, 97.46% of preservation of evidence applications, and 97.41% for preservation of property applications.

A more revealing data point is made by comparing the numbers of such provisional measure cases with the total number of IP cases filed.  In 2009, there were 59 pre-trial preliminary injunction applications, 237 pre-trial preservation of evidence applications, and 56 pre-trial asset preservation applications admitted amongst a total of 30,626 IP-related civil cases admitted at first instance. In 2010, 55 pre-trial preliminary injunction applications, 294 pre-trial preservation of evidence applications, 126 pre-trial asset preservation applications were admitted amongst a total of 42,931 IP-related civil cases admitted at first instance. The high grant rate undercuts the reliability of the overall data: if preliminary injunctions, evidence and asset preservation measures were so readily available, why then did only 0.12% of the civil IPR cases “request” preliminary injunctions, 0.68% of the cases involve evidence preservation, and 0.29% of the cases request asset preservation?

If one compares China to the United States, the rate of grants is likely higher than that of the U.S. for similar types of motions, but the actual number of cases considered by judges is dramatically lower. Moreover, if US experience is a guide, one would expect different grant rates for different types of provisional measures, depending in part on the right being asserted and the context of the case.  Preliminary injunctions in patents are likely to be rare, because of the technical difficulties in adjudicating patent cases and the hardship that might be imposed on an industry if the preliminary injunction was improperly granted.  For example, in the US, traditionally the likelihood of winning of a plaintiff winning in a patent case were 51.45%, versus 85% in trademarks and 75% in copyright.  Patent cases are also generally more complex to adjudicate, making them less amenable to preliminary injunctive relief.  According to one database, patent cases last 417 days on average, compared to 265 for trademark and 331 for copyright.  Because of the significant potential impact on an industry if a patent injunction were granted, injunction rates for final judgments were 30% for patents, versus 48% for trademarks and 21% for copyright (this data was based of FY 2000 data, from a now-defunct database run by Cornell University).  The mean award for patents is $1,759,345, while that of trademark cases is $484,428 and copyright was $837,525.

This U.S. data shows that patents, copyright, and trademark cases are not equal in damages, the length of time to adjudicate or availability of injunctive relief. In China, based on data from http://www.Ciela.cn, in 2008, the average damage award for patent, copyright, and trademark cases were 402,277 RMB, 17,912 RMB, and 88,444 RMB respectively; the duration for the respective types of cases were 8 months, 5 months and 6 months; injunction rates were 74%, 69%, and 85%.  Taken together, these indicate that there are major differences in damages and relief based on right and type of right at stake, which is to be predicted based on the nature of the right and the experience of other countries such as the United States.

It is likely that all types of provisional evidence and asset preservation measures for trademarks and copyrights should be higher, particularly as a remedy to dealing with commercial scale or willful infringement in China, and also because of the difficulties parties have in otherwise obtaining evidence from their adversary due to an absence of discovery-type procedures.  Unfortunately, China often comingles provisional measure data for all rights, making it impossible to determine if China is more readily granting those forms of relief in cases where it is more necessary, or more easily adjudicated.   This lack of distinction adds to the difficulties of evaluating the opaque CFD.

Preliminary evidence preservation measures can be especially critical when evidence is ephemeral, such as in the on-line environment.  Considering the rapid increase of civil copyright cases, the high incidence of on-line copyright cases in China today, as well as the lack of discovery type procedures for all civil cases in China, one would expect a very high incidence of preliminary evidence preservation measure requests and grants.

Apart from the opacity of the case establish division, there are potentially other explanations. Victims wanting a quick remedy, including preservation of evidence, may file administrative trademark or copyright cases.  Administrative agencies can also issue orders stopping infringement, which are enforceable in their administrative district.  These administrative remedies may decrease the burden on the civil courts to seize assets.  In the United States, first amendment rights may also limit the desire of courts to grant injunctions, and instead favor higher damage awards.  Another explanation is that the unclear division in China between when civil and criminal remedies may also drive rights holders to use criminal remedies in appropriate circumstances, as the police can seize evidence even more effectively than the courts. This has been the developing trend in trade secret cases, where lack of discovery proceedings and the need for expeditious action, frequently drive rights holders to use a criminal remedy when a civil remedy might have been adequate for similar actions in the United States.

Another observation that may be drawn from this data is that IPR cases offer a useful window with which to view other general rule of law developments in China.  The transparency and enforcement obligations in TRIPS and other agreements can especially help to drive reform in other areas as well.  Where civil IPR remedies and the enforcement obligations in TRIPS help to establish international standards for their fair and equitable adjudication, such standards might help lift to the standard for all litigants.

Updated: June 29, 2018 with minor typographical changes.


[1] Nanping Liu & Michelle Liu, Justice Without Judges: The Case Filing Division in the People’s Republic of China, 17 U.C. Davis J. Int’l L. & Pol’y 283 (2011)

Indigenous Innovation in the Chongqing Police Department

The cloud of mystery surrounding Bo Xilai and his former deputy, police chief Wang Lijun continues to loom over the Chinese and western press, with many unresolved questions concerning the circumstances of Wang’s appearance before the US consulate, and the current circumstances of Bo himself. Not many would have expected any discussion of intellectual property to enter the picture. However, Bo himself did have some engagement on IP issues. He was known during his time as Minister of Commerce for taking a strong negotiating position against US pressure on IP matters. In addition, his agency did serve as a point of contact and organizing ministry for a national IPR campaign. When I served in the US Embassy, I had lunch with Bo once, during an Ambassador’s IPR Roundtable, where he showed very little interest in the issue. His speech is briefly described in a Wikileaks cable. Continue reading

Explosive Litigation Growth Continues in IP in China

Every year, at the time of the National Peoples Congress, the Supreme People’s Court and Supreme People’s Procuratorate report on IP developments.  Usually, the data is sketchy and must wait until the end of April, during IPR week (around April 26). Here’s what we know so far:  According to the speech given by ShengJun Wang, the president of the SPC, in 2011, the courts at all level concluded a total of 66,000 cases of first instance Intellectual property, which grew by 37.7% over the same period of last year.

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Apple and Michael Jordan draw interest in Chinese Trademark Law

As the mainstream media in the United States continue to pick up on the few ongoing trademark disputes in China, the attention to foreign companies’ trademark troubles build. In an effort to have a constructive overview, the AP collected comments from a number of experts, including Professor Cohen. The article was published today and has been distributed by a number of outlets. We hope that there will be more productive and objective coverage like this.

The Proview and Apple Controversy – An Increasingly Tangled Web

The ongoing trademark dispute between Proview and Apple, which has now reached Apple’s home state of California, continues to draw attention around the world.  A court in Pudong, Shanghai refused to grant the injunction against sales of iPads, while Huizhou intermediate court has granted such an injunction. An appeal from the first judicial decision from the Shenzhen Intermediate People’s Court, which was adverse to Apple, to the Higher People’s Court of Guangzhou has just been heard, a ruling at this level is usually final in China. The Chinese central government has, thus far, properly abstained from declaring a position in this dispute and it is too early to tell whether Supreme People’s Court will hear a further appeal.

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