Justice Tao Kaiyuan and the Role of the Judiciary

MadameTaoMichelleLee

Justice Tao Kaiyuan of the Supreme People’s Court, who had been to the United States in 2015 delivering important speeches on rule of law, has recently published an article on “Giving Full Play to the Leading Role of Judicial Protection of IP Rights“ 充分发挥司法保护知识产权的主导作用”(Dec. 31, 2015).  The article is receiving considerable attention in China, as it was published by Qiu Shi, 求是(“Seeking Truth”), a bimonthly political theory published by the Central Party School and the Central Committee of the Communist Party of China.  The publication of the article appears to be timed with the release of the recent draft of the Patent Law Amendments, comments for which were due the day after publication (January 1).  The proposed patent amendments would strengthen the role of administrative agencies in IP enforcement, to the possible detriment of the judiciary.

The author of the article is no less important than its contents.  Madame Tao knows patents.  She was the former Director General of the Guangdong Patent Office and therefor once had “vertical” reporting responsibility to SIPO (see picture above taken by me of Madame Tao [on the right] with USPTO Director Michelle Lee taken in 2015).  Although the article was authored in her name, many in China were speculating that the article was approved by higher authorities – perhaps Zhou Qiang, the President of the Supreme People’s Court, with Madame Tao serving as an appropriate messenger.

The concerns about this draft on patent law enforcement are not that different from those in the earlier (2012) draft when I blogged in “Why the Proposed Amendments to the Patent Law Really Matter … and Maybe Not Just For Patents” that “the changes strike me as a rather sudden about face in China’s march towards better civil protection of IP.” Madame Tao takes this several steps further.

Madame Tao’s article is divided into three parts: (1) The important meaning of giving full play to the leading role of the judicial protection of IP rights; (2) The key factors that constrain the leading use role of judicial protection of IP; and (3) Key measures in giving full play to the leading role of judicial protection of IP rights.   Here are some of the points she makes:

Madame Tao refers back to the National IP Strategy and related documents, such as the Third Plenum, the NPC’s decision to establish IP courts, and the Action Plan for the National IP Strategy to underscore the well-established, leading role of the courts in enforcing IP.

Her article compares certain key elements of judicial protection versus administrative protection.  In her view, judicial enforcement can curtail abuses of administrative enforcement.  It also has other advantages.  It has clear rules.  It is transparent.  It can help establish guidance for businesses by establishing clear standards for similar disputes (a possible nod to efforts at developing case law/guiding cases).  Moreover, civil enforcement comports with notions of private ownership and the development of markets and creation of a fair competitive environment in China.  Madame Tao especially underscores the role of the courts in supervising administrative agencies.  As I have noted, this is also an important part of the foreign IP docket in China.  Madame Tao states that the judiciary should also actively guide administrative law enforcement in investigation and review of evidence, and determination of infringements.

Madame Tao also calls for greater coordination in administrative and judicial roles in IP protection, noting that administrative enforcement played an important leading role in the beginning of China’s IP enforcement environment.  Administrative enforcement has “in a short time met the need for building effective IP protection.”  However, the “growing maturity” of the judicial system has caused increasing problems in the coordination process.

Madame Tao also calls for specific policy initiatives, many of which are already underway.  She calls for greater deterrent civil damages, including by revising patent, copyright and unfair competition laws based on experience of the trademark law revisions.   She also suggests that a discovery system should be considered.  Civil and criminal divisions in IP should be unified.  She suggests that a specialized national IP court should be researched and promoted, and she calls for the unification of technical appellate cases, perhaps like the CAFC.  She also notes that the division between infringement and validity determinations in the courts in patents and trademarks should be addressed, and calls for improvements in the availability of provisional measures.

She calls for greater improvements in judicial protective measures, including in obtaining evidence and the convenience and effectiveness of remedies.  Among other specific judicial reforms, she also suggests exploring intellectual property case law, improving judicial accountability and developing judicial professionalism.  Finally, Madame Tao also calls for expanding international awareness by IP judges to better protect national interests and to increase China’s IP influence.

Altogether, a tour de force.

Here’s what her speech looks like in a machine-translated wordcloud:taowordcloud

 

 

 

SPC’s Annual Report Gives A Passing Nod to IP

SPC President Zhou Qiang issued his 2015 Report on the Work of the the Supreme People’s Court to the National People’s Congress recently, and IP didn’t get much of coverage. However the IP cases continued to climb – by about 10%.  More data is usually released around April 26 – World IP Day.

The principle paragraph devoted to IP, which curiously links IP to antimonopoly law is:

加大知识产权司法保护力度。  依法制裁侵犯知识产权和制售假冒伪劣商品行为,维护公平竞争的市场秩序,保护知识产权,促进创新驱动发展。  各级法院审结一审知识产权案件11万件,同比上升10%。  审结奇虎与腾讯公司涉不正当竞争案和垄断案,促进规范互联网领域竞争秩序。 

”Increase judicial protection of intellectual property rights. Sanction IPR infringement and selling counterfeit and shoddy goods according to law, and maintain fair and competitive market order and protect intellectual property rights, and promote innovation-driven development. Each level of IPR courts of first instance concluded a total of 110,000 cases last year, which was an increase of 10% over the prior year. We concluded the case involving Qihoo and Tencent involving unfair competition and monopoly, and promoted order in the area of Internet competition.”

In addition, President Zhou noted amongst the year’s accomplishments:

设立知识产权法院。  根据全国人大常委会的决定,在北京、上海、广州设立知识产权法院,审理知识产权民事和行政案件,落实国家知识产权战略,发挥司法保护知识产权的重要作用.

“Establishment of IP courts. According to the decision of the NPC Standing Committee, we set up intellectual property courts in Beijing, Shanghai and Guangzhou to hear civil and administrative cases of intellectual property rights, to implement the national intellectual property strategy, and play an important role in the judicial protection of intellectual property.”

Another interesting element: China handled 2,872,000 commercial cases last year, of which only 5,804 involved foreigners. In addition, the Chinese courts handled 6,014 cases of international judicial assistance. It appears that foreigners in all areas continue to play a relatively small role in China’s commercial litigation.

Susan Finder did an excellent blog on the report: “Supreme People’s Court president says court reforms in “deep water area.”

Update on Specialized IP Courts

 

Tongji

There are a number of developments in China’s efforts to roll out China’s three new specialized IP courts by the end of the year.  Information is being shared at conferences, via weibo (microblog) postings, emails and other media – along with lots of friendly speculation. Here’s our current summation:

Background: On August 31, 2014, the NPC’s Standing Committee enacted a decision to establishing specialized IP courts in Beijing, Shanghai and Guanghou.  These courts are intended to be a three year experiment in adjudicating technologically complex cases.  I have previously blogged about this issue on two separate occasions, while other commentators such as He Jing have also offered their analysis.

The roll out of the courts have now entered into a less theoretical stage of implementation.  In addition, other developments, such as the recently concluded Fourth Plenum also influences our understanding of what is going on in this important area, and the potential impact of this experiment on other legal reforms.

At a conference on October 25 that I attended at Tongji University (photo above),  IPR Tribunal Deputy Chief Judge Jin Kesheng 金克胜 updated a large crowd of academics, officials, lawyers and students on how the court was going to develop. . Judge Jin had a long experience as a legal academic, and has often commented on the relationship between IP and other legal developments.

He noted that the SPC is actively drafting a judicial interpretation on the jurisdiction of the courts.   He stated that the three specialized IP courts will adjudicate both first and second instance cases.  They will also adjudicate both civil and administrative matters. Current “three in one” adjudication experiments (combining civil, criminal and administrative jurisdiction) will be largely unaffected.   He referred to the Foruth Plenum several times, and pointed out that the pilot in cross-region jurisdiction in specialized IPR court is a pilot for the future court’s reform in cross-region jurisdiction on other subject matters.

In terms of subject matter jurisdiction, he specifically mentioned that antimonopoly law cases and well-known trademark cases will also be under the jurisdiction of the specialized IPR courts.

Regarding court administration, Judge Jin noted that judges in the specialized IP courts will be higher paid, which is attracting interest from other judges.  He also expected that the courts would have an impact on the professionalism and expertise of the judiciary in IP cases, which is already relatively high.

In the past the courts have used experts, such as examiners from SIPO to assist in technologically complex matters.  In the future, technology experts (技术调查官) will serve as the assistant to the judge. In fact these technology experts are set to be included in the Beijing Specialized IP Court launch, which will take place in the first half of November.   Jin cautioned, however, that judges should avoid replying on the technology experts exclusively.

Jin acknowledged the disappointment many observers had that the NPC had not authorized establishment of a national appellate IP court, such as the CAFC, but had instead decided to establish a pilot project involving intermediate level courts.  The views of several prominent academics were conveyed at a meeting of the Legal Affairs Committee of the NPC on August 7.   Some academics urged a specialized IP court like the CAFC to break the problem of territoriality in IP adjudication while others urged that this court should set the standard for a national appellate court. Judge Jin nonetheless believed that the specialized IP courts are a milestone in China’s IP and legal reforms.

What will be the impact of this self-described experiment? In terms of size of their docket, Guangdong has by far the largest docket. Beijing is second and Shanghai is last. Guangdong is about twice the size of Beijing, and Beijing is a bit more than twice the size of Shanghai.  Beijing, however, has the oversized docket of foreign-related cases and administrative cases. Guangdong has the biggest size and population and its experiment in setting up a provincial level intermediate court could be an important precedent for IP and non-IP related jurisdictional experiments.  The loss of jurisdiction of Shenzhen and other important cities in Guangdong over patent, trade secret and AML matters is likely a significant concern to tech companies there.

Beijing’s continuing role in administrative litigation means that Beijing would be a natural venue for a national appellate IP court, such as the CAFC. Shanghai, with the smallest docket and a relatively modest foreign related docket compared to Beijing may appear to have the least “experimental value.”  However, Shanghai brings several important developments to the table. First it is the home to a large and active foreign business community and an active R&D community, especially in the life sciences. Second, it is home to the important foreign trade zone pilot project, with its own IP tribunal. Third and not least, Shanghai is the home to the Chinese Courts International Exchanges Base for Judicial Protection of Intellectual Property Rights (中国法院知识产权司法保护国际交流(上海)基地) which was opened on September 25, and promises to support a wide range of IPR judicial exchanges and educational efforts.   Since foreigners file more cases in Beijing, the Shanghai IP court will need to work hard to attract IP litigation from Beijing, particularly since the Beijing IP court is likely to continue to have a large foreign-related docket with its jurisdiction over the patent and trademark offices.

The Beijing court has already been sighted by one microblogger, and a picture is available on line: http://www.weibo.com/136766637#_rnd1414651625018.   There have also been numerous postings, emails and rumors about assignments of judges – which I will decline to repeat here. In any event, it is only a matter of weeks before those appointments are officially disclosed.

Prof. Don Clarke in his recent blog on the recently concluded Fourth Plenum noted that there is a proposal to establish courts “that will cross jurisdictional boundaries, again to try cases that are in some sense cross-jurisdictional. Such a proposal would require legislative and possibly constitutional amendments.” The IP courts are part of that initial experiment.    Judge Jin referred to other specialized IP courts and cross boundary proposals, such as in labor and childrens courts. In another related development, Judge Jin also noted that the specialized IP courts will have higher paid, more professional judges – a development consistent with the Fourth Plenum.   –

In sum, these new courts are are a part of the continuing effort to “cross the rule of law river by feeling the IP stones.”