Is It In There – CNIPA’s “Phase 1” IP Action Plan?

CNIPA released on April 20, 2020, its  2020-2021 Implementation of the “Opinions on Strengthening the Protection of Intellectual Property” Promotion Plan” (2020—2021年贯彻落实《关于强化知识产权保护的意见》推进计划) (the “Promotion Plan”).  Attached are a copy of the Promotion Plan from the CNIPA website and a machine translation, as well as a bilingual translation provided by the USPTO. All translations are provided for readers’ convenience only, are unofficial and do not carry any representations as to accuracy.  Please review them carefully before commiting to any course of action based on the translation, and please bring any errors to our attention.  We greatly appreciate USPTO,  China Law Translate, and the numerous trade associations and law firms that have made translations publicly available over the years.

The Promotion Plan specifically references and appears to be a further implementation of the CPC/State Council  Opinion on Strengthening the Protection of Intellectual Property, released in November 2019 (关于强化知识产权保护的意见) (CPC/State Council Opinion), which I blogged about here. In November I described this CPC/State Council Opinion as going “part way” in addressing US concerns about IP theft that were being raised by the Trump Administration. This Promotion Plan issued by CNIPA is more comprehensive and more directly reflects the Phase 1 Trade Agreement between the US and China that the CPC/State Council Opinion, including setting specific timetables and interagency responsibilities. However, it is being promulgated at a considerably lower level of governmental authority than the CPC/SC Opinion. CNIPA is a division within a ministry-level agency (SAMR) and is arguably weaker and less independent today than when SIPO was a separate agency. In this respect, the Promotion Plan is also weaker than previous action plans promulgated under MofCOM’s leadership. MofCOM and its predecessor agencies were ministries. In a sense, it harkens back to action plans from the 1990s.  The IPR Leading Group was chaired in the 1990s often by a Vice Minister, including Wu Yi, who later became Vice Premier. One may wonder: is this “déjà vu all over again”?.

Some caution also needs to be maintained in approaching this document. First and foremost, are all the Phase 1 commitments, in the words of a once famous  commercial for spaghetti sauce – “in there”? Please write to me with your observatinons.  A second issue involves CNIPA’s authority. Although this document sets out plans for the courts, procuracy, and legislative branches, Chinese state council government agencies do not have the authority to bind these other branches of government.  Nonetheless, these agencies often coordinate their activities together, including through national and local leading groups and coordinating bodies. The puzzle deepens further, however, as the Promotion Plan itself does not indicate the authority by which it has been enacted. Rumor had been that the Promotion Plan was delayed because NPC approval was needed.

To an experienced reader, this Promotion Plan also has the “look” and “feel” of the National IP Strategy Implementation Plan (NIPS Implementation Plan) with its extensive, specific commitments. I  blogged about the NIPS Implementation Plan here.  The NIPS Implementation Plan has a statutory basis in the China Science and Technology Promotion Law (2007). Moreover, the NIPS Implementation Plan similarly has a focus on China becoming a “strong” IP country.

One difference between a NIPS Implementation Plan and an implementation plan from MofCOM in the past is that a NIPS Implementation Plan would have likely needed more local coordinating entities to be implemented nationwide. MofCOM had such authority through its coordination of the former State Council leading groups on IP.  While serving in the Embassy (2004-2008), I visited many of the local IP coordination offices to discuss local IP coordination and enforcement issues. This plan, if it is to be rolled out locally through new mechanisms, will need the support of the CPC and State Council, or local CNIPA offices, or through other local structures.

Several friends have been asking me this morning if this is the Chinese IPR “Action Plan” as required by the Phase 1 Agreement.  The Phase 1 Agreement provided that “Within 30 working days after the date of entry into force of this Agreement, China will promulgate an Action Plan to strengthen intellectual property protection aimed at promoting its high-quality growth. This Action Plan shall include, but not be limited to, measures that China will take to implement its obligations under this Chapter and the date by which each measure will go into effect.”

On the first review,  this Promotion Plan appears to directly reflect the commitments made by China in the Phase 1 Agreement. What the US has called “high-quality growth” might be its misapprehension of China’s recent mantra of building a “strong IP economy.” There are many action items in the Promotion Plan that are focused on strengthening China’s IP resources. Considering the current pandemic, the timing for the release of the Promotion Plan is also about right. Moreover, it makes sense for China to release this document as part of the flurry of announcements surrounding April 26 (World IP Day). CNIPA releasing this document also does not contradict any explicit commitment in the Phase 1 Agreement. The negotiators of the Phase 1 Agreement did not apparently agree to nominate which Chinese agency would issue the Action Plan.

Based on a quick read, this Promotion Plan also appears to share the same weaknesses of the Phase 1 Agreement, with its selective focus, under-emphasis on the courts, lack of clarity around “patent linkage” (including “artificial infringement” determinations by the courts), continuing emphasis on ministry action plans and administrative enforcement, lack of historical context or data to ensure that the Promotion Plan actually delivers results, “old wine in a new bottle” commitments in Customs, criminal thresholdsd and other areas, and lack of any commitment to increasing administrative and judicial transparency.  The lack of strong commitments to increasing judicial and administrative transparency remains the most troubling of all and makes the agreement difficult for governments and rightsholders to adequately apprehend, including making sure that concrete improvements are not only “in there” but being fully implemented.  If the Phase 1 commitments implemented in the 133 action items of the Promotion Plan are the “Action Plan” it is a further indication that any forthcoming changes in China’s IP regime that arose from the trade war are likely to be significant, but not necessarily the kind of  “structural change” that would dramatically mandate more market reform through less government intervention in China’s IP regime.

A Federal Circuit with Chinese Characteristics? – The Launch of China’s New National Appellate IP Court 中国特色的联邦巡回上诉法院?

wangchuang

On December 27, 2018, the Supreme People’s Court released the Provisions on Certain Issues of the IP Court  (the “Provisions”), and the Standing Committee of the NPC  announced a first round name list of judges of the new IP court. These decisions follow an earlier announcement by the NPC Standing Committee  on October 26, 2018 authorizing the establishing of this new division of the SPC (officially translated as IP  Court of the Supreme Court of SPCIP, with the Chinese name 最高人民法院知识产权法庭). There were also indications that such a court was in the works that were previously reported in this blog in 2017.  The newly established IP Court is intended to function very similarly to the US Court of Appeals for the Federal Circuit, with a national jurisdiction over technical civil IP cases as well as appeals of patent validity decisions. Trademark validity appeals are not currently specifically enumerated as being within the court’s jurisdiction (see photo below).

This is a much awaited, historic and potentially disruptive breakthrough in the China IP litigation system, that has been a focus of much discussion between US and Chinese experts over 20 or more years, notably between the SPC and former CAFC Chief Judge Rader, former USPTO Director Kappos, and others (including the author/owner of this blog).  The historic 2012 conference between the SPC and the CAFC at Renmin University was one such milestone event in these efforts.   China’s successful experiments in specialized IP courts in Beijing, Shanghai and Guangzhou was another such milestone, as well as the language in the third plenum that facilitated their establishment. However, the engagement preceded this decade.  For example, an important conference on specialized IP courts was held with former Chief Judge Jiang Zhipei, and other Chinese IP judges in Washington, DC on Specialized IP courts in 2002, which involved over 130 judicial experts.   SIPO also exerted an important leadership role as well, through the National IP Strategy and various studies and conferences over the years.

The Provisions came into effect January 1, and the new Court held a kick-off ceremony on that same day.   Almost like clockwork, Judge Wang Chuang, the new deputy chief judge of this new tribunal was at the second US-China IP Summit in Shenzhen on January 3, 2019 (the “Summit”) presenting a bilingual PowerPoint (picture above) explaining the role of the Court, along with several other current and former judges, including Judges Jin Kesheng, former Beijing IP Court President Su Chi, former Guangdong IP Tribunal judge Ou Xiuping, former Beijing High Court Judge Cheng Yongshun, and others.  Considering the high-stakes trade dispute and interaction between China and the US right now, it is fair to say that the setup of the SPC’s IP Court is part of the bona fide effort to enhance IP protection in China which in fact predates the trade dispute.

What will be the impact of this court on foreign-related litigation? We believe that the impact is likely to be positive.  US academics have suggested that the CAFC has had a modest effect of correcting any anti-foreign bias  and the elevation of patent appeals to the SPC level is certain to similarly help direct national attention to important cases and defuse local pressure.  Moreover, the jurisdictional mandate of this court includes appeals from the Beijing IP Court of administrative patent cases, where foreigners constitute a significant cohort, partiuclarly if trademark cases are included (which appears unlikely). The Court also includes at least one judge from the foreign civil (no. 4) division of the SPC.   The recent decision by the SPC to rehear the Huawei v Interdigital case, where Zhu Li was a judge, may also be another signal.  Judge Zhu has since transferred to this new IP Tribunal, and the court has also sent a clear signal that it will be seeking a consistent and fair determinations of cases independent of local influence.   Many of the judges on the roster are well known to the foreign IP and antitrust communities, have met with foreign visitors or traveled overseas, and enjoy the respect of the foreign and Chinese bar.

Here are some of the most significant things that we know about this new Court.

Status of the SPC’s IP Court: It is part of the SPC, which generates some confusion. Given that the judgments, rulings, mediations and decisions made by the SPC’s IP Court are in the name of the Supreme Court, it enjoys a similar status to that of CAFC, whose job is to function as a national appellate court and whose decisions. are typically final.  But there has been and still will be an IP Tribunal (also known as 3rd Civil Tribunal) of the SPC, and a decision made by the SPC’s IP Court, which in normal practice should be final, is capable of been filed for retrial before the said IP Tribunal of the SPC.  In addition, non-technical IP cases will still be appealed according to pre-existing procedures ultimately to the 3d Civil Tribunal.

The head of the new SPC’s IP Court, Mr. Luo Dongchuan, will at the same time continue to serve as Deputy Chief Justice of the Supreme Court of the SPC, a rank higher than the head of the 3rd Civil Tribunal, which previously heard all IP cases.  Justice Luo effectively oversees IP litigation in China with Justice Tao Kaiyuan, which is a further elevation of the importance of IP to China’s judicial system.

Staffing the Court:  IP tribunal judges are typically amongst the best educated judges in China’s court system.  Many young judges made their name in IP related trials. The judicial personnel list of the court suggests that the court has been viewed as career enhancing for SPC judges, judges from regional courts, and former patent office examiners who have been selected as judges (see the list below).  However, due to the rapid establishment and staffing of this new Court, many of the judges are likely on detail from their prior jobs to the new Court, pending permanent transfer

Staffing of the Court

Name Position Former position
Luo Dongchuan 罗东川  Vice-president of SPC, Head of the Intellectual Property Court of SPC Vice-president of SPC, member of the Adjudication Committee of SPC,
Wang Chuang王闯 Deputy Chief Judge Deputy Chief Judge of the Civil Division No.3 (IP Division) of SPC
Zhou Xiang 周翔 Deputy Chief Judge Deputy Director General of the Enforcement Bureau of SPC
Li Jian 李剑 Deputy Chief Judge Presiding Judge of the Civil Division No. 3 (IP Division) of SPC
Zhu Li 朱理 Judge Senior Judge of the Civil Division No.3 (IP Division) of SPC
Shen Hongyu 沈红雨 Judge Judge of the Civil Division No.4 of SPC (for foreign-related cases)
Luo Xia 罗霞 Judge Judge of the Administrative Division of SPC
Fu Lei 傅蕾 Judge Judge of the Civil Division No.3 (IP Division) of SPC
Wei Lei 魏磊 Judge Assistant Judge of the Civil Division No.3 (IP Division) of SPC
He Peng 何鹏 Judge Judge of the Civil Division No.3 (IP Division) of SPC
Jiao Yan 焦彦 Judge Deputy Chief Judge of the Civil Division No.3 (IP Division) of Beijing High People’s Court
Cen Hongyu 岑宏宇 Judge Assistant Judge and the Judge of the Civil Division No. 3 (IP Division) of BHPC
Liu Xiaojun 刘晓军 Judge Judge of the Civil Division No. 3 (IP Division) of Beijing High People’s Court
Cui Ning 崔 宁 Judge Judge of Beijing Intellectual Property Court
Deng Zhuo  邓 卓 Judge Judge of Beijing Intellectual Property Court
Ren Xiaolan 任晓兰 Judge Director of the No.1 Chemical Appeal Division of the Patent Reexamination Board of CNIPA
Gao Xue 高 雪 Judge Deputy Director of the Mobile Communicating Technology Appeal Department of the Patent Reexamination Board of CNIPA
Zhan Jingkang 詹靖康 Judge  Deputy Director of the Examination Guide Department of the Examination Management Division of the CNIPA
Xu Yanru 徐燕如 Judge Deputy Chief Judge of the Civil Division No.3 (IP Division) of ZHPC
Xu Zhuobin 徐卓斌 Judge Judge of the Civil Division No.3 (IP Division) of Shanghai High People’s Court
Ling Zongliang 凌宗亮 Judge Judge of the Intellectual Property Division No. 2 of Shanghai Intellectual Property Court
Zhang Xiaoyang 张晓阳 Judge Judge of the Civil Division No. 3 (IP Division) of Jiangsu High People’s Court
Zhang Hongwei 张宏伟 Judge  Judge of the Civil Division No. 3 (IP Division) of Fujian High People’s court
Liu Xiaomei 刘晓梅 Judge  Judge of the Civil Division No. 3 (IP Division) of Shandong High People’s Court
Tong Haichao 童海超 Judge Deputy Chief Judge of the Civil Division No.3 (IP Division) of Hubei High People’s Court
Tang Xiaomei 唐小妹 Judge Judge of the Civil Division No.3 (IP Division) of HHPC
She Zhaoyang 佘朝阳 Judge Judge of Guangzhou Intellectual Property Court

Internet Courts, Circuit Courts, Specialized IP Courts: The types of courts in China has expanded and is potentially confusing to those unfamiliar with the new experiments.  The SPC had already established Circuit Courts, which are arms of the Supreme Court itself, except that they are in cities other than Beijing.  An example of such a court is the Shenzhen Circuit court which hears retrial cases from Guangdong, Guangxi, Hunan, and Hainan as well as cases relating to Hong Kong, Macau and Taiwan.  The Specialized IP Courts, which will remain the same as before, are intermediate courts in Beijing, Shanghai and Jurisdiction, vested with jurisdiction over certain IP lawsuits. They will function all the same as before, but their decision will now be appealable to the SPC’s IP Court, rather than to High Court of the province where the Specialized Courts reside.  These IP Courts are in addition to other local IP tribunals and courts which localities have set up with the support of the SPC and have been experimenting in cross-district jurisdiction, and in combining civil, criminal and administrative adjudication.

The three Internet Courts, located in Beijing, Guangzhou and Hangzhou, will function as before.  Their decisions are not likely to be appealed to the SPC’s IP Court given that the latter only hear patent, mask works, variety of plants, computer software and anti-trust cases.

Standardization of Trial Rules: A mission of the SPC’s IP Court is to formulate judicial standards and trial rules based on their investigation and research of relevant practices, and such standards and rules shall be followed by the lower courts. This may suggest that the SPC’s IP Court will take over the responsibility of formulating certain judicial interpretations and selecting guiding cases. Wang Chuang noted at the Summit that the Court is considering judicial interpretations on such topics as technology assessors and trade secret protection.  Thus, we could expect a more consistent guidance, both procedural and substantive, from the Supreme Court over IP cases, especially when involving technical matters.  Judge Su Chi (retired) of the Beijing IP Court, also noted at the Summit that he expected that some of his work on development of a case law system would likely be taken over by this Court as well.

Extended Jurisdictional Scope of the Court:  The SPC’s IP Court is empowered to hear major and complicated cases of first instance on a national scale. This implies that some plaintiffs may bring high-profile lawsuits to the Supreme Court directly. This kind of arrangement is very rare in China’s judicial system. The only case we are aware of before this time is the trial of the Gang of Four in 1980. This could be good news for patentees facing difficult issues of local protectionism. It may also have profound impacts on society, and thereby raise the IP awareness of the public.  The Federal Circuit had a similar impact on US society when it decided major cases such as Polaroid v Kodak early in its tenure, which in the US signaled “a new period in which patents regained their importance as intellectual property protection for technology companies.”  The SPC’s IP Court will likely have discretion to determine whether a case belongs to a major and complicated one. There are various factors to be taken into consideration, such as the damages claimed, the nature of the subject matter, the parties concerned, the relevant technicality, the social impacts, and so on.  In addition to this area, the court will also retrial cases arising from application by any party of interest and protest by the Supreme Procuratorate as mentioned (Article 2(5) and Article 11 of the Provisions).

For Chinese IP practitioners and regional IP judges this is also a major game changer.  Chinese patent firms that were once focusing on establishing offices throughout China may now need to think about reinforcing their staff in Beijing.  Chinese judges from various localities may also wonder why certain appellate jurisdiction was removed from their courts.  The answer to that last issue likely lies in the desire of the SPC to establish greater uniformity and predictability throughout China in important technology-related IP cases, as was explained at the Summit.

At the Summit, Judge Wang Chuang noted that four goals of this new court are: boosting technological innovation; testing fields of judicial reform; being a bellwether for patent trials and becoming a preferred court for international patent litigation.  These goals are laudable, not surprising, consistent with the current directions of judicial reform and can help inspire confidence of the foreign business community.  In view of the goal of increasing China’s role as a center for international IP litigation, it is not surprising that so many judges attended the Summit.

In all, the establishment of the SPC’s IP Court is exciting news in Chinese IP community.

Written by Mark Cohen, Harry Fang 方春晖, Steve Song 宋献涛 and Jerry Liu 刘良勇attorneys with the Deheng law firm北京德和衡律师事务所.

Mark Cohen excercised final editorial control and is responsible for any errors. Photograph of Judge Wang Chuang  by Mark Cohen from the Summit.  All rights reserved.

Please write in with your observations on this important development!

flowchartofnewcourt
Updated January 8, 2019 to clarify uncertainty over jurisdiction over trademark administrative appeals, and on January 9 to add a photo of the flow chart for litigation from the Summit which does not include trademarks  (above).

Survey on China’s “National Intellectual Property Strategy”

TianNIPS

SIPO is conducting a survey to coincide with the 10th anniversary of the Outline of the National Intellectual Property Strategy” , which was issued in June 2008.   The online survey is available here.

When the first National IP Strategy was being drafted, I had the pleasure of discussing concerns with the former Director General of the Law and Treaties Division of SIPO, Yin Xintian (尹新天), attending two meetings/hearings on the NIPS, including one involving outside experts (February 28, 2006) and another involving diplomats, and attending a meeting with then Secretary Carlos Gutierrez and SIPO Commisioner Tian Lipu to discuss the implementation of the NIPS (see picture above, March 29, 2006).

The NIPS introduced many important IP-related reforms in China, some of which are still under development.  I  advocated for the creation of a specialized appellate IP Court at the “experts hearing,” where I recall I was the only foreigner.  I noted at that time that there was a “need to concentrate expertise in more complicated patent cases to insure they are more efficiently and effectively handled.“  Regarding substantive IP matters, I noted that “In the patent area … a robust patent linkage system also could help improve enforcement for pharmaceutical patents by providing advance notice to prospective generic manufacturers through denial of regulatory approval until relevant patents have expired, been invalidated or otherwise have been determined to not be infringed.”  The prospects for both a specialized IP court and patent linkage have indeed improved significantly in recent years.

With SIPO’s expanded role of examining trademarks and geographical indications in the government restructuring, as well as it being co-housed with antimonopoly/unfair competition (trade secret)  and food and drug agencies, the NIPS may be even more important in both articulating policies and implementing them.

Here are some prior postings on the NIPS: “Outline of the National Intellectual Property Strategy” ; “National IP Strategy Action Plan” and  “Action Plan for Further Implementation of the National IP Strategy (2014-2020)” .  Another document that might be helpful is the “State Council Decision on Intellectual Property Strategy for China as a Strong IP Country (in Chinese).”  This website of the National IP Strategy Office is http://www.nipso.gov.cn.

This survey request is being posted on behalf of  Intellectual Property Publishing House.  Commentary is by Mark A. Cohen.

Picture Source:
 http://www.sipo.gov.cn/gk/ndbg/2006/201310/t20131025_859773.html