Second Annual Berkeley-Tsinghua Transnational IP Litigation Conference Is Fast Approaching

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Berkeley Law and Tsinghua law will be co-hosting their Second Annual Conference on Transnational IP Litigation, at the campus of UC Berkeley on October 22, 2019.  Details, including registration information, are available here.

The program will look at strategic concerns in many of the hot issues in cross-border US-China IP litigation, including trade secret cases, standards-essential patents, whether foreigners “win” in each other’s jurisdictions, Section 337, criminal cases, on-line enforcement, civil litigation and the role of China’s new IP courts, administrative challenges to validity, forum non conveniens claims, enforcement at trade fairs, and other issues.  Please register soon if you are interested in attending.

We have great speakers and we look forward to having a great audience!

China’s “Naked Bolar” and the Tapering Momentum to Protect Innovative Pharmaceuticals

There have been several important developments in recent weeks involving pharmaceutical IP protection in both mainland China and Taiwan.  Based on these developments, mainland China appears to be slowing its momentum to afford better IP protection to innovative pharmaceutical products (perhaps as a negotiating position in the Trade War), while Taiwan is pursuing a more protective approach.

On August 26, 2019, China’s National People’s Congress adopted the new Drug Administration Law (“DAL”), which will take effect on December 1, 2019. The DAL was passed after almost two years of review and deliberation.  The legislative history is set forth in the  NPC Observer.    The new law addresses some important issues involving counterfeit and substandard medicines.  However, it does little to improve the IP regime for innovative medicines.

As noted in this blog, there had been expectations that certain IP issues such as patent linkage and regulatory data protection might be reflected in the DAL and especially pending IP legislation.  In the latest draft of the Chinese Patent Laws presented to the State Council in December 2018, no detailed improvement mechanisms of the patent examination/granting system were included with respect to pharmaceutical patents were included.   It was hoped that a linkage system would emerge as part of a package of legal reforms to resolve the US-China trade war or to implement as earlier CFDA policy decision.

China has long adopted one small part of a modern IP/regulatory approval mechanism to encourage its generic sector.  China’s “Bolar Exemption” which was incorporated into the 2008 Patent Law amendments (Article 69), exempts from infringement producing, using, or importing patented drugs or patented medical apparatus and instruments, for the purpose of providing the information required for administrative examination and approval.   This type of Bolar Exemption has often been called a “naked Bolar exemption” as it provides for the erosion of the innovator’s patent rights to exempt from infringement research to introduce competing generic drugs.  It is “naked” as it it does not compensate the innovator for the losses of the patent term caused by this exemption nor for the resultant instability to any marketing exclusivity the innovator may face by reason of accelerated challenges to the patents it holds.   One way of compensating the innovator for such erosion of the term is to extend it on the “back end”  before its expiration.  A 2019 draft of the patent law amendments sought to correct this lack of a patent term extension.  Another way of providing for greater stability would be establishing a patent linkage regime which “links” marketing authorization with patents that read on the relevant pharmaceutical product or successful challenges to its exclusivity.

The current naked Bolar regime has several adverse consequences. The most obvious and significant is that it does not provide legal support for approval and marketing of generic drugs that are proven not to infringe an innovator’s patent rights, as a “patent linkage” regime might.   A Bolar exemption only addresses research intended to support regulatory approval and is not an exemption from infringement.  To the extent that Chinese regulatory authorities may be relying on the Bolar exemption to approve the marketing of infringing generics, such an effort is legally misguided.  A naked Bolar is not a substitute for an IP and regulatory regime that balances the needs of generics and innovators.  As Amcham noted in its comments on the original Bolar exception provision: “Effective IP protection for pharmaceutical products requires notice, transparency, and time to resolve legal issues prior to the approval of a generic product.” Such protections are not afforded under the existing regime and could be with an effective linkage regime.

Another adverse consequence is that it erodes the term of the patentee without the kind of bargaining that went into the US Bolar exemption, creating a kind of sui generis exemption from infringement for additional acts of research to facilitate product introduction which is not otherwise permitted under the patent law.  To the extent that the naked Bolar expands research exemptions to production and warehousing of an infringing generic pharmaceutical, and does not adequately limited or compensate the rights holder,  it may violate the terms set forth the in the WTO decision EU v Canada (DS/114) where the WTO noted that the Canadian Bolar exception could only apply to regulatory review where  “no commercial use is made of resulting final products.” (line 7.45).   The Bolar exemption should not be used to bootstrap a broader researcher or pre-marketing exemption.  As former Chief Judge Rader noted of the US patent law in discussing research exemptions: “the Patent Act leaves no room for any de minimis or experimental use excuses for infringement. Because the Patent Act confers the right to preclude ‘use,’ not ‘substantial use,’ no room remains in the law for a de minimis excuse.”  (Embrex v. Service Engineering, 216 F.3d 1343 (Fed. Cir. 2000).

Finally,  the “naked Bolar” sends a wrong signal by suggesting that China is not fully committed to developing an innovative pharmaceutical sector, despite China’s considerable human resources, investments, rhetoric and planning to the contrary.

Judging by recent generic drug approvals in China, there may be decreased momentum on the ground to protect innovative pharmaceuticals through limiting regulatory approval during the pendency of relevant patent protection.  Several generic versions of innovative pharmaceutical products have recently been approved by China for different manufacturers at the time of these recent DAL amendments, including Azilsartan, a product originally developed by Takeda that addresses hypertension, and is now produced by Zhaoke Pharma, a wholly-owned subsidiary of Lees Pharma. Azilsartan and Esketamine (a Janssen product for treatment-resistant depression) are also now being produced by Jiangsu Hengrui Medicine.  Pomalidomide,  a Celgene-developed product for treating multiple myeloma,  is produced by Chiatai Tianqing Pharma.  Bendamustine, a Teva product for  chronic lymphocytic leukemia, is being produced by Nanjing Simcere Pharma.  These products have obtained approval priority from CFDA and are expected to be approved by the time the new DAL comes into effect.  As is evident from this list, some products (Azilsartan) are being produced in generic form by more than one manufacturer.  This phenomenon of multiple competing generic manufacturers who may not have had to pursue patent challenges to the innovator to obtain marketing approval (as in a linkage regime), could also result in competition amongst generic manufacturers without strong incentives for follow-on innovation to the original compound.

By comparisons to this apparent backsliding in Mainland China, the Taiwan Executive Yuan has passed the bill to enact the new Pharmaceutical Affairs Act (“PAA”) on January 31, 2018. Patent linkage was specifically approved in Chapter 4 of the new PAA. Previously, in 2018, the Taiwan Food and Drug Administration had issued two drafts of the Enforcement Rules for Patent Linkage. Further, in May 2019, the Taiwan Ministry of Health and Welfare and the Ministry of Economic Affairs held a public hearing to clarify the intent to extend the patent linkage system in PAA to biosimilars. In July 2019, the Ministry of Health and Welfare officially announced that it is considering adding transitional clauses to exempt biosimilars which have obtained official clinical trial approvals during the implementation phase of patent linkage system in Taiwan.

While there appears to be weakening momentum for patent linkage, the DAL does change the regulatory regime for counterfeit medicines and vaccines.  In an apparent effort to address public health needs, the DAL, as revised, modifies the definition of counterfeit drugs.   Under the prior version of the DAL, unapproved imported drugs are deemed as counterfeit. Although the new DAL still prohibits importing and selling of unapproved drugs in large quantity, the importation of small amounts of drugs which have been legally marketed in other countries for urgent clinical needs is exempted under the new DAL, subject to other relevant laws and regulation.  The DAL also seeks to strengthen regulation over vaccine manufacturing, most likely in response to the vaccine scandal of 2018. Under the DAL, out-sourcing of vaccine manufacture is strictly prohibited. The punishment on manufacture and supply of counterfeit vaccine has increased from 5 times of revenue to 30 times of illegal proceeds.  The vaccine Marketing Authorization Holder (“MAH”) must meet certain standards set out in the new Vaccine Administration Law. The regulators will also establish a national traceable platform for the production, transportation, and storage of vaccines.  Lastly, new mechanisms such as the MAH system, defective drug recall system, filing system of clinical trial institutions will be implemented.  The existing “Good Manufacturing Practice for Pharmaceutical Products” (GMP) certification system for drug manufacturers and the “Good Supply Practice for Pharmaceutical Products (GSP) certification system for drug suppliers will be canceled.

Looking at all of the various legislative and regulatory developments in Mainland China and Taiwan, it is hoped that mainland China will ultimately find the right balance of incentives to encourage the further development of its innovative pharmaceutical sector, much as the US did with its Hatch-Waxman Act, while continuing to develop a secure supply of high quality innovative and generic products.

This article was written by Mark A. Cohen and Angel Liu.

Collaboration or Confrontation: Beyond the False Dichotomy in US-China IP Relations

Recently several writers have criticized the Trump administration’s strategic choice of confrontation over collaboration with China.  Among them was an open letter published in the July 2, 2019, Washington Post, “China is Not an Enemy,” or “Making China A US Enemy is Counterproductive” (based on its hyperlink) that was signed by several former officials and scholars. Prof. Alastair Iain Johnston of Harvard University also wrote an excellent article, “The Failures of the ‘Failure of Engagement’ with China.”  Chinese commentators have also chimed in.  One of the signatories of the July 2, 2019 letter, Jim McGregor spoke on a podcast about the limitations of collaboration.  A counter-letter, “Stay The Course On China: An Open Letter To President Trump” .  The debate is also an extension of the Stanford University report “China’s Influence and American Interests: Promoting Constructive Vigilance” from 2018, which also generated its share of controversy.

The authors of these studies discuss all aspects of the US-China relationship – trade, security, scientific, intellectual property, etc., and fold these issues into the collaboration vs. confrontation dichotomy. I lack the breadth to discuss all aspects of a complex relationship.  My focus is solely on IP and innovation and the role of collaboration or confrontation. 

An assumption of many of these authors is that we should avoid making China an enemy unnecessarily.  I agree. At the same time, many of the commentators seem to suggest that either IP engagement or confrontation may be counterproductive because of systemic failures of the WTO, or past disappointments.  As Prof. Johnston notes: “[T]here is no doubt that there are persistent WTO incompatible non-tariff trade barriers, including weak intellectual property protection, technology theft, and non-transparent regulatory practices, among others.” 

Overall, the IP-related arguments present a false dichotomy between engagement or confrontation.  Bilateral engagement is only one tool, and it need not be sacrificed to more assertive strategies.  The toolbox includes varied approaches. Softer advocacy might include training programs in China on novel issues, supporting more focused strategies by businesses, joint collaboration on shared challenges and trade agreements that include China (such as a bilateral investment treaty), to name a few.  More assertive postures might involve critical white papers or non-papers, multilateral engagement, WTO or other international law diplomacy or cases, trade agreements that exclude China (TPP), and, in appropriate circumstances, quid pro quo retaliation such as tariffs and sanctions.  Simply put, carrots and sticks are not exclusive of each other.  Moreover, there are a variety of carrots and sticks.  Sticks, however, carry a cost and need to be carefully considered before deploying.

One of the legacies of the Obama administration on IP was that it was over-committed to dialogues.  As Chinese trade diplomacy has been highly transactional, this had permitted China to “buy time” without committing to any trade concession.  For those who lived through Obama’s excesses and opposed them, President Trump has demonstrated himself to be Obama’s Hegelian opposite.

The explosion in IP dialogues during the Obama period is well documented. For example, the 2015 Joint Commission on Commerce and Trade (JCCT), which was co-chaired by the Department of Commerce and USTR and was the highest-ranking trade-specific bilateral dialogue.  It established IP-specific sub-dialogues, exchanges and programs on such topics as: standards, trade secrets, geographical indications, sports broadcasting, media boxes and copyright, on-line enforcement (including referrals to another IP-related working group involving criminal law), case law and databases with the judiciary, bad faith trademarks, copyright legislation, IP legislation and protection of plant varieties.  Additionally IP was discussed outside of the JCCT in dialogues with a range of US agencies, including antitrust (DOJ/FTC), criminal law (DOJ/DHS), innovation (OSTP) and strategic and economic dialogues (State, USTR, Treasury), as well as at the WTO (USTR), WIPO (PTO), and in plurilateral discussions, such as the IP-5 (the five largest patent offices), TM-5 (the five largest trademark offices) and ID-5 (the five largest industrial design offices).  There were also other dialogues, including judicial exchanges (2016) and commercial rule of law (2016), which also focused on IP.

Properly and economically utilized, dialogues can advance understanding where ignorance is a major impediment to resolving differences. They can build trust and long-lasting government to government relationships.  Dialogues may also spread the burden of advocacy among the US government, industry and trade associations and even foreign governments.  Educational training and assistance can also be leveraged for seeking additional concessions.  They also help establish a baseline for a measured approach to escalating issues to increasingly higher political levels.  However, dialogues should never become ends in themselves and need to be periodically evaluated for their effectiveness and efficiency.  

In a typical, hypothetical IP matter, a strategic approach to dialogues and engagement might involve a white-boarded multiple-year plan for the US that reflects the varying interests of the US government, foreign governments, industry, and academia.  The plan might progressively escalate concerns from a discussion around, say, bad faith trademarks, to a seminar on this topic, a meeting between the heads of the US and Chinese trademark offices, a JCCT meeting at a political level, a TM-5 meeting, a program with the International Trademark Association or the EU’s technical “IP Key” assistance effort, comments on proposed legislation, a meeting among cabinet-level officials and/or a WTO case.  These approaches may be consecutive or simultaneous. This type of strategy is also well known in Chinese military history, as “coordinating one’s strategies” 连环计 i.e., never relying on a single strategy but having many to fall back on, which is the 35th of the 36th classical military stratagems 三十六计. 

There have been several successful examples of coordinated engagement in IP that have delivered real changes over the years.  Examples include China’s providing design patent protection for graphical user interfaces, which involved multi-year engagement by industry, academia, the Chinese and US patent offices, and ultimately the offices of the JCCT, to deliver a tangible commitment in Chinese patent office practices.  Another example during the Obama period is the reform of China’s pharmaceutical patent examination process, which involved a similar process.   A longer-term engagement focused on the creation of China’s specialized appellate IP court.  It also involved several judges of the Court of Appeals for the Federal Circuit (CAFC) (including former Chief Judge Rader), the Federal Circuit Bar Association, academia, and others over a nearly 20-year period.  

To be effective, however, dialogues must be strategic.  The 2015 JCCT, by contrast, seemed to have an approach of letting “a 100 dialogues bloom”  (百对话齐放).   

An example of the failure of dialogue and coordinated strategies is found in the US handling of a request of China to revise China’s discriminatory Administration of Technology Import/Export Regulations (TIER).  The 2015 JCCT included a commitment to “support a technology licensing joint seminar to be convened by MOFCOM in the first quarter of 2016.”  This was a strikingly modest ask of the very senior US and Chinese officials that chaired the JCCT: a Chinese Vice Premier and three US Cabinet-level officials.  However, JCCT support was necessary to overcome entrenched Chinese resistance. Moreover, despite the JCCT commitment, China did not follow through on this modest ask.  Despite such high level support, China did not host the seminar.   

During this same time period, the US Chamber of Commerce, Global IP Center,  published a report through its “Track II”, IP Cooperation Dialogue calling for reform in the TIER. The Track II Dialogue seeks to encourage expert non-government IP-engagement and not rely solely on over-politicized official bilateral dialogues.  It includes former judges and patent office officials, as well as academics (including this author). The 2016 Report also did little to convince official China to reform the TIER.

USG persisted.  The 2017 JCCT reiterated the commitment to “hold a joint seminar”. This program was ultimately convened on March 18, 2017,  However, the program concluded with no change in China’s position regarding the reform of the TIER.     

With no demonstrable momentum by China, USTR identified the TIER in its 301 investigation of China’s technology transfer practices.  It also filed a WTO case in March 2018. China finally took notice and amended these discriminatory provisions in 2019. Now that the offending provisions of the TIER have been amended, the WTO case has been suspended.  Today, with the suspension legal case, its full implementation should be monitored.  It appears that “collaboration” did not work, but a more confrontational approach resulted in a positive outcome.

However, while it is likely that China would not have amended the TIER absent the WTO case, dialogue on the TIER also played the important roles of coordinating USG positions, elevating an issue politically, involving other foreign governments, testing the waters with senior leadership in China, and making sure that the US proceeded in a measured and thoughtful manner.   Many foreign governments, including the European Union and Japan were involved in these dialogue efforts and many also supported the WTO case.  Even more striking, the WTO “win” on the TIER is ironic as it came from an administration (Trump) has generally shown opposition to multilateral institutions as well as dialogues.   In fact, the President has demonstrated that a thoughtful combination of collaboration and confrontation with a diversity of approaches may be the most effective for advancing IP and innovation issues.

Nor is it wrong to cast the United States as the sole cause of the demise of softer approaches.  China contributed to the demise of dialogues and similar mechanisms in its use of bilateral meetings as instruments of delay and retaliation.  It responded to the first WTO IP case that the US brought in 2007 as an “act of aggression” that it would “fight to the bitter end” in 2007 (DS/362).  China thereafter suspended many forms of IP-related cooperation with the US.   In the build-up to DS/362, the United States also sought to compel China to publish all its IP cases, which the WTO declined to support (a TRIPS “Article 63” request).  China also did not oblige in that request. 

DS/362  was the only WTO case brought against China on IP prior to the Trump administration. That case dealt with infringement of consumer goods – notably, copyright piracy and trademark counterfeiting, particularly criminal and customs remedies. DS/362 did not involve technology. Anybody claiming that the WTO has been a failure with respect to China’s enforcement of patents and trade secrets should look elsewhere.  That case has not yet been brought.

USTR likely viewed DS/362  was a failure. The US did not succeed in compelling China to amend its criminal IP laws in DS/362, nor in requiring China to make its cases publicly available.  As a consequence of losing the case, the US government lost faith in the WTO as a mechanism for resolving IP-related disputes. USTR instead launched a series of bilateral and multilateral negotiations, including a proposed Anticounterfeiting Trade Agreement and revised model IP texts in bilateral and plurilateral trade agreements.  

The ensuing devaluation of WTO mechanisms was, in my view, premature.  While lawsuits in the US often appear binary in their outcomes, pressuring foreign countries to adopt legal regimes that they are otherwise opposed to at the WTO is much more complex.  Additionally, US impatience is not well-justified as the US itself has also been slow in responding to many WTO rulings.  USTR’s assessment regarding DS/362 may also have reflected its own institutional limitations. USTR is thinly staffed and lacks resources to engage in softer programs such as technical training or monitoring.  USTR relies heavily on industry suggestions, which may also be short-term in nature.  Unlike other US government agencies involved in IP, USTR is not the lead USG agency in a number of important IP exchanges, such as at the World Intellectual Property Organization, Interpol or the World Customs Organization. It does not participate in or promote IP office related exchanges,  does not have IP officers or law enforcement officers posted to China, and does not have a China Resource Center like the USPTO, which provides statistical analyses of IP-trends in China.  Despite this lack of depth, it has two important primary functions: negotiates deals with trade officials and bring disputes. This binary choice is limited when compared to the much broader toolbox that can be used to address an IP issue. 

The arguments that the WTO does not work in addressing IP-related disputes also ignore the success achieved by the Trump administration in seeing the TIER revised, as well as the demonstrable impact that DS/362 had in elevating the importance of criminal trademark and copyright enforcement to China, despite the setback of a loss in dispute proceedings.  The victory the US achieved in the criminal enforcement case materialized in the form of an uptake in criminal IP prosecutions. China increased its criminal IP cases from 904 in 2007 (the date DS/362 was filed) to 15,121 cases, involving 17,869 people in 2012This is a  16 fold increase.  By 2012, the Chinese criminal IP docket also grew to over 200 times the  US criminal IP docket of 2018. which consisted of 117 defendants in 67 cases.  One Chinese Supreme People’s Court judge confided in me that he attributed that increase to the spotlight that the US gave to the importance of criminal IP in China’s evolving IP ecosystem. For some recent analysis on these trends, please see Dan Prud’homme and Zhang Taolue’s excellent book “China’s Intellectual Property Regime for Innovation” (Springer 2019) which summarizes recent research on this increase, and provides data on criminal IP cases, defendants, prosecutions and convictions.  

A similar argument regarding the ultimate success of the US claims might be made about the request of the US that China should make all its IP cases publicly available in 2005/2006 (the so-called “Article 63 Request”). By 2014, China had decided to publish the  majority of its cases of all types.  This publication of cases has been welcomed by the legal and judicial community alike and has helped to provide greater predictability in adjudication, minimize corruption and provide a basis for strategic IP enforcement.  

By contrast to these successes, there was one claim in DS/362 that had no significant positive impact.  This failure was not due to China’s intransigence. In DS/362 USTR also alleged that China’s disposal of seized infringing goods by auction offended WTO requirements to dispose of such goods outside of the channels of commerce.  However, WTO rules only require Chinese Customs to seize goods upon importation (TRIPS Agreement Art. 51). China was and remains primarily an exporter of counterfeit and pirated goods.  The WTO was unable to identify a single instance where China had auctioned off counterfeit goods imported into China.   “No infringing goods destined for importation”, the panel stated “have ever been auctioned…during the period for which statistics are available.” (Para. 7.351).  The Customs claim, criminal IP claim and the case publication achievement all underscore the continual need for good data to support IP engagement of either the “carrot” or “stick” variety.

Arguing over whether China is becoming our enemy and the need for confrontation is redolent of the post-Korean War China rhetoric in the US.  A better approach might be to remake the US government into an institution that better understands, persuades and strategizes on complex technological and IP issues in China.  During the past 30 – 40 years, the US government has defunded or terminated every technology–oriented agency that cared to engage in a significant way with China, including the Office of Technology Assessment in Congress, the Technology Administration in Commerce, and the Office of Science and Technology Policy in the White House.  USTR’s mandate is  too limited to effectively engage in collaboration. USPTO has the deepest technical resources on IP and innovation issues, but lacks political clout. We need to coordinate more closely, and provide incentives for deeper engagement among all US agencies as well as with industry in order to be effective.   These issues have been apparent since at least the time of China’s WTO accession.  As I noted at a conference at the 24th Annual Fordham University IP Conference in 2016 (Session 4B-b “Asia and the Political Landscape”):

MR COHEN:… One of the lessons from WTO accession was — and I don’t know how to say this gently — how … under-informed US industry was about the legal system.  I say that because if you look at the number of civil cases involving intellectual property, in the year that China joined the WTO — and the negotiations occurred in the years before — there were about thirty.  So one could, theoretically, have contacted every company that had filed a lawsuit involving IP and you still wouldn’t have a very large cohort.

So a lot of trade negotiations, unfortunately but necessarily, are based on hypothetical constructs.  What makes a good legal system, with big words like “impartial,” “fair”?…

METALITZ:  So who was under-informed in that situation?  Was it the US negotiators or was it the US industry?  US industry — you’re right — was not bringing these cases.  But that may not have been out of ignorance. That may have been out of a supposition that they would not be useful.

BAI:  May I chime in?… I have seen US government officials talking about China when they don’t get their briefing right…. 

One way to improve policy is to hire the right people.  We need to promote and reward individuals who have the three “magic” skills: knowledge of Chinese law, knowledge of Chinese IP  or technology, and Chinese language skills. These individuals should also be given roles commensurate with their knowledge and skills.  The 2013 Report of the Commission to Stop American IP Theft, also identified this as an issue in the staffing of our embassies overseas: 

Strengthen American diplomatic priorities in the protection of American IP. American ambassadors ought to be assessed on protecting intellectual property, as they are now assessed on promoting trade and exports. Raising the rank of IP attachés in countries in which theft is the most serious enhances their ability to protect American IP. 

The need to restructure US government on tech and IP issues has long affected the quality of our “engagement.”   

Whether confrontation or engagement are pursued, the choice is complex, should be well-coordinated, and will need to evolve based on circumstances.  It should be based on the right information made by well-informed people.  It is not, ultimately, an ideological issue as many of the recent articles might otherwise suggest.  

Revised: July 21, 2019, October 8, 2019.

 

On Avoiding “Rounding Up the Usual Suspects” In the Patent Law Amendments …

 

Although many of the proposed changes in China’s patent law amendments are welcome, the draft amendments also present a difficult  choice in two key areas: (a) patent administrative enforcement and (b) punitive civil damages.

(A)The draft, if enacted, would enhance patent administrative enforcement through national coordination of large cases (Art. 70), expanding authority of administrative enforcement for infringement (Art. 69), and enhanced fines of five times illegal earnings or up to 250,000 RMB (Art. 68).  These efforts should be seen against the background of a huge ramp up in administrative enforcement in patents,  that has now eclipsed administrative enforcement of trademarks (77,000 to 31,000 cases).    Moreover, there appears to be a continuing interest of the Chinese government in special campaigns to deal with patent infringement, such as in a recently announced MOU with NDRC, and in a proposed campaign to deal with infringement issues faced by foreigners at the beginning of the current 301 investigation.

How much will these efforts help foriegn business people? The record on special campaigns is that most improvements are short-lived and perhaps focus too much on “rounding up the usual suspects” by local enforcement agencies (Casablanca).  Enhancements in administrative patent enforcement are also an about-face from the prior dominant role that trademarks played in administrative IP enforcement and the relatively minor role that patent administrative enforcement traditionally played in China.  Also of concern is that administrative trademark enforcement had uniquely been frequently utilized by foreign entities as complainants/victims.  For example, there were 17,022 administrative trademark enforcement actions taken by SAIC on behalf of foreigners in 2011.  This was nearly 14 times the number of all foreign-related civil litigation involving all types of IP rights that were disposed of by the China courts in that year (1,321).    In addition, as the Apple design patent case demonstrated in Beijing, foreigners may easily end up on the defensive side in these administrative patent cases that are typically brought by local government officials.    It is therefore uncertain how much, if at all, enhanced administrative patent enforcement will benefit foreigners.

(B)  The proposed draft would also provide for punitive damages upon a judicial finding of  willful patent infringement (Art. 72), with a maximum of 5x damages.  To many this may appear to be a welcome improvement. Punishing willful IP infringement is currently a policy that both the US and Chinese leaders share.  On the US side, the term IP “theft” appears 119 times in the Section 301 Report, while civil damages and compensation appear hardly at all.  On April 9, 2018, President Trump tweeted that he is “Defiant” and that he “Will End …Massive I.P. Theft” by China. Premier Li Keqiang apparently shares some of this enthusiasm.  He had noted in his annual report on the work of the government, that China needs to “improve IP protection, and implement a system for punitive damages against infringement “加强知识产权保护,实行侵权惩罚性赔偿制度” .

While punishment is an important tool, the more pervasive problem is that basic civil remedies are too weak.  Actual damages are in fact rarely imposed by Chinese courts and, have been the outlier.  Courts impose statutory damages in over 90% of all patent cases as well as in other IP areas.  In the Beijing IP Court median damages awarded for patent infringement in 2016 were only 112,500 RMB, or less than 20,000 USD. Rather than unduly emphasizing punishment, a better structural place to start is in improving the civil system to achieve maximum compensatory deterrence.

Intellectual property is fundamentally a private right (TRIPS Agreement, preface), and adequate civil remedies should therefore be the priority.  Using remedies that are not at the core of a healthy IP system based on private rights (administrative remedies/punitive damages)  are not a substitute for predictable, compensatory private remedies. In fact, the administrative system affords no private compensation to victims.  Punitive and administrative remedies are also often left to the discretion of the enforcement agencies, which can result in unpredictable enforcement.  In 2017 for example, despite the pressure on China to address trade secret theft, criminal cases declined by 35%.

By focusing on deterrent civil remedies that are fairly administered, the US will find common cause with many Chinese officials.  The issue was addressed  by Justice Tao Kaiyuan of the Supreme People’s Court  who similarly believes that the civil patent system is the primary enforcement mechanism for private patent rightsJustice Luo Dongchuan, who is now in charge of China’s new appellate IP circuit court, also underscored the importance of the IP courts in advancing rule of law in a visit to the US.  In an article I wrote,  with former PTO Director David Kappos and Chief Judge  Rader (ret), we also underscored that China’s administrative system is fundamentally unlike the judicial mechanisms of the USITC, and that better recourse to improved patent enforcement can be had with the courts.

Moreover, these punitive and quasi-legal remedies could easily be turned against the foreign community.  Consider, for example, that due process for foreigners has been a long-standing concern  in Chinese IP matters, well before the current concerns over retaliation over the proposed extradition of Huawei’s CFO.  Moreover, several cases have demonstrated that   foreigners are often the test cases for “improved” enforcement mechanisms in IP, such as in Chint v. Schneider (high patent damages), Iwncomm v Sony (injunctive relief in a SEP case), AMEC v Veeco (preliminary injunctions in patent infringement matters), antitrust cases involving licensing  and even the first publicized criminal copyright case, in which the principal defendants were two Americans (Guthrie and Cody).

I believe that China needs to focus its patent enforcement resources on the courts, and especially to give the new national appellate IP court a try in providing balanced and fair enforcement of IP rights, both foreign and domestic.  Both the US and China might try to focus more on much delayed and long overdue improvements in the civil system, some of whic are contemplated by the patent law amendments.  A rhetoric based too much around punishment may in the end prove to be self-defeating in the absence of necessary legal guarantees such as improvements in awarding compensatory damages, greater procedural due process, and improved transparency in the courts and administrative agencies.

shenzhenstrictlyprotectip

Bottom photo of the author in front of a Nanshan District Shenzhen IP Office sign “Create the Most Strict IP Protection Pioneering District” (Jan. 2019).  The opinions expressed in this blog are the author’s own.  Please address any corrections or improvements to: chinaipr@yahoo.com

 

 

The Good Faith Elephant in the IP Trade War

elephant-in-the-room

It is impossible to talk about structural issues in China’s IP regime and its impact upon foreigners without addressing the lack of a comprehensive approach to “bad faith” activities in all its forms in China.  This issue has likely undermined more of  the credibility of the Chinese government than any other in IP, and it has affected the greatest number of US companies.  Chinese officials may not realize it, but every medium to large sized company I have met in the US has been affected by it.

Any lawyer who has counseled a US company on doing business in China knows the drill: before you enter the market there are likely to be trademark squatters, bad faith patent registrants, difficulties in protecting trade secrets used by trusted employees, amongst others.  Even the President has been a victim with squatting on the Trump mark.

China has generated its own vocabulary around bad faith activity.   “IP theft”, a term that has been promoted by the Trump administration, reflects an overarching concern about Chinese tolerance of state-sponsored or willful infringement.  Another similar concept is “forced technology transfer.”  The history of these terms goes back decades.   “Patent hijacking” refers to behavior before 2008 of misappropriating designs and other inventions based on China not requiring absolutely novelty as a condition for patent grants.   A “Naked Bolar” regime refers to a regime which grants an exemption from certain forms of patent infringement without providing a counterpart benefit to an innovator for the erosion of its patent rights (this may be corrected in the proposed patent law revisions).  “Ambush marketing” and “trademark squatting” may  not be new to China, but China remains a focus of these concerns.  China also has some vocabulary of its own which often do not make it into English, such as  “旁名牌” (saddling along famous brands) and patent “cockroaches” (instead of patent trolls).

China has also created global precedent over willful (bad faith) behavior in DS/362, the WTO case involving China’s criminal IP enforcement regime.  As the WTO panel indicated in that case:

“[T]he word “wilful” … precedes the words “trademark counterfeiting or copyright piracy”. This word functions as a qualifier indicating that trademark counterfeiting or copyright piracy is not subject to the obligation in the first sentence of Article 61 unless it is “wilful”. This word, focussing on the infringer’s intent, reflects the criminal nature of the enforcement procedures at issue.”

Good faith may be an underperforming concept in China, but it is also a low-hanging fruit for trade negotiators. It is in Article 4 of the General Principles of the Civil Code as well as Article 6 of the Contract Law.  It was incorporated into Article 7 of the revised Chinese Trademark law.  The Supreme People’s Court recently found that warehousing trademarks without intent to use is a basis for invalidating marks, albeit not under Article 7.  It is part of the Guangdong High Court Rules on SEP disputes in telecommunications (good faith in negotiations).  It is also part of the guidance from the Beijing High Court for handling of patent validity matters.

The problem isn’t that good faith doesn’t exist in China’s IP regime, but that it is selectively applied.  In addition to the examples already cited, it is under consideration in the proposed Patent Law revisions in terms but only for good faith litigation, and it is an underlying concept in punitive damage provisions in the Trademark Law and the proposed Patent Law Revision. The concept has not yet appeared in substantive copyright or trade secret law.  Companies like Taobao are using a determination of “good faith” in facilitating take-downs

Selective application of “good faith” concepts is evident from its inconsistent application across various IP laws.  Why must trademarks be prosecuted in good faith, but not patents? Why is bad faith patent litigation a concern in the proposed patent law revisions, but why not trademark, trade secret, copyright or other IP-related litigation? The concept needs to be utilized to address such difficult issues as the epidemic of low quality patents and bad faith trademarks.  It should not be used to resolve other, easier challenges such as extracting more rents from foreigners in patent litigation as in the Guangdong rules on SEP disputes.  In fact China back-slid in applying good faith concepts while this trade war was brewing.  The removal of “employee” as a covered party (经营者) in China’s revised trade secret law (Anti Unfair Competition Law) facilitates bad-faith employee behavior.

Adjudicating what constitutes good faith need not involve inquiries into subjective attitudes.  Courts and agencies can rely on objective indicia from China’s data-rich environment: companies that file multiple trademarks that they don’t use  them; trademark registrations than use others’ prior rights; on-line merchants  that routinely infringe IP rights; serial violators of injunctions; patents that are routinely invalidated and/or filed based on others’ designs; comprehensive data that shows foreigners that are being treated fairly drawn from China’s new judicial databases;  willful violators of non-compete agreements, and others.

Bringing good faith into full play would be a triple win: good for China’s IP system, good for US rights holders, and good to help re-establish trust between China and other countries.  Trade negotiators may wish to consider it being a part of any “structural” commitment from China in the current trade dispute  It can be implemented by China’s National People’s Congress as a legislative interpretation or as an amendment to China’s civil law, and in specific laws now under consideration (patent law, copyright law).  The SPC at an appropriate time might prepare a judicial interpretation articulating its application in specific circumstances.  It also has the added advantage of being easily monitored, as data analytics can be harnessed to determined if real progress is being made in a wide range of areas.

It is time to bring good faith more directly into China’s IP system.

 

A Statistical Snapshot of IP Prosecution, Admin. Enforcement and Monetization for 2018

As reported by zhichanli, CNIPA (the new agency formed from SIPO, SAIC and AQSIQ’s – IP authorities within the State Administration for Market Regulation) held a news conference on January 10 to report on statistical developments for 2018.  Here are some of the highlights:

Explosive Patent Growth Continues: 1,542,5000 invention patent applications were received by CNIPA, an increase from 2017 when it was 1,381,594.  432,000 patents were granted.  Of these 346,000 were domestic patent applications (2017: 326,970).  This leaves 86,000 foreign applications for 2018 (2017: 93,174).  There was therefore an increase of  5.8% to 19,030 in Chinese domestic patent grants in 2018, while foreign grants appear to have dropped by 7.7% to 7,174.  Any drop in a growing economy and IP system can be indicative of a problem of some type.

In total 93.3% of the domestic invention patents were service inventions, which is one indicator of possibly increasing quality.    Huawei remained the lead domestic filer with 3,369 invention patent applications.

CNIPA had a busy year examining 808,000 invention patents, 1,874,000 utility model patents (an increase from 1,687,593), and 667,000 design patents (an increase from 420,144).  The PRB heard 38,000 cases, resolved 28,000 and invalidated 5,000 patents.

Comparative data on 2017 is drawn from this report.

Trademarks Too, on Overdrive: CNIPA received 7,337,1000 trademark applications (2017: 5,748,00) and registered 5,000,7000.  Of these, 4,797,000 were domestic applicants.  In aggregate, there were 18,049,000 trademarks registered in China (2017: 14,920,000).  The good news is that the rapid growth in TM applications is slowing.  In 2017, there had been a year-on-year increase of 55.7% in trademark applications. In 2018, the increase was “only” 31.8%.

Patent Administrative Enforcement Continues to Be the Focus:  CNIPA reported 77,000 administrative patent cases, with an increase of 15.9% over the previous year.  35,000 cases involved patents disputes, of which 34,000 involved infringement (an increase of 22.8%).  43,000 cases involved counterfeit patents, with an increase of 10.9%.  There were also 31,000 cases involving illegal trademark activities.  This was an increase from approximately 30,000 the year before, which was itself a decrease of 5.1% from the prior year.  The apparent administrative enforcement realignment to patents thus continues, despite recent moves to improve the civil patent system, including the establishment of a specialized IP court at the SPC level, and the relatively high historic utilization of the administrative trademark system by foreigners.

Another odd development: 2018 marked the launch of the first administrative case involving infringement of a registered semiconductor layout design.

TM’s Remain Number 1 in Geographical Indications: There were 67 sui generis GI registrations approved, presumably under the former AQSIQ system, and 961 GI trademarks registered.   The trademark-based GI system thus appears to be occupying a dominant role.

Cross-border Trade In IP – is it Growing:  CNIPA also reported that “usage fees” for IP rights in cross border trade increased to 35 billion USD.  Comparative data to prior years and breakout data with individual countries would be especially useful, in order to do year-on-year comparisons and to also compare with US data on licensing revenue.  As reported in an earlier blog, according to official Chinese statistics for 2013, technology import contracts into China were reported at 41 billion dollars, with patent licensing contracts constituting 15.4% of that total.  I don’t have comprehensive data to make even preliminary comparisons at this time – and such data would be highly useful.

Summary: Altogether, the report shows a rapidly growing huge IP system, with active government involvement, encouragement and planning.  The report also suggests that there may be a diminishing foreign role, relative and/or absolute, in certain areas.  Finally, this report is the first hint of how the combined CNIPA may report on its joint activities in patents, trademarks, semiconductor layout designs, GI’s and administrative enforcement.  Additional data is usually released around IP Week of each year (April 26).

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).