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.”

 

MofCOM’s September 12 IP Program in DC Covers A Wide Range of IP Developments

Here is a digest of some of the highlights of the half day program hosted by MofCOM on IP in Washington DC on September 12.

The Supreme People’s Procuratorate gave a useful overview showing the policy reasons for the big increase in criminal IP cases, including the expanding role of the procuratorate.

SIPO underscored the increase in its examiners and the decreasing pendency periods to 22.2 months.   SIPO has also conducted a social survey which showed a relatively high approval rating of its procedures (81.8%).

The Chinese side did not address the foreign-related impact of the Specialized IP courts. However the low foreign utilization of the civil IP system was generally acknowledged.

Regarding the new TM law, procedures for auditory marks was discussed, oppositions for non use, and changes in the recordal system for licenses. SAIC was careful to underscore that its recordal system did not require submission of business confidential information.   SAIC also discussed the changed provisions for liability by reasons of “providing convenience” to infringement, including storage, transportation, mailing, printing, concealing, providing a business premises and providing an on-line goods trading platform.

SAIC also noted that the TM law also sought greater coordination with other laws, including the anti-unfair competition law and criminal laws. For example, it provided support for demonstrating “intentionality” in  TM infringement when other indicia, such as trade dress infringement, are present.  Chinese IP Attaché Chen Fuli also noted that a key provision of the new TM law was its including of concepts of honesty and credibility into the TM system, which were borrowed from the civil law.

The National Copyright Administration noted that there were now at least 632 million Internet users in China, and 527 cell phone users, with 2,730,000 websites. NCA also noted that there were widely differing opinions on the types of amendments that were necessary for the copyright law.  In revising the law to address recent developments, NCA was looking at earlier State Council regulations on on-line liability, and recent civil and criminal JI’s.  NCA also noted that the on-line “Sword Campaign” resulted in 201 cases sent to criminal referral.  In addition NCA was supervising 25 websites for their content of top movies, and TV programs.  In NCA’s view, music and published works were continuing to experience significant problems, and NCA hoped to address these through a black-list system.  Also, NCA noted that many IP addresses for companies that were subject of its enforcement campaigns were located overseas, including in the US.

The Leading Group reviewed its numerous, generally successful, efforts at improving coordination on IP enforcement, including its recent campaigns. Unfortunately, its special campaign on trade secrets had only resulted in 21 administrative enforcement cases in the first half of 2014.

Regarding China’s sui generis system of GI’s, AQSIQ noted that this system was based on China’s Product Quality Law, and was initially implemented in 2004 by the Department of Science and Technology of AQSIQ. AQSIQ noted that relevant rules governing operation of the sui generis system included the Provisions on Protection of Geographical Identity Products, and the Working Rules on GI Product Protection, which provide for opposition and cancelation of GI applications.  Describing GI’s as a “public rights” system, AQSIQ also noted that it has set up a  GI working group, it has started work on a GI products encyclopedia,  it had promulgated over 1000 standards for GI products,  and that it had set up exemplary zones for GI products..  AQSIQ also noted that NAPA Valley had secured GI protection in China.  Its GI application was published in August 2011 and there had been no opposition to it.

Altogether, it was a useful and informative program.

Full disclosure: I co-moderated the program, although this summary represents my personal views only.

Specialized IP Courts Established in Beijing, Shanghai and Guangzhou; Song Xiaoming New Chief IP Judge

According to Xinhua, on August 31, the NPC passed legislation establishing specialized IP courts (http://news.xinhuanet.com/politics/2014-08/31/c_1112298943.htm) (“Decision of the NPC Standing Committee on Establishing Specialized IP Courts in Beijing, Shanghai and Guangzhou”)

As indicated, the courts are to be established in Beijing, Shanghai and Guangzhou.    Some basic aspects:

1.  The types and numbers of cases are to be decided by the SPC

2.  The court will hear technically complex first instance civil matters and administrative appeals (patents, technical trade secrets, plant varieties, semiconductor layout designs, etc.).

3.  The Beijing IP court will hear first instance appeals of validity / invalidity decisions of State Council IP agencies (patent office, trademark office, etc.).

4.  The courts will have cross-territorial jurisdiction for the types of  cases determined by the SPC noted  in the first paragraph above within three years.

5.  The court will also hear appeals from first instance trademark and copyright cases that originate at the basic level court in its municipality.

6.  Appeals of first instance decisions of the specialized IP courts will go to the high court of the province or city where that court is located.

7.  The specialized IP courts will be supervised by the SPC, the local high court and, “according to law”, the procuratorate.  Note that  no specific procuratorate – national or local is indicated.

8.  The President ( 院长) of the local IP court will be decided  and appointed by the local people’s congress.

9.  The Vice President of the court, chiefs of tribunals and adjudicating judges will be decided by the President and subject to appointment by the local people’s congress.

10.  The SPC will report on the implementation of the IP courts to the National Peoples Congress three years from now.

11.  The specialized IP courts are established as of August 31, 2014.

There are clearly some additional details and kinks to be ironed out.  For example certain copyright cases can be as technologically complex as patent cases;  there is no legal definition of “technical” trade secret as opposed to trade secrets involving business information; having the heads of these specialized courts be appointed by local people’s congresses may also continue to result in significant local protectionism; cross border jurisdiction for first instance cases for the courts could also result in cross border jurisdiction of the local high court, which could also increase local protectionism.  As I have noted several times before, I am unclear if anti-monopoly  cases qualify as “技术秘密等专业技术性较强的” (technologically complex, technically specialized) cases.

It  also appears likely to me that these courts would also be first instance courts for trademark and copyright cases which involve foreigners.  Such cases are typically now filed in the intermediate court or higher.  The NPC decision notes only that the specialized courts however have jurisdiction over appeals from the basic level courts which heard trademark and copyright cases.  As foreigners do not file cases in the basic courts, the specialized IP courts may be their courts of first instance.   知识产权法院所在市的基层人民法院第一审著作权、商标等知识产权民事和行政判决、裁定的上诉案件,由知识产权法院审理.  One question that arises is whether these courts would then also have cross border jurisdiction – which could then make them an effective tool in dealing with cross border counterfeiting and piracy involving foreigners and others.

The decision does further commit Beijing city to hearing administrative and civil IP cases in one specialized court, which is likely a good development for foreigners who bring many administrative cases.   If the Beijing IP court were granted jurisdiction over all cases where there is a validity challenge to a patent or trademark anywhere in China,  it could also result in a significant efficiency in the Chinese system.

These first instance specialized courts for technically complex cases will still be subject to review by at least one, possibly two appellate courts.  In this respect, the reform may be less like the Court of Appeals for the Federal Circuit, which established one national patent appellate court.  Rather, it appears to mostly be a reform of first instance adjudication, which might include consideration of venue, jurisdiction, consolidation of cases and further training of judges.

In a contemporaneous development, according to the People’s Daily (http://rmfyb.chinacourt.org/paper/html/2014-09/01/content_87088.htm?div=-1), Kong Xiangjun孔祥俊 is no longer head of the No. 3 (IP) Division of the SPC.  He has been replaced by Song Xiaoming 宋晓明, formerly chief judge of the No. 2 Civil Division.  Kong had  reportedly been scheduled for promotion and was working in SIchuan for the past several months.  It is unclear to me where Kong is next headed.

 

Further Developments in Specialized IP Courts

According to a recent article by Harry Yang (杨成) at http://npc.people.com.cn/n/2014/0825/c14576-25535722.html, the NPC is discussing establishing specialized IP courts in Beijing, Shanghai and Guangzhou, based on a draft submitted by the Supreme People’s Court (SPC).

The specialized IP courts are proposed to have cross-regional jurisdiction over civil and administrative IP cases related to patents, plant varieties, integrated circuit layout designstechnical secrets” (which is not a term in the anti-unfair competition law), and “other” intellectual property rights.   The SPC will enact a rule to divide the jurisdiction for each specialized IP court.

The specialized IP courts will also have jurisdiction over the appeals of first instance copyright and trademark civil verdicts, as well as appeals for administrative decisions made by the local courts where the specialized IP courts are located.

The Beijing IP Court will have jurisdiction over administrative IP cases decided against any administrative decision made by departments of the State Council, thus retaining – if not enhancing – their combined administrative/civil jurisdiction.

Regarding appeals of the first instance verdict made by the specialized IP courts, the local People’s High Courts will have jurisdiction.

The goals of the courts appear to be to strengthen IPR protection,  provide greater uniformity in adjudication (much like the reasons for the CAFC) and to mitigate local protectionism.  The experts took note that amongst the 90,000 IP cases of last year, there were several thousands that were more difficult.  These difficult cases generally involved high technology, and  were also a concern of the international community.   The article also notes that certain jurisdiction issues need to be resolved involving appeals from local courts to the specialized IP courts.

The article does not address outstanding subject matter jurisdiction issues – such as jurisdiction over antimonopoly law cases, or non-technical trade secrets by the specialized IP courts.

SPECIALIZED IP COURTS ABOUT TO LAUNCH IN THREE CITIES – AND ARE THEY GOOD FOR FOREIGNERS?

Recent Chinese efforts at developing specialized IP courts and in promoting greater judicial independence suggest that the system may significantly improve in the years ahead. According to press reports, some of these efforts may take final form at the 10th meeting of the 27th Session of the Chairman’s Council of the 12 Session of NPC Standing Committee which will be held on August 25 through 30. At that meeting, the NPC Standing Committee will review the bill submitted by the Supreme People’s Court which is the Draft Resolution of SPC to Establish IPR Courts in Beijing, Shanghai and Guangzhou.

Why specialized IP courts? On August 12, 2014, Deputy Chief Judge Jin Kesheng (金克胜), of the third civil (IPR) division of the Supreme People’s Court, said: “In recently years, the speed of increasing IP court was grow slow smoothly, however, there are more and more the new style cases and complicated cases involving foreign parties so that these cases were difficult to judge and the attention from the public to these cases were enhanced. The number of case filed at the Supreme Court was increasing, especially in patent cases with more complicated technology and huge market value and interest. Additionally, the administrative cases are growing rapidly, the proportion of cases involving the fields of medicine, electronic, telecommunication patents are increasing. The proportion of cases in competition cases involving network technology and new business models is large, business secrets and counterfeiting cases continue to increase, and the Supreme People’s Court is hearing antimonopoly cases for the first time… Therefore, this year the Central Committee of the Party and some related departments did some investigations with regard to establishing a specialized IP courts…”

 China has had specialized IP tribunals (ting 庭), beginning with an initial experiment in 1993 in Beijing. Currently there are about 3,000 judges in sit these tribunals. In addition, there are 560 tribunals throughout the country, including basic, level, intermediate, high court and supreme people’s court tribunals or divisions.   In recent years, China has been experimenting with more basic courts (e.g. Yi Wu People’s Court and Kun Shan People’s Court) hearing IP cases including patent cases. Historically, these tribunals had sometimes been called “No. 3 Civil Tribunals” (e.g. No.3 Civil Tribunal of Shanghai Higher People’s Court, No.3 Civil Tribunal of Pudong District People’s Court), “No. 5 Civil Tribunals” (No.5 Civil Tribunal of Shanghai No.1 Intermediate People’s Court, No.5 Civil Tribunal of Shanghai No.2 Intermediate People’s Court) or IP Tribunals (IP Tribunal of Zhuhai People’s Court). Increasingly these tribunals may combine civil IP jurisdiction with administrative review and criminal jurisdiction (“three in one tribunals”).

 As civil enforcement is the lion’s share of judicial IP litigation, the civil experience of these judges has in a sense helped also to develop the capacity of China’s judiciary to handle criminal and administrative litigation. In addition, by combining civil, criminal and administrative jurisdiction there is a greater likelihood of consistent handling of matters that may cross jurisdictional boundaries such as use of administrative evidence in civil cases, providing civil compensation in criminal matters, referring administrative or civil matters to criminal litigation, or handling patent and trademark validity matters in conjunction with an ongoing civil case. Today all of these matters may be handled in one tribunal.

 What prior work has been done in this area by the Chinese government? While specialized IPR courts have been talked about for some time, institutional improvements in the IPR tribunals were set forth as a national goal in the Outline of the National IP Strategy (2008) which was coordinated by SIPO. The NIPS stated “Studies need to be carried out on establishing special tribunals to handle civil, administrative or criminal cases involving intellectual property”. The SPC took an important step in this direction in July 2009, when it directed the civil IP tribunals in the Beijing No. 1 Intermediate Court to handle validity matters on appeal from China’s patent and trademark offices. (最高人民法院关于专利、商标等授权确权类知识产权行政案件审理分类的规定).

 The impetus to develop specialized IP courts in China took an even greater leap forward back on November 12, 2013, at the Third Plenum Session of Eleventh Communist Party Central Committee (the “Third Plenum”). The Third Plenum set as a goal to “explore the establishment of intellectual property court(s).” Since that time, Beijing, Shanghai, Guangzhou, Nanjing, Chengdu, Zhengzhou had started to apply for establishing the IP court with the Supreme Court. On March 10, 2014, Zhou Qiang(周强), the President of the SPC discussed the work schedule of 2014 and said that the Supreme Court would promote to establish the specialized IP court. On July 9, 2014, the Supreme Court at its press conference outlining judicial reforms for the Supreme Court (2014-2018) discussed establishing Specialized IP courts at places where IP cases are concentrated. Professor Tao Xinliang (陶鑫良) had proposed establishing the IP Intermediate Court at some places where IP cases concentrated to judge the civil IP cases and administrative IP cases of the first instance and the civil IP cases, administrative IP cases of the second instance and some criminal IP cases. (Prof. Tao Xinliang 陶鑫良<Some thoughts on Establishment of Specialized IP Court建立知识产权法院的若干思考> Madame Tao Kaiyuan (陶凯元) , a Vice President of the Supreme Court, and a former Director General of the Guangdong IP Bureau (where she likely worked with Vice Premier Wang Yang(汪洋)) has also said that the SPC should continue to promote three-in-one IP tribunals.

Why might China be adding a new emphasis on a specialized IP court in additional to combined tribunals? A specialized IP court may promote and improve the civil judicial enforcement system by providing more resources, promote the independence of the judiciary, and provide for more training of judges, particularly on technical patent matters. The judges of a specialized IP court might be even more professional and autonomous. They might be better able to handle the administrative cases, criminal cases and civil cases at the same time. Like other specialized courts (e.g maritime, military, railway court), civil/criminal and administrative jurisdiction would also combined, reflecting the subject matter expertise of the judges in that court and likely reducing subject matter and venue conflicts for IP litigation.

 The SPC has not yet published the detailed program for implementation of specialized IP courts. In addition, we have heard little about important areas of the IP tribunals’ jurisdiction which are not as directly related to IP, such as antimonopoly law, unfair competition and licensing, and whether these areas will also remain within the specialized court jurisdiction. We assume they will be, and would actually hope that other IP-related areas could be specifically included (such as consumer protection, substandard products, and geographical indications). However, we have seen nothing to date discussing these areas.

Will a specialized IPR court be good for foreigners? Most foreign rights holders have continuing concern with local protectionism and political influence in IP adjudication. Beijing, which appears to be a focus for development of a specialized IP court is the jurisdiction that appears to hear the most foreign cases. As we have previously blogged, foreign parties are involved in approximately 47% of their administrative appeal docket (which is primarily based in Beijing); or about 1349 cases, nearly equal to the number of infringement cases in 2013 of 1429. Hopefully, giving the Beijing courts more independence and confirming their “three in one” approach will provide greater judicial autonomy for the Beijing courts.

One concern is whether specialized IP courts will indeed function in a more independent manner than IP tribunals. The US experience with our specialized national patent court, the Court of Appeals for the Federal Circuit, has generally been that the CAFC has some impact on correcting local biases at the trial court level, including possible anti-foreign jury bias. This is borne out by data which shows that in general, reversal rates in favor of foreigners is higher at the CAFC than reversal rates in favor of domestic entities.

 U.S.: Patent Infringement Civil Litigation Appellate Win Rates

 

Overall

Foreign Companies

Patent Owner Win Rate

25%

27%

Accused Infringer Win Rate

75%

78%

Source:Paul M. Janicke & LiLan Ren, Who Wins Patent Infringement Cases?, 34 AIPLA Q.J. 1 (2006).

However, according to data from the CIELA database (www.ciela.cn), second instance patent appeals in China generally show an inclination to support the Chinese domestic party against the foreigner.

China : Invention Patent Litigation Data

 

All Plaintiff

Foreign

Domestic

1st instance win rate

73%

78%

72%

2nd instance win rate

52%

40%

52%

Overturn rate

19%

30%

17%

Mean compensation

RMB 439,614

RMB 230,827

RMB 525,939

Medium compensation

RMB 100,000

RMB 125,000

RMB 100,000

Duration

8.2m

11.8m

6.9m

(Courtesy of Tim Smith of Rouse & Co. )

Why might appellate IP courts or tribunals behave differently in each country? First, the CAFC is a national court, not a regional or local court. In this sense, it may be more accountable to national law and reputation than local courts. The CAFC under former Chief Judge Rader had in fact been a leading global proponent of national specialized IP courts. Second, the CAFC has a different jurisdictional role. It does not retry cases, rather it hears appeals. In addition, it hears both patent validity and infringement matters in one court. Moreover, its decisions on matters of law are binding on lower courts. As such, it has more authority in deciding legal matters, and in instructing lower courts on proper adjudication. For example, the CAFC had taken an active role in addressing venue issues at the E.D Texas on patent litigation issues. A third reason is found in China’s political situation. In general, Chinese courts are much less independent than US courts. Local Chinese courts, particularly in remote areas, may also tend to be even less accountable to national law and policy. Second instance Chinese courts may be more susceptible to receiving national policy directives and may therefore be more susceptible to national political influence in adjudicating disputes. Moreover, local statutes enacted by local people congress are at a higher political hierarchy than national administrative rules (部门规章). The local political congresses that enact these statutes also appoint judges. When a second instance case is heard, for example, in a provincial high court, there may in fact be a problem of more direct political influence through political actors in the provincial capital.

The limited data available to date suggests to me that while specialized IP courts have promise, their potential impact will also be affected by national judicial reform efforts and may continue to be constrained by existing limitations in the political independence of the Chinese judicial structure. As Susan Finder has noted in her blog, there are several efforts under way to address some of these systemic issues in the Chinese judicial system, which may also bear promise for Chinese IP adjudication. In sum, specialized IP courts may not be the panacea that foreigners might otherwise seek in minimizing anti-foreign bias in local adjudication in China, but I do believe they offer some hope for a better and stronger judiciary.

 By Mark Cohen, with Ms. Yao Yao of Fordham Law School (LLM Candidate, 2015).

Forecasting the Impact of the Third Plenum on IP Adjudication

What are the impacts of the resolution and spirits of the recent Third Plenum of the 18th Communist Party on rule of law in China, particularly commercial rule of law and IP? 

The morning of December 11, from 10:00 to 11:30, George Washington University Law School will be hosting its third annual China IP Program to discuss what China’s recent rule of law developments mean.    I will attend this program along with Don Clarke  of GWU, Xuan-Thao Nguyen (Southern Methodist University), Chief Judge Rader of the CAFC and others.   By my reckoning there have been three important streams of change affecting IP and rule of law in the past few months. 

One of the important developments is administrative transparency and accountability.  As previously reported,  Premier Li Keqiang is seeking to establish greater transparency in administrative enforcement decisions, through the State Council’s enactment of an “Opinion on Making Publicly Available According to Law Information on Administrative Penalties Concerning the Production and Sale of Fake, Counterfeit and Sub-standard Goods and Intellectual Property Rights Infringement” (关于依法公开制售假冒伪劣商品和侵犯知识产权行政处罚案件信息的意见).  At a conference this past December 5 sponsored by MofCOM, we were told that this regulation is likely to be made public available in the near future.  Moreover, as many as 300,000 cases each year involving IP infringements and fake and shoddy goods are likely to be affected.   

At the same time, an equally important September 2012 decision that I previously reported on: the “Opinion Concerning How to Improve The Work of Coordinating Administrative and Criminal Enforcement in Striking at IP Infringements and the Manufacture and Sale of Fake and Shoddy Goods”  (关于做好打击侵犯知识产权和制售假冒伪劣商品工作中行政执法与刑事司法衔接的意见), remains non-public.  However, it appears that this effort at administrative coordination in criminal IP from September 2012 has now “migrated” to a higher level.  Improvements in administrative/criminal coordination were also discussed in the November 12, 2013 Resolution Concerning Some Major Issues in Comprehensively Deepening Reform, passed at the  Third Plenum (“CCP Resolution”) (Chinese language version is found here.  That Resolution called for China to “resolve issues of overlapping responsibilities and many-headed law enforcement, and establish administrative law enforcement systems with unified powers and high-efficiency authority” and to “perfect mechanisms to link administrative law enforcement with the criminal judiciary”.  China is once again “crossing the legal reform river by feeling the IP stones.”

Another important area is in general judicial transparency and reform.  SPC President Zhou Qiang discussed the importance of publishing court decisions involving intellectual property in an important exchange he had with Chief Judge Rader on October 16 of this year.  Since that time, according to press reports, the newly appointed SPC President has vowed to increase transparency in the judicial process in light of the spirit of the recently concluded Third Plenum. 

But transparency includes more than publications of decisions.  Chief Judge Rader has informed me that at the meeting between SPC President Zhou and Chief Judge Rader, Zhou inquired at length about the CAFC practice of publishing the verbatim version of arguments within minutes on the internet, a practice that Zhou might have compared with broadcasts made during the Bo Xilai trial.  In addition, Chief Judge Rader expressed praise for the civil procedure and trademark reforms, which have introduced greater transparency and accountability, including permitting a measure of compulsory discovery of adverse evidence held by an opposing party.  The transparency of judicial decisions generally was also raised in the CCP Resolution, which provided that China should:  “Move towards open trials and open prosecutions, record and maintain materials from the entire court process, strengthen the rationality of legal documents, and promote openness of valid court judgment documents.”

Another important judicial reform that could be significant for IP in the CCP Resolution involves “explor[ing] the establishment of judicial jurisdiction systems that are suitably separated from administrative areas, guarantee the uniform and correct implementation of State laws” and to “reform the trial committee system, perfect case handling responsibility systems for presiding judges and collegiate benches, let those hearing the case judge, and those judging the case be responsible.” The former, if fully implemented, would support greater independence of the courts from the local governments that fund them, and the latter would dilute influence from adjudication committees and return decision-making power to judges who hear cases.  As it is possible that a disproportionate number of foreign-related cases are decided by adjudication committees, this could be a significant development.

A third area of reform is in specialized IP courts.  The 2008 National IP Strategy stated that China would “study the jurisdictional issues for the appropriate concentration for adjudication of patent and other technologically complex cases, and will investigate establishing an appellate IP court.”  The CCP Resolution states that China would “explore the establishment of intellectual property rights courts.”

Compared to the National IP Strategy, the CCP Resolution is a higher political statement.  Moreover, its substance is not limited to appellate courts, nor constrained to “technologically complex cases”.  While in 2008 an appellate IP court had been considered necessary to provide protection from local influence, the CCP Resolution notes elsewhere and more generally that China should establish “judicial jurisdiction systems that are suitably separated from administrative areas”.   One conclusion: the necessity of having courts that are less tied to local influence has migrated from an IP-related topic in the 2008 National IP Strategy, to one involving general legal reform.

Several courts are already moving to establish specialized IP courts.  At a recent program I attended in Suzhou sponsored by Renmin University, the President of Jiangsu’s High Court noted that Jiangsu is actively preparing for establishing such a court.  Moreover, the media has noted that Guangdong is also conducting research efforts for its establishment. Both jurisdictions are pioneers in combining civil/criminal and administrative IP jurisdiction in one tribunal.  Beijing was the first jurisdiction to establish IP tribunals in its intermediate courts (1993), and is probably the most important place where greater improvements could assist both foreign and domestic rights holders, as it is the jurisdiction where appeals from the patent and trademark offices are held.  As I have noted in a prior blog,  foreign parties are involved in approximately 47% of that IP administrative appeal docket.   

Former Supreme People’s Court IPR Tribunal Chief Judge Jiang Zhipei has also been a strong advocate for specialized IP courts in Beijing because of its national and international influence.   I share the hope of my friend Chief Judge Jiang that the CCP Resolution will help accelerate the establishment of these specialized IP courts and even more importantly, improve the adjudication of all legal issues matters for Chinese and foreigners alike.

 

 

 

Here’s the flyer for the GW Program:GWU Dec 11 Program