What the Supreme People’s Court’s Data For 2013 Shows

During this past week, when world IP day is celebrated (April 26), the Supreme People’s Court once again released its white paper on Intellectual Property Protection by the Courts, available on line at the website of former Chief Judge Jiang Zhipei: http://www.chinaiprlaw.cn/file/2014042732499.html (English) and http://www.chinaiprlaw.cn/file/2014042732497.html (Chinese).

The data shows some interesting developments.

Growth Has Slowed Down And Foreigners Continue to Play a Relatively Small Role.  The increase in the number of first instance civil cases received by all the local people’s courts have fell from the previous year’s growth rate of 45.99% to 1.33%, to about 90,000 cases.   Newly received first instance administrative and criminal cases have also seen a changed trend, from prior year increases of 20.35% and 129.61%, to a decrease of 1.43% and 28%.  Despite these trends, the number of first instance civil cases of intellectual property disputes involving foreign parties has grown, with  a year-on-year increase of 18.75%. This still amounted to only a slight increase in the percentage of foreign related IP cases in the Chinese courts dockets, or 1,697 out of 88,286, a growth to 1.9% of the civil docket from last year’s 1.6%.

Trademark Cases, Licensing Cases and AML Cases Showed Growth. There were 9,195 patent cases, 5.01% lower than 2012; 23,272 trademark cases, 17.45% higher; 51,351 copyright cases, 4.64% lower; 949 cases involving technology agreements, 27.21% higher; 1,302 cases involving unfair competition (of which, 72 were first instance civil cases involving monopoly disputes), 15.94% higher.  No data was released on civil trade secret cases.  The decline in patent disputes and increase in technology transfer cases is somewhat surprising, as one would expect growth in both areas in light of the rapid growth in China’s patent office and in China’s desires to become more innovative.

Provisional measures still are rarely granted.  The courts accepted 11 cases involving application for preliminary injunction relating to intellectual property disputes; 77.78% were granted approvals.  One hundred and seventy three applications for pre-trial preservation of evidence were accepted, and 97.63% were granted approval, and 47 applications for pre-trial preservation of property were accepted, and 96.97% approved.

Of course, one might ask if approval rates for provisional measures are so high, why then are applications for preliminary injunctions only about .01% of the total of disposed cases? The answer seems to be that cases are being rejected in the Case Filing Division of the courts, as I have previously discussed (https://chinaipr.com/2012/03/24/case-filing-in-chinas-courts-and-their-impact-on-ip-cases/).   Still there have been some positive signs: the Civil Procedure Law amendments provide for a more expanded role for the courts, the courts granted provisional measures in trade secret cases, and Beijing’s newly established in Beijing Third Intermediate Court, which has jurisdiction over the Beijing headquarters of many multinationals and a large foreign docket, may also play an active role.

Foreigners Continue to Play an Active Role in Administrative Litigation.  In 2013, the local courts accepted 2,886 intellectual property-related administrative cases of first instance, which was basically no change from last year. Of those accepted, the breakdown by intellectual property branch and percentage change compared to last year is as follows: 697 patent cases, 8.29% lower; 2161 trademark cases, 0.51% higher;  3 copyright cases, no change from last year; 25 cases of other categories, 66.67% higher.   Among the disposed first instance cases, those involving foreign parties or Hong Kong, Macao or Taiwan parties were 45.23% of the concluded intellectual property-related first instance administrative cases (1,312).

Criminal Cases Continue to Decline, Trade Secret Cases Are Relatively Few.  In 2013, new filings for intellectual property-related criminal cases of first instance handled by local courts, were reduced by 28.79% to 9,331 cases.   Trademark and trademark-related cases dominated amongst the disposed cases (4,957).  Amongst the non-trademark cases, 1,499 cases involved copyright infringement, and 50 cases involved infringement of trade secrets, or about 1% of disposed cases.

Transparency In Published Decisions Is On the Increase.  As at end 2013, 61,368 legally effective written judgments for intellectual property disputes issued by the people’s courts of all levels have been published.  By comparison the CIELA.CN database has analyzed about 25,877 cases as of today.

The SPC is Also Actively Participating in Trade Talks.  The SPC has sent representatives to participate in intellectual property work groups meetings between China and the United States, Europe, Russia and Switzerland, as well as in international meetings on negotiations of China-Switzerland and China-Korea free trade agreements.

The Back Story on the Third Plenum IPR Language

Former SIPO Commissioner Tian Lipu recently revealed the “legislative history” of the language in the Third Plenum regarding IP, as reflected by former Chief Judge Jiang Zhipei in his chinaiprlaw.cn blog (http://www.chinaiprlaw.cn/file/2014020731400.html).

The original language being discussed was that China would “Implement the National IP Strategy and Strengthen IP Protection.”(“实施知识产权战略,加强知识产权保护”).  This was, indeed the language circulated in August 2013, and did not reflect much change from prior years.  A proposed change in language at that time was “Deepen the National IP Strategy,  Strengthen the Practical Protection of IP.” (“深入实施知识产权战略,切实加强知识产权保护”).

Ultimately, the final language was “Strengthen the Utilization and Protection of IP, Investigate Establishing a Specialized IP Court” (“加 强知识产权的运用和保护,探索建立知识产权法院”).   In the words of former Commissioner Tian, the placement of “utilization” as the first priority was a new development. The language regarding specialized IP courts was inspired by the National IP Strategy (2008) which had originally taken up this issue, and promoted it to reduce local influence and improve national coordination.  However this new language on the courts, according to Tian, supports a next stage of concrete implementation of this proposal.

After the adoption of this proposal, Tian and SIPO were delighted with this language, as they had been concerned that the recent establishment of “too many” High and Intermediate IP tribunals would complicate matters and make it difficult to establish an IP court.  Now, according to Tian, development of a specialized IP court is a development direction for China as well as one that is increasingly recognized by other developing countries.

Commissioner Tian Lipu has made enormous contributions to the development of China’s IP and patent systems and has earned the respect and friendship of many IP officials throughout the globe. It now seems that even as he was preparing to retire, one of his visions for improvements to the IPR system is further down the road to success.

China Transitions: Where People Went in 2011, And Where They Are Headed

Looking back on 2011 and into 2012, it has been a year with considerable transition for individuals following IP issues in China.

There were some important lateral changes in the private sector.   With the Hogan Lovells merger, Doug Clark went to Hong Kong, and Horace Lam left Hogan Lovells for Jones Day in China.  Former Supreme People’s Court IPR Chief Judge, Jiang Zhipei, left the Fangda Partners for King and Wood.  Meanwhile, King and Wood, which already had a large China IP practice, merged with the Australian law firm, Mallesons, which has a Chinese IP practice.  Amongst the more recent retirees from the Chinese government, Xu Chao, of the National Copyright Administration, and Yin Xintian, of the State Intellectual Property Office, both left the government for the Wanhuida law firm.  An Qinghu, the former Director General in charge of the Chinese Trademark Office, also left his parent agency, the State Administration for Industry and Commerce, to work for the Chinese Trademark Association. Continue reading