SPC Sets Up Team to Work on Civil Law Reform – IP Likely Continues in the Mix


On May 12, the SPC set up a civil law codification team, chaired by Vice Presidents Xi Xiaoming, He Rong, Tao Kaiyuan, with Du Wanhua 杜万华 serving as Director of the Office.  Xi Xiaoming introduced the preliminary work of the SPC in this area.  He noted that the SPC intends to give full play to its experts in an advisory role to the NPC in the codification of civil code as called for in the Fourth Plenum, and in that light the Supreme Court established a consultant and Expert Committee for the codification of the civil code.

My comment: It is particularly gratifying to see former IP officials like Madame Tao Kaiyuan contribute to the work of the civil code. At the same time, we are seeing more civil law law judges working on the development of China’s specialized IP courts, thereby demonstrating increasing cross-fertilization between IP issues and general civil law issues in China.  The more IP is regarded as a private right, the more likely it is that China’s goals of developing an innovative economy can be achieved, IMHO.

Content source: Susan Finder and the Supreme People’s Court website, via the Chinalaw Listserve.

Photo source: Mark Cohen at the April 2015 “First China Intellectual Property Judicial Conference” (with subtitle indicating “under the background of judicial reform”). Chief Judge Song Xiaoming of the SPC IPR Tribunal presenting opening comments.

New Patent JI Released by SPC

On January 29, 2015 (last week) the Supreme People’s Court released the newly revised Judicial Interpretation “The Supreme People’s Court’s Decision on Revising Application of the Law in the Hearing of Patent Dispute Cases” (最高人民法院关于审理专利纠纷案件适用法律问题的若干规定). I previously posted the American Bar Association’s comments on this JI here. The JI came into effect February 1.

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.

SPC President’s Report on Adjudication Highlights Some Key IPR Judicial Developments

SPC President Zhou Qiang spelled out some key IPR judicial developments in report to the National People’s Congress and Chinese People’s Consultative Congress on March 10.  A full text of the report is found on the excellent website of former SPC Chief IPR Judge Jiang Zhipei (picture below).  Here are some excerpts:

As a general matter litigation of all types increased in China in 2013, with case filings at local courts increasing at 7.4% or 14,217,000 cases of first instance in China during 2013.   By comparison, Zhou Qiang reported total IP cases at approximately 100,000.  If this number reflects civil, criminal and administrative cases, as well as IPR-related cases, such as antimonopoly law or crimes involving fake and shoddy goods, it would suggest that there has been no significant increase in IP litigation.  If this number is based on civil cases only, then there has been an increase in the civil IP docket, from about 83,350 in 2013.

Total foreign-related commercial cases numbered only 5,364, out of 3,957,000 commercial cases.   It is humbling to think that in 2012, the last date for which we have comprehensive data, there were only 1,429 and 1,349 civil and administrative foreign related IPR cases, respectively.   Foreign-related IPR cases of all types likely remain a small fraction of the Chinese court docket.

In terms of overall transparency, the court continues its effort to increase judicial transparency, as I have previously noted.  In his report, SPC President Zhou Qiang noted that 3,858 SPC decisions have been placed on line, as have 1,646,000 local court decisions.

The court also notes that one of its goals for 2014 is to promote the establishment of IP court(s), and that it is looking at how to experiment in managing resources for courts below the provincial level, in order to create a degree of  “suitable separation” from local administrative influence to improve the management system of judicial personnel.    Such efforts, if successful, could reduce the amount of local protectionism.Image

Chief Judge Jiang Zhipei, Former USPTO Acting Director Teresa Rea, Mark Cohen (the author) and Shi Lan.

First Guiding Case on Intellectual Property

Stanford’s Mei Gechik reports through Don Clarke’s Chinalaw listserve that Stanford’s Guiding Case project has just made available an English translation of the first guiding case on intellectual property: Shenzhen Siruiman Fine Chemicals Co., Ltd. v. Shenzhen Kengzi Water Supply Co., Ltd. and Shenzhen Kangtailan Water Treatment Equipment Co., Ltd., An Invention Patent Infringement Dispute. (深圳市斯瑞曼精细化工有限公司诉 深圳市坑梓自来水有限公司、深圳市康泰蓝水处理设备有限公司 侵害发明专利权纠纷案 .  This is Guiding Case Number 20.  The English translation is here:  http://cgc.law.stanford.edu/guiding-cases/guiding-case-20.  The Chinese text is available here: http://cgc.law.stanford.edu/wp-content/uploads/2013/12/CGCP-Chinese-Guiding-Case-20.pdfThe case was decided on December 20, 2011 by the Supreme People’s Court and made a “Guiding Case” by the adjudication committee of the SPC on November 8, 2013.  For further information on this project contact: contactcgcp@law.stanford.edu.