News | China and Cross-Strait

 

New Intellectual Property Courts to be Established in Nanjing, Suzhou, Chengdu and Wuhan

 

Source from China Enterprise Intellectual Property

Mainland China has at present three IP courts: one in Beijing, one in Shanghai, and one in Guangzhou. These courts were established in August of 2014 in accordance with the "Decision of the Standing Committee of the National People's Congress Regarding the Establishment of Intellectual Property Courts in Beijing, Shanghai, and Guangzhou" (hereinafter referred to as "the Decision"). As stipulated by the Decision, the Supreme People's Court provided a report to the Standing Committee of the National People's Congress regarding the implementation of the intellectual property courts within three years of the Decision. This report was given in the form of a working symposium in Shanghai. It concluded that the three IP courts established in 2014 were effective in the discharge of their duties.


Following the success of the courts in Beijing, Shanghai and Guangzhou, the Supreme People’s Court has approved the establishment of specialized tribunals in Nanjing, Suzhou, Wuhan and Chengdu, which will handle cross-regional IP cases. The fact that the Nanjing and Suzhou IP courts have already been inaugurated indicates that Mainland China already has plans to increase in number Intellectual property courts and tribunals, and that it will continue to reform the way in which it hears IP-related cases.


At present, the IP courts in Beijing, Shanghai and Guangzhou as well as the four specialized tribunals in Nanjing, Suzhou, Wuhan and Chengdu are chiefly courts of first instance which handle technical matters. If an IP protections appellate court is established in the future, it shall act as a court of both first and second instance and shall have special jurisdiction (Note: In Taiwan, this concept is termed "Exclusive Jurisdiction").


The establishment of specialized tribunals for IP cases is an integral part of Mainland China's economic strategy. The decision to establish courts in Chengdu, Wuhan, Nanjing and Suzhou was indeed a wise one as said cities are located along the upper, middle and lower reaches of the Yangtze River Economic Zone. Furthermore, it has also been reported that the Beijing IP court will possible handle technical cases from Tianjin Municipality and Hebei Province in addition to handling those from Beijing.


An important characteristic of the aforementioned cities in which the new courts will be or have been established is that those four cities have relatively high level of economic development as well as strong foundation for technological innovation. Furthermore, the will to establish specialized Intellectual property courts there is very strong. For example, Jiangsu Province incorporated the provision: "shall strive for the establishment of IP protection courts" into its “13th Five-Year-Plan for the Development of Intellectual Property Rights." Additionally, Jiangsu Province over 29 thousand firms applying for patents of which are 73 firms which were granted the status of national IP Demonstration Enterprises or Advanced Enterprises by the State Intellectual Property Office, the highest of any Chinese province.  Sichuan Province has 37 “pilot and demonstration countries with exemplary intellectual property protections,” the most of any Chinese province.


Mainland Chinese IP protections cases are divided into technical cases and common cases. Technical cases deal with items such as patents, technical know-how, computer software and integrated circuit layout and design. Common cases deal with items such as trademarks, copyright and unfair competition cases. Because there are many types of intellectual property to protect, professional requirements are getting higher and higher, thus necessitating the creation of intellectual property tribunals. Through reasonable administration China can achieve the scientific division of labor, which in turn will increase efficiency. The sphere of jurisdiction of the four new specialized patent protection tribunals will in fact take into account the professional division of labor in question.


In addition, the caseload for the four aforementioned cities is rather high and the demand for specialized institutions for this division of labor is getting even higher. The result is that judges are getting even more experienced in dealing with this area of law. For example, in 2016, Jiangsu province handled 6,390 patent cases, the highest of any province in the country.


A major focus in Mainland China's judicial reform in the area of how it handles IP cases will be specialization and de-bureaucratization. Thus, it is expected that the future trend of IP adjudication is that it will be more centralized as well as more cross regional. The Supreme People’s Court revealed that the Chengdu and Wuhan IP courts shall have jurisdiction over technical cases in Sichuan and Hubei respectively while the Nanjing and Suzhou IP protection courts will have jurisdiction over technical cases in prefectural cities in Jiangsu province, where both Nanjing and Suzhou are located.


The jurisdiction of the intellectual property courts will be further centralized in the future, thus making it the case that the jurisdiction of the courts will go beyond the provincial level. The Supreme People’s Court plans to establish the "Beijing-Tianjin-Hebei Cross-Regional Work Leading Group for the Hearing of Technical Cases," which will be responsible for coordinating the reform of the IP case adjudication system.


Even so, it is impossible so establish an intellectual property court in every province. Mainland China currently has nearly one-hundred intermediate courts which are qualified to hear technical intellectual property cases. Currently, the technical cases for the entirety of Guangdong Province are heard by Guangzhou's Intellectual property court. However, the Supreme People's Court has granted the Shenzhen Intermediate People's Court the authority to continue hearing some technical cases. In practice, this has allowed Shenzhen's caseload of intellectual property cases to exceed that of the court in Guangzhou. These cases can be quite complicated and often involve many foreign-related cases. Thus, the average person in the judiciary believes that the court in Shenzhen meets the conditions for becoming a full-fledged intellectual property court.


Because of the precedent set by Guangdong and Shenzhen, Intellectual property courts were established in Nanjing and Suzhou respectively. The Supreme People's Court ruled that: the Suzhou Intellectual property court shall only have jurisdiction over Suzhou City, Wuxi, Changzhou and Nantong. The remaining nine prefecture-level cities in Jiangsu province fall within the jurisdiction of the Nanjing Intellectual property court.


The IP Court in Guangzhou was created at a time when Mainland China lacked experience in IP-related matters, resulting in an imperfect system. This is shown by the fact that the Guangzhou IP Court answers directly to the Guangzhou Municipal People's Council, the organ which also appoints the court's presiding judge. Despite being under the jurisdiction of the Guangzhou Municipal People's Council, the Guangzhou IP Court is tasked with hearing all IP-related cases filed within Guangdong Province. However, because the four IP tribunals in Wuhan, Chengdu, Suzhou and Nanjing are technically not courts, they therefore have greater flexibility in the selection and appointment of their personnel.


After the establishment of the Guangzhou IP Court, it became the case that it only had centralized jurisdiction for technical cases in Guangdong Province. But other intermediate courts, which hear IP cases, have not yet been disestablished and as such continue to hear common IP cases. The four new specialized tribunals are designed in a similar fashion. They only have centralized jurisdiction over certain technical cases.


It is important to note that the Suzhou and Nanjing IP Court will also hear IP criminal cases of first instance from local intermediate courts. IP courts shall adjudicate on civil, administrative and criminal IP cases. However, the Criminal Procedure Law of Mainland China stipulates that the first instance of IP infringement cases must be handled by the lowest court. Thus, in order to avoid this, when the intermediate-level IP court was established its sphere of jurisdiction excluded criminal cases. The four aforementioned tribunals have jurisdiction over criminal cases, making them the exception to the rule about criminal cases.


Now that it is 2017, it has now been three years since the IP court pilot program was first put into place. The next phase of this program includes: the establishment of an IP appellate court. The aforementioned court will serve to create a unified standard for decisions passed on IP-related cases. Some scholars have pointed out that it is possible to set up a single national IP appellate court in Beijing. However, considering forum convenience, lower courts or circuit courts which cover a larger area could be established. We will continue to watch the development of IP courts in Mainland China.

 

for any questions relating to this topic, please contact us at cjchen@tsailee.com.tw 

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