BY EUGENE LOW, SKIP FISHER AND DEANNA WONG
The Supreme People’s Court (“SPC”) recently released
its White Paper on Judicial Protection of IPR, 2015 (“中国法院知识产权司法保护状况（2015）, “White Paper”), containing
statistics on IP litigation in China. Significantly, the statistics also
contain the first conclusive data on the operation of the specialized IP Courts
in Beijing, Shanghai and Guangzhou, over a year after they started accepting
cases. The lesson so far is that the specialized IP Courts have proved to be a
robust enforcement avenue for both domestic and foreign IP owners, especially
for complicated IP disputes and technology-related cases.
1- Number of civil IP cases up, number of
administrative IP cases stable
According
to the SPC’s White Paper, in 2015, the courts at various levels accepted a
staggering 109,386 civil IP cases at first instance level (against a total of
123,493 IP cases), and handed down judgments in 101,324 cases.
The
Chinese IP docket keeps on growing, with the 2015 IP docket almost 6% larger
than the 2014 IP docket. The difference between the number of cases filed in
first instance and the number of judgments handed down unfortunately also means
that the backlog of IP cases before the Chinese courts continues to grow.
As to
administrative IP litigation in China (primarily consisting of trademark
prosecution appeals against the CTMO and TRAB), the size of the administrative
IP docket went from 4,887 to a staggering 10,926 in 2015 (i.e. a 123.57%
increase).
2- ‘Foreign-related’ IP cases only a fraction of
Chinese IP docket
The share
of “foreign-related” IP cases remains remarkably small, and keeps on shrinking:
only 1,327 foreign related civil IP cases were decided in first instance in
2015, which is a decrease of 22.6% compared with the 2014 numbers. The amount
of foreign related civil IP cases, as a percentage of the total amount of IP
cases, has dropped from 1.9% (2013), to 1.8% (2014), to 1.2% (2015). See
Chart 1.
In
contrast, no less than 4,928 administrative IP cases, or about 45% of the total
amount, were foreign-related cases, confirming the pre-existing trend of an
outsized foreign administrative docket, and an undersized foreign civil docket.
However,
this dichotomy may be partially due to the fact that the SPC categorises
litigation involving the Chinese subsidiary of a foreign company as domestic IP
litigation, so the total percentage of foreign-related cases (in a broad sense)
may be significantly higher.
Civil cases:
Administrative
cases:
3- Number of patent and unfair competition
cases increases significantly
The
number of patent cases has known a significant increase compared to the other
types of IP cases. Specifically, the Chinese courts accepted no less than
11,607 civil patent cases at first instance level in 2015, which is a 20.3%
increase compared to 2014. In addition, the courts accepted a total of 1,721
administrative patent cases at first instance level in 2015, which is a 219.29%
increase compared to 2014. Most of these administrative patent cases are
appeals against the Patent Review Board’s decisions. In 2015, the Chinese
courts also accepted 2,181 unfair competition cases, which is also a 53.38%
increase compared to 2014.
4- IP Courts cornerstone of IP litigation in China
The IP Courts in Beijing,
Shanghai and Guangzhou were originally set up as a
pilot-project, with the aim of improving the quality of, and professionalism
and uniformity in IP litigation in China. Now over a full year into
their existence, the IP Courts prove to be a cornerstone of IP litigation in
China. According to statistics released by the IP Courts in April 2016, the
Beijing, Shanghai and Guangzhou-based courts have so far accepted a total of
15,287 cases. The Beijing IP Court accepted a total of 8,706 cases, while the
Shanghai court accepted1,641 cases and the Guangzhou court accepted 4,940 cases
(see Chart 3).
However, no less than 74% of the cases that were accepted by the
Beijing IP Court were administrative IP cases (with trademark cases
representing 61%, and patent cases representing 13% of that number). This does
not come as a surprise, given the Beijing Court’s exclusive jurisdiction over
appeals against decisions of the Trademark Review and Adjudication Board and
the Patent Review Board.
After more than a year of
operation, the IP courts pilot project seems to be fruitful. While the
specialized courts are, by themselves, no panacea for some of the pervasive
problems with IP enforcement in China, the new courts are commonly seen as a
step in the right direction: the courts tend to be more willing to tackle controversial issues, seem to be more prepared to
issuepreliminary
injunctions and have granted considerable
amounts of damages to foreign parties in some cases.
An
overview of the types of cases handled by the IP Courts can be found in the
Charts below.
5- Looking towards the future
Apart
from the data about the past above, there are also some exciting new
initiatives and proposals that may have an impact on the efficiency of and
professionalism in IP litigation in China.
To begin
with, during the annual meeting of the National People’s Congress, the
“lianghui/两会“, Vice-Chief Judge of the Supreme People’s Court Tao
Kaiyuan called for the establishment of a central, nation-wide IP Court of
Appeal, that would hear all appeals in IP cases from across the country
(including appeals from the IP Courts). At present, appeals are still heard in
each of the provincial Higher People’s Courts.
Moreover, the Beijing IP Court
has recently introduced a channel to speed up the administrative appeal cases
against trademark refusal decisions by the TRAB and CTMO. If the parties agree,
cases may proceed to a summary judgment with court fees halved and a judgment
handed down in 45 days.
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