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Establishment and Present Status of the Intellectual Property Court, a Leader in Chinese Judicial Reform More than 15,000 disputes settled within one year of establishment

Rie Sen (Partner , Patent Attorney JPAA ID NO.13022)

The Chinese Intellectual Property Court specializes in intellectual property rights, and has been established as part of an important measure to reform the central judicial system, based on "the determination*:3 concerning the establishment of the intellectual property courts in Beijing, Shanghai, and Guangzhou" (hereafter referred to as "determination," following the "regulations*2 for somewhat important issues in fully deepening the reform by the Communist China Central *1".
     The Beijing Intellectual Property Court was established on November 6, 2014; the Shanghai Intellectual Property Court on December 29, 2014; and the Guangzhou Intellectual Property Court on December 16, 2014. The Beijing, Shanghai, and Guangzhou Intellectual Property Courts each correspond to the intermediate people's court*4.
(1)  Purpose and background of the establishment of intellectual property courts
  The establishment of the intellectual property court is intended to promote implementation of state innovation and activation of development strategies, to further strengthen the protection of intellectual property through justice, and to ensure protection of intellectual property rights of the lawful interests of citizens, thereby protecting the interests of the public well-being.
  The intellectual property court was established at a good time for building an innovation-type state, a stage when reform was fully deepened, and the conversion and transformation of the economic development system was accelerating. It assumes an important mission*5 in overseeing intellectual property rights and strengthening the protection by justice, making the system sound for the encouragement of technical innovation, and optimizing the environment under the rule of law for scientific and technological creation.
  The intellectual property court is a virtual leader and anticipator, an important part of the full-scale deepening of Chinese judicial reform. In a way, the establishment of the intellectual property court has a significance beyond the purpose of protecting intellectual property, and its management has had a great effect directly on the future developments of judicial reform in China*6.
  Another background result of the establishment of the intellectual property courts is that lawsuits relative to intellectual property in China are now rapidly increasing. In 2014, there was a total of 116,243 litigation cases related to intellectual property; 95,522 civil cases; 9,918 administrative cases corresponding to Japanese suits against trial decision; and 10,803 criminal cases (Fig. 1).
  The details of the civil cases are as follows: 62.3 % (59,493 cases) were disputes over copyrights; 22.4% (21,362 cases) were disputes over trademark rights; and 10.1 % (9.648 cases) were disputes over patent rights (including patents, utility models, and design) (Fig. 2).

  The three districts of Beijing, Shanghai, and Guangzhou, where the intellectual property courts have been established, are experiencing high levels of economic and technological developments, active technological innovation, and a high demand for the protection of innovation. Moreover, there have been many cases related to intellectual property, especially those concerning technology such as patents, hence the need for the establishment of specialized courts, and trial by judges*8
(2)  Jurisdiction of the intellectual property court
 The intellectual property courts established in Beijing, Shanghai, and Guangzhou control predetermined intellectual property cases in their municipalities and provinces, have jurisdiction across those districts (Decision, section 2, paragraphs 1 and 3), and specialize in jurisdiction for civil and administrative cases concerning the intellectual property of first trials with a specialty in patents, new species of plants, layout designs of integrated circuits, and technological secrets*10 (Decision, section 2, paragraph 1). Specifically, the courts are to control subsequent first trial cases within the jurisdiction of their own municipalities.

(i) Civil and administrative cases on patents*11, new species of plants, layout designs of integrated circuits, technological secrets (know-how), and computer software;
(ii) Administrative cases filed against copyrights, trademarks, anti-unfair competition, etc., acquired by a local administrative agency of a division of the State Council or one higher than a city level; 
(iii) Civil cases concerning recognition of famous trademarks (fashi (law interpretation) [2014] No. 12*12, section 1).

  Following the establishment of the intellectual property courts in Beijing, Shanghai, and Guangzhou, the Intermediate People's Court in these cities decided not to accept civil and administrative cases concerning intellectual property rights. Further, the Intermediate People's Courts in Guangdong Province (and other districts), and the lower court in Beijing city, Shanghai city, and Guangdong Province have decided not to accept civil and administrative cases concerning patents, new species of plants, layout designs of integrated circuits, technical secrets (know-how), or computer software, as well as civil cases concerning recognition of famous trademarks (fashi (law interpretation) [2014] No. 12, section 3).
  The Beijing Intellectual Property Court controls administrative suits*13 concerning the grant of right and verification of right on intellectual property in first trials, filed when demanding a trial against a ruling or a decision by the State Council Administrative Department (Decision, section 2, paragraph 2). Specifically, it controls the administrative cases of the following first trials:

(i) In the case of objecting to a ruling or a decision to grant an intellectual property right/verification of a right concerning intellectual property rights of patents, trademarks, new species of plants, layout designs of integrated circuits, etc., by the State Council Administrative Department;
(ii) In the case of objecting to a compulsory license for patents, new species of plants, layout designs of integrated circuits by the State Council Administrative Department, as well as a decision on license fees or rewards for the compulsory license;
(iii) In the case of objecting to a grant of an intellectual property right by the State Council Administrative Department and other administrative actions concerning verification of the right (fashi (law interpretation) [2014] No. 12, Section 5).

  The intellectual property courts handle intellectual property rights such as copyrights, trademarks, or the like of first trials, and appeal cases against administrative decisions in the lower people's courts of the cities of their respective locations (Decision, section 3).
  Appeal cases against the first trial decisions and rulings by the intellectual property courts are examined by the High People's Court in their respective locations (Decision, section 4).

(3)  Present status of the intellectual property court

  In regard to the state of handling of the intellectual property courts established in Beijing, Shanghai, and Guangzhou, a press conference was held on September 9, 2015 by the Supreme People's Court, where various data was publicized (Tables 1, 2, and 3).
  In the intellectual property court of Guandong Province, the total number of accepted cases include 1,842 first trials and 1,306 second trials, in which there are as many as 1,676 cases of patent rights*17. 
As can be understood from the above data, the total number of the accepted cases reached 8,076 eight months after the establishment of the three intellectual property courts.
  The Beijing Intellectual Property Court has accepted 4,965 suits against trial decision. Of the lawsuits accepted by the Shanghai Intellectual Property Court, the percentage of disputes over copyrights reached 54.3 %. By adding thereto the disputes (30.4 %) over patent rights, 84.7 % of the accepted lawsuits concerned the disputes over patent rights. Incidentally, of the 5,622 accepted civil cases of the first trial by the Beijing Intellectual Property Court, public relation cases associated with Hong Kong, Macao, and Taiwan occupy 39.4 %.
  Furthermore, one year after the establishment, the number of accepted cases in each intellectual property court was publicized (Table 4). The total number of accepted cases in the three intellectual property courts reached 15,506, the number of concluded cases amounting to 8,019.
  The establishment of the Beijing Intellectual Property Court, the Shanghai Intellectual Property Court, and the Guangzhou Intellectual Property Court, which have a high specialty concerning intellectual property, are advantageous for the unification of the standards of judgments, improvement in the quality of judgments, and improvement in the efficiency of judgments. In addition, the protection of intellectual property is expected to be strengthened in the future.

 
*1: "Communist China Central" is an abbreviation of "Chinese Communist Party Central Committee".
   Date of visit: March 4, 2016
   "The provisions:3 concerning establishment of intellectual property courts in Beijing, Shanghai, and Guangzhou" (hereinafter referred to as "determination", upon receipt of "provisions for somewhat important issues in full-scale deepening of the reform by the Communist China Central" was adopted in the third General Meeting of the 18th Term Central Committee of Chinese Communist Party on November 12, 2013, in which it is determined to strengthen operation and protection of intellectual properties, to make solid a system of encouraging the technical innovation, and seeking to establish intellectual property courts.
   Date of visit: March 4, 2016
   "The decision concerning the establishment of intellectual property courts in Beijing, Shanghai, and Guangzhou" was passed in the 10th Conference of the 12th NPC Standing Committee on August 31, 2014.
*4: "The Intermediate People's Court" in China is a court equivalent to a district court in Japan.
   Date of visit: March 10, 2016
   Date of visit: March 10, 2016
*7: These data were summed up from the data publicized in "Protection by Jurisdiction of Chinese Intellectual Property Rights" which is a judicial white paper of each business year.  The data of 2014 were obtained from the following site:
   Date of visit: March 10, 2016
   Date of visit: March 10, 2016
:*9:These data were summed up from the data publicized in "Protection by Jurisdiction of Chinese Intellectual Property Rights" which is a judicial white paper of each business year. The data of 2014 were obtained from the following site.
*10: This term corresponds to "know-how" in Japanese.
*11: "専利" in China includes the patent, utility model, and design.
*12: "Regulations on jurisdiction of Beijing, Shanghai, and Guangzhou Intellectual Property Courts" by the Supreme People's Court (fashi (law interpretation) [2014] No. 12).
*13: This is equivalent to the "suit against trial decision" in Japan.
*14: Official site of the Supreme People's Court
   Date of visit: March 11, 2016
   Summarized from the data publicized by "Publication of Establishment and Management Condition of Beijing Intellectual Property Court by Wang Chuang, Deputy President of Supreme People's Court Intellectual Property Court", etc.
*15: Official site of the Supreme People's Court
    Date of visit: March11, 2016
    Summarized from the data publicized by "Publication of Management Condition of Beijing Intellectual Property Court by Su Chi, President of Beijing Intellectual Property Court.".
*16: Official site of Supreme People's Court
    Date of visit: March 11, 2016
    Summed up from the data publicized by Publication of Management Condition of Intellectual Property Court by Wu Kailing、President of Shanghai Intellectual Property Court".
    Date of visit: March 4, 2016
    These are data publicized by Chinese Economy Network on November 9, 2015.
    Date of visit: March 4, 2016
    These are data publicized by Chinese Economy Network on November 9, 2015.
    Date of visit: March 11, 2016
    These are data publicized by China News Network.
    Date of visit: March 4, 2016
    These are data publicized by the official site of Guangdong Province People Government.