Supreme People’s Court Reports to NPCSC on the Operation of IP Courts

In August 2014, the NPC Standing Committee (NPCSC) passed a decision establishing three intellectual property courts (IP courts) in Beijing, Shanghai, and Guangzhou—a reform set forth in the 2013 Third Plenum Decision. On the basis of that decision, the Supreme People’s Court (SPC) further delineated the jurisdiction of the three IP courts in October 2014. (The SPC’s provisions are not available in English, but the China IPR blog has analyzed them in detail in this blog post, which links to a helpful chart outlining the IP courts’ jurisdiction.) The three courts started accepting cases at the end of 2014.

Pursuant to the NPCSC’s decision, the SPC reported to the NPCSC on the first three years of operation of the three IP courts in late August. The purpose of this blog post is to highlight some statistics and developments mentioned in the report and also to flag it for other commentators to conduct further parsing.

Workloads (all statistics as of June 2017)

  • The three IP courts accepted a total of 46,071 cases and concluded (i.e., rendered judgments/verdicts in) 33,135 (71.9%).
  • They accepted 12,935 and concluded 8,274 (64.0%) first-instance cases involving technical expertise, including those concerning patents, new plant varieties, layout designs of integrated circuits, technical secrets, and computer software.
  • They concluded 21,620 civil cases (both on first instance and on appeal), including
    • 7,041 (32.6%) patent cases;
    • 1,462 (6.8%) trademark cases;
    • 11,664 (54.0%) copyright cases;
    • 564 (2.6%) unfair competition and antimonopoly cases.
  • They also concluded 11,113 administrative cases (both on first instance and on appeal). In particular, the Beijing IP court accepted 18,732 and concluded 11,046 (59.0%) appeals over decisions of State Council trade and patent offices regarding patent/trademark licensing and right verification (专利、商标授权确权) (the Beijing IP court has exclusive jurisdiction over such cases). The government lost in 2166 (19.6%) cases.

Select Cases/Developments

  • In Watchdata v. Hengbao (we could not find the ruling online), a patent dispute involving a USB disk-like device that bank customers use to access online banking, the Beijing IP court awarded plaintiff Watchdata Group 49 million RMB in damages (as Watchdata requested) and 1 million RMB in attorney’s fees (calculated using time billed, which was either a national first or the court’s first).
  • In a national first, all seven members of the adjudication committee of the Beijing IP court heard Huayuan Pharm. v. SAIC Trademark Office (think hearings en banc). The court ruled for Huayuan, finding a document issued by the Trademark Office in violation of law (we couldn’t find the judgment in this case either).
  • A total of 90 “quota judges” (员额法官) have been appointed to the three IP courts, with 78.9% having a Master’s degree or above. The courts have hired 195 judges’ assistants (法官助理) and clerks (书记员), as well as 27 administrative personnel.
  • The IP courts have each established a technical investigation office (技术调查室), staffed by a total of 61 technical investigators (技术调查官). Judges have consulted the technical investigators in 1,144 cases. (According the deliberation opinions on the SPC’s report published a few days ago, some NPCSC members think that the establishment of these offices and the use of these investigators have no basis in the procedural laws or in the NPCSC’s authorization decision. They argue that, were the use of technical investigators truly necessary in IP cases, the NPCSC should either amend relevant laws or authorize the SPC to carry out such pilot programs.)

Problems

  • There have been more cases filed in the IP courts than expected, and the caseload continues to increase.
  • There is a lack of mechanisms for attracting, retaining, and training high-quality talents.
  • The large number of courts that hear IP appeals tend to lead to differing application of law across the country.

SPC’s Recommendations to NPCSC

  • Authorize the IP courts to conduct pilot programs allowing a single judge to preside over simple, first-instance civil and administrative cases. (Some NPCSC members have reservations about this recommendation. They seem to think that having a single judge hear cases would lead to a decrease in adjudication quality.)
  • Conduct special inspection of the work of the IP courts (presumably so that the NPCSC could gain first-hand knowledge of the courts’ operation);
  • Research mechanisms for adjudicating IP appeals at the national level. (The China IPR blog has written back in May that the SPC had decided to recommend that the NPCSC establish a single national appellate IP court, similar to the Federal Circuit in the U.S.).
  • Establish more intermediate-level IP courts as appropriate. (The same China IPR post has noted that SPC would also recommend the establishment of additional intermediate-level IP courts in Chengdu, Nanjing, Suzhou, and Wuhan).

The NPCSC could act on these recommendations as early as late October, when it convenes for its next session.


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