NPCSC Revises Judicial Personnel Laws, Amends Trademark and Unfair Competition Laws

The 13th NPC Standing Committee (NPCSC) concluded its 10th session on Tuesday. It adopted comprehensive changes to the two laws governing judges and procurators and approved relatively minor amendments to eight other laws, three of which aim to enhance intellectual property protections. Below we summarize each in turn.

To start, the NPCSC revised the Judges Law [法官法] and the Procurators Law [检察官法] to codify aspects of the recent judicial reforms that relate to judges and procurators. Both revised laws include eight chapters, governing issues ranging from the duties and obligations of judicial personnel to their selection and qualifications. Because most provisions in the two laws are identical, except for judge/court- or procurator/procuratorate-specific terms, the following discussion of the revised Judges Law also applies (by analogy) to procurators.

  • Selection. Each provincial high court is required to establish a judicial selection committee, with at least one-third of its members being judges (art. 16). The committees are charged with vetting the “professional competence” of new judges (id.), who in general should start at basic-level courts (art. 17). Judges in high-level courts are generally selected from lower-level courts (id.). The revision also provides for the open selection of judges from experienced lawyers and legal scholars (art. 15).
  • Qualifications. To be eligible to serve as judge, a person must “uphold the leadership of the Communist Party of China and the socialist system” (art. 12). He or she should generally also have an undergraduate law degree and five years of work experience—hence be at least 27 years old (art. 12). (The work-experience requirement is slightly relaxed for those with masters or doctoral degrees in law.) Addressing the long-standing issue that “court presidents have been appointed more for their political than legal expertise,” the revision explicitly requires that they have “legal expertise and legal professional experience” (art. 14).
  • Quota System. The revision writes into law the judge “quota system” [员额制], under which no judge may be appointed to a court if its quota—the fixed number of judgeships—has been filled (art. 25). Each province has a fixed quota of judges, determined based on factors including that province’s population and number of cases (id.). Within a province, the overall quota is “dynamically” allocated among the various courts, with priority given to basic-level courts and courts with large volume of cases (id.). The Supreme People’s Court (SPC) has its own quota (id.).
  • Discipline. A judge may be disciplined for carrying out one of the acts listed in article 46. Among them are “intentionally violating laws or regulation in handling cases” and “causing errors in rulings and serious consequences through gross negligence.” Whether a judge has done either is to be determined by the relevant provincial judicial disciplinary committee or the SPC’s judicial disciplinary committee from “a professional perspective” (art. 48). Half of such a committee’s members must be judges (id.). The committees’ determinations appear advisory only, however.
  • Job Security. The revision adds a series of professional protections for judges. For example, judges may not be removed from their posts unless for reasons provided by statute (art. 53). No entity or person may request that they engage in tasks beyond the scope of their legally prescribed duties (art. 54). And they (and their close relatives) must be protected against dangers to their personal safety (art. 56).

The revisions also give legal status to judge assistants [法官助理] and procurator assistants [检察官助理], who are responsible for reviewing case materials and drafting legal documents under the supervision of judges and procurators, respectively.

The revised Judges Law and Procurators Law will take effect on October 1, 2019.

Moving on. The NPCSC also approved amendments to eight laws to “ameliorate the business environment.” Below we will focus on the three amendments that concern intellectual property rights.[*]

The amendment to the Trademark Law [商标法] first seeks to penalize “bad-faith trademark registrations without intent to use” (art. 4 as amended), also known as “trademark squatting.” It directs the Trademark Office to deny bad-faith applications (id.) and prohibits trademark agencies (on pain of a warning or fine) from taking on clients who intend to file such applications (art. 19). Trademarks that have already been registered in bad faith will be declared invalid (art. 44). The amendment also imposes heavier penalties for infringement by—

  • authorizing quintuple damages for “malicious” [恶意] trademark infringements (art. 63);
  • increasing the maximum statutory damages to 5 million RMB from 3 million (id.);
  • allowing the courts to order destruction of articles with counterfeit registered marks and of tools and materials used to manufacture such articles (id.); and
  • authorizing the courts to sanction malicious filing of trademark lawsuits (art. 68).

The amendment to the Trademark Law will take effect on November 1, 2019.

The amendment to the Law Against Unfair Competition [反不正当竞争法] focuses on strengthening trade secret protections. First, it changes the definition of trade secrets to include all “trade information” [商业信息], not just technical information and “business information” [经营信息]. Second, it adds two new types of misappropriation: acquiring trade secrets through “hacking” [电子入侵] and “instigating, inducing, or assisting in” breach of a duty of confidentiality by others to “acquire, disclose, use, or allow others to use” trade secrets (art. 9). Third, the amendment subjects all entities and individuals—not just “business operators” [经营者]—to the Law’s prohibitions on the misappropriation of trade secrets (id.). Fourth, like the Trademark Law amendment, it provides for quintuple damages for malicious trade secret infringement and increases the maximum statutory damages to 5 million RMB. Finally, the amendment reverses the burden of proof in civil trade secret suits when the plaintiff makes certain prima facie showings (see art. 32).

Finally, the amendment to the Administrative Licensing Law [行政许可法] contains two main provisions. First, it prohibits those involved in licensing proceedings from disclosing an applicant’s “trade secrets, undisclosed information, or confidential business information” without the applicant’s consent or unless otherwise authorized by law (art. 5). Before an administrative agency discloses such information, it must allow the applicant to make an objection (id.). Second, an agency must not condition the grant of a license on the transfer of the applicant’s technology (art. 31). Nor may it directly or indirectly demand technology transfer in the course of implementing the license (id.).

The amendments to the Law Against Unfair Competition and the Administrative Licensing Law have already taken effect.

We expect the NPCSC to release its 2019 legislative and oversight plans and solicit public comments on the following bills later this week:

It may also seek comments on a draft revision to the Securities Law [证券法].

[*] The other five laws amended are the Construction Law [建筑法], Fire Control Law [消防法], Electronic Signatures Law [电子签名法], Urban and Rural Planning Law [城乡规划法], and Vehicle and Vessel Tax Law [车船税法].

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