China Establishes Specialised IP Courts

On 31 October 2014, the PRC Supreme People’s Court issued the Provisions of the Supreme People’s Court on the Jurisdiction of the IP Courts in Beijing, Shanghai and Guangzhou (“Provisions”). The Provisions took effect on 3 November 2014. The Beijing IP Court was already established on 6 November 2014. The IP courts in Shanghai and Guangzhou will be established successively before the end of this year.

Background

In the past, there were no specialized IP courts in China. Instead, Chinese courts had established specialized IP divisions to hear IP cases.

The number of IP cases in China has increased from 12,000 in 2004 to more than 100,000 in 2013. Almost half of them took place in Beijing, Shanghai and Guangzhou. Due to this rapid growth, on 31 August 2014, the Standing Committee of the PRC National People’s Congress issued the Decision on Establishment of IP Courts in Beijing, Shanghai and Guangzhou (the “Decision”). The Provisions now further implement the Decision.

Jurisdiction of IP Courts

Cases heard by IP Courts

The IP courts in Beijing, Shanghai and Guangzhou have the power to hear the following types of cases:

• first-instance civil and administrative cases involving complex technology issues, including patent cases, new varieties of plants, integrated circuit layout designs, technical trade secrets and computer software,
• first-instance civil cases for recognition of well-known trademarks,
• first-instance administrative cases against administrative acts made by administrative authorities or local governments above county level relating to copyrights, trademarks, unfair competition etc.
• appeals against first-instance civil and administrative cases relating to copyrights, trademarks, technical contracts, unfair competition etc. tried by the district courts of Beijing, Shanghai and Guangzhou.

Exclusive jurisdiction

Besides the above cases, only the Beijing IP Court has the exclusive jurisdiction over first-instance administrative cases involving the authorization and determination of IP rights made by administrative authorities, such as the PRC State Intellectual Property Office, the PRC State Trademark Office etc.

Appeals

Appeals against the judgments of the IP Courts shall be submitted to the Higher People’s Court where the IP Court is located.

Our Comments

According to Article 4 of the Guiding Opinions on the Election and Appointment of Judges of IP Courts, which was issued by the PRC Supreme People’s Court on 28 October 2014, judges in IP courts must have at least six years of working experience in the relevant IP trial work. Further, according to remarks of the presiding judge of the IP tribunal of the PRC Supreme People’s Court, i.e. Mr. Song Xiaoming reported in public media, the IP Courts plan to establish a “technology experts” system to deal with technologically complex IP cases, such as patent cases, computer software cases etc. Technical experts will serve as assistants to the judges to deal with IP cases.

Specialized IP courts can be beneficial for foreign companies, because these courts will have more resources to hear IP matters, should be more experienced and should have special expertise. However, since the judges in IP courts will still have a strong connection with the PRC authorities, it needs to be seen whether the establishment of IP courts will solve the problems of local protectionism and political influence in IP litigation.