Place: Insights / Perspectives / Detail
IP Litigation in China: Strengthening Protection
2022-05-18Zhanke Li | Yongpan Sheng | Ying Mu

The outbreak of the COVID-19 pandemic has posed new challenges as well as opportunities for global intellectual property ("IP”) protection. The number of IP applications in China has shown a steady growth trend after a brief slowdown in 2020. Significant progress has been made in China’s reform of the intellectual property system in a timely and effective manner.


Since the 18th National Congress of the Communist Party of China, the Central Committee of the Communist Party (“CPC”) has placed IP protection in a more prominent position. From 2013 to June 2021, Chinese courts accepted 2.181 million first-instance IP cases of various types, and concluded 2.06 million cases. Among them, there are 143,000 patent cases, 1.316 million copyright cases, 437,000 trademark cases, and 18,000 technology contract cases. China has become the country with the largest number of IP cases, especially patent cases, and has one of the shortest trial period.


The Development of Intellectual Property Legal System


The intellectual property legal system has been continuously improved. The Civil Code of the People's Republic of China promulgated on May 28th, 2020, provides more detailed provisions on the subject matter of intellectual property, punitive damages, technology contracts, and trade secrets. In 2019, the National People's Congress revised the Trademark Law and the Anti-Unfair Competition Law. In 2020, the Patent Law and the Copyright Law were revised. In the same year, Amendment (XI) to the Criminal Law of the People's Republic of China was adopted, which revised the provisions regarding crimes of infringing intellectual property rights.


Strengthening the judicial protection of trade secrets. In September 2020, the Supreme People's Court of P.R.C. promulgated the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Civil Cases Involving Infringements upon Trade Secrets, which detailed provisions on the protection of trade secret, confidentiality obligations, infringement standards, and civil liabilities, unified judgment standards, and increased the cost of intellectual infringement.


Improving the pharmaceutical patent linkage system. In line with the pharmaceutical patent linkage system in the revision of the Patent Law, the National Medical Products Administration and the National Intellectual Property Administration issued the Implementation Measures for the Mechanism for Early Resolution of Drug Patent Disputes (for Trial Implementation) on July 4, 2021.


Continuing to improve international influence. China has gradually established a comprehensive intellectual property system in line with common international practices, and has joined almost all major international conventions in the field of intellectual property. In April 2020, the Beijing Treaty on Audiovisual Performances entered into force, which is the first international treaty on intellectual property signed in China and named after a Chinese city.


The Rules of Intellectual Property Litigation Consummate Gradually


Establishing the punitive damages system. Article 1185 of the Civil Code clarifies that the punitive damage is a supplemental remedy to the infringement compensation mechanism. Accordingly, China has successively added punitive damages clauses when revising the Anti-Unfair Competition Law, the Patent Law, and the Copyright Law. Meanwhile, the Interpretation of the Supreme People's Court on the Application of Punitive Damages in the Trial of Intellectual Property Infringement Civil Cases, which came into effect on March 3, 2021, specifically clarifies the practical rules of the punitive damages system.


Improving evidence procedures for intellectual property litigation. On November 16, 2020, the Supreme People’s Court promulgated the Several Provisions of the Supreme People's Court on Evidence in Civil Procedures Involving Intellectual Property Rights, focusing on improving the procedure of evidence submission, evidence obstruction, evidence preservation, and judicial appraisal. The prevention of secondary disclosure of trade secrets has been specified in detail.


Enhancing the enforcement of intellectual property cases. On December 10, 2020, the Supreme People's Court published the Guidelines for the Enforcement of Judgments concerning Intellectual Property Rights, which aims to facilitate the parties to apply for compulsory enforcement and ensure that the effective judgments of intellectual property cases could be promptly enforced in accordance with the law. The Guidelines clarifies the specific scope of intellectual property cases, and at the same time, makes provisions on the scope of enforcement, procedures, measures, and remedies for intellectual property civil and administrative cases.


Judicial Reform of Intellectual Property Court


Improving the professional court system for intellectual property. In 2018, China established the Intellectual Property Court of the Supreme People's Court to hear patent and other technical intellectual property appeals across the country. In 2020, the Hainan Free Trade Port Intellectual Property Court was established after the Beijing, Shanghai, and Guangzhou Intellectual Property Courts. Many IP courts or tribunals have set up specialized tribunals or collegial panels for certain types of cases to improve their specialized adjudication capabilities. For example, on September 26, 2021, the Guangzhou Internet Court announced the establishment of a "Specialized Collegial Panel for Data Related Disputes" (the "Data Collegial Panel") to hear data-related cases involving personal information protection and data security. According to the Guangzhou Internet Court, the Data Collegial Panel will focus on fields closely related to data market, such as virtual property, data property rights and interests, personal information protection, Internet market competition order, artificial intelligence technology, etc.


Chinese Courts have carried out the "three-in-one" reform to enable intellectual property courts to hear all intellectual property cases related to civil, administrative, and criminal law in a unified manner. Besides, in September 2020, the Interpretation (III) of the Supreme People's Court and the Supreme People's Procuratorate of Several Issues Concerning the Specific Application of Law in the Handling of Criminal Cases Involving Infringements upon Intellectual Property Rights was published, which clarified the standards of conviction and heavier penalties for criminal cases of intellectual property rights.


Strengthening the guidance of intellectual property cases. To unify the application of laws, Chinese courts have established a case guidance system consisting of guiding cases, bulletin cases, and typical cases, set an intellectual property case database and adjudication rule database, and published Guiding Opinions to strengthen the retrieval of similar cases.


Accompanied by both challenges and opportunities, China is taking advantage of the trend, embracing challenges actively and turning crises into opportunities during the COVID-19 pandemic. Undoubtedly, China has made a tremendous achievement in intellectual property protection.