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Wednesday, October 29, 2014

China to establish specialised IP Court

By Tracy Lu, Associate

The PRC National People's Congress Standing Committee passed a Decision on 31 August to establish specialised intellectual property courts in Beijing, Shanghai and Guangzhou. This post takes a look at the Decision and its implications.


What will an IP Court do?


According to the Decision, an IP Court will be the court of first instance for 'technically complex' civil and administrative IP matters,  examples of which are listed as patents, new plant varieties,  circuit layout designs and trade secrets matters. An IP Court's decision in these matters can in turn be appealed to the high court of the province or city in which the IP Court is located.

The IP Court in Beijing (but not in the other two cities) will also have jurisdiction over first instance court proceedings which are brought to appeal administrative decisions made by the State Department in respect of administrative matters to do with the granting and affirmation of intellectual property rights.

In addition, the IP Court will serve as the appellate court for decisions made by local courts of the province or city in which the IP Court is located on civil and administrative IP matters, examples of which are listed as copyright and trade marks matters.

It was apparently hotly debated among Standing Committee members before the Decision was released whether the jurisdiction of the IP Courts will extend to criminal matters, but in the end it was decided that it should not. So far, there has been limited experience with adjudicating criminal, administrative and civil IP matters all in the same court – the Intellectual Property division of the Beijing Intermediate Court only started taking on criminal IP matters, in addition to administrative and civil IP matters, this year and, as of August, such criminal matters made up only 0.6 per cent of all IP matters accepted for adjudication at that court.

For the first three years after the implementation of the Decision, the jurisdiction of the IP Courts will be limited to the province or city in which the relevant court is located, although it is envisaged that they may eventually have 'cross-territorial power' and that their jurisdiction will extend to other provinces or cities.

Work of the IP Courts will be supervised by the high court of the province or city in which the IP Court is located, as well as by the Supreme People's Court.


When will the changes take place?


The Decision is effective immediately and the implementation period is three years. However, there are reports that preparations are already underway for the IP Courts to be open and in operation by as early as the end of 2014.


Who will sit on the bench?


Presidents of the IP Courts will be appointed by the National People's Congress Standing Committee, while the deputy president, chief justice, judicial officers and judicial committee members of the court will be appointed by the local People's Congress Standing Committee of the province or city in which the IP Court is located.


What does it mean?


The Decision, having only eight items, does not offer a whole lot of detail as to how the reform would be carried out on a practical level. For example, it is unclear what the Decision means for courts with existing jurisdiction over IP matters, although in Guangzhou, it has been confirmed that the IP Court will replace the Intellectual Property division of the Guangzhou Intermediate Court, which was first established in 1994.

The Decision does indicate, however, at least a desire on the Government's part to implement a more uniform, national scheme for the adjudication of IP disputes. This may resolve some of the existing concerns expressed by businesses and practitioners in relation to the differing levels of experience or technical expertise between judicial officers or the differing applications of IP laws by  judicial officers, of various courts in various jurisdictions in China.


What next?


Since the Decision was issued, two other major IP initiatives were launched in Shanghai at the end of September, being the establishment of the Chinese Courts Intellectual Property Legal Protection International Exchange (Shanghai) Base and the establishment of an intellectual property office for the (Shanghai) Pilot Free Trade Zone.

This important move of establishing specialised IP courts, once implemented, will hopefully lead to a better awareness and understanding of IP rights protection among the general public and the business community in China, and a more harmonised and robust approach to IP enforcement across the country.

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