Knowledge & News

IP Tribunal in Chinese Supreme Court Hears All Appealed Patent Cases

10 January 2019

On January 1, 2019, the Chinese Supreme People’s Court (SPC) inaugurated its Intellectual Property (IP) tribunal located in Beijing, which becomes the top judicial authority for patent cases as well as other highly technical IP cases. This represents a big leap forward in Chinese court litigation practice, and highlights China’s willingness to harmonise its IP protection system with the rest of the world.
 
In particular, according to provisions in the Regulations for the IP tribunal promulgated by the SPC on December 27, 2018, the IP tribunal shall hear all appeals against first instance civil judgments or rulings made by the Higher People’s Court, IP court or Intermediate People's Court in cases concerning invention patents, utility model patents, new plant varieties, layout design of integrated circuits, know-hows, computer programs and anti-trust. The IP tribunal shall also hear appeals against first instance administrative judgments related to the above cases, and in addition to design patents. A transitional period has also been set meaning that, for all first instance judgements decided before January 1 2019, their appeals will continue to be handled by existing tiers of courts. The IP tribunal at the SPC only hears appeals against first instance judgments that are newly decided after January 1 2019.
 
The IP tribunal currently has six court rooms which are mainly for appeal cases related to patents. There is also a technical investigation department formed by technical investigators who can provide support to judges to better understand some of the technical points raised in court cases.
 
With the setup of the IP tribunal at the SPC, the court hierarchy for patent litigations in China is effectively simplified. Instead of the conventional structure of basic or middle courts making first instance judgements and provincial-level high courts making second, final instance judgements, the SPC now takes high courts’ roles in making the second instance judgements. Deputy Chief Justice Luo Dongchuan of the IP tribunal said, in a recent news release, that the move will "help prevent inconsistency of legal application and improve the quality and efficiency of trials”. The IP tribunal is also the first among all areas of law in China in which an attempt has been made by the SPC to consolidate second instance judgements.
 
It should be noted that litigation related to infringements on registered designs (which are also a type of patents in China) and trademarks in China do not benefit from this new arrangement. According to Luo, “cases related to high-tech, and cases involving electronics, machinery, and artificial intelligence are more closely linked to innovations, and the standard of judgement needs to be unified. At the same time, China has nearly 200,000 intellectual property court cases each year. A large number of online infringement and trademark infringement cases do not possess a strong technical nature and do not necessarily need to be promoted to the Supreme Court level.” Litigation related to infringements on registered designs and trademarks will continue to be dealt by civil courts.
 
The establishment of this new IP tribunal is a further step by China towards the reform of its litigation system. We previously wrote about the implementation of IP courts in three major cities in China (click here to view) for hearing first instance IP trials starting in 2014, but the question left at that time was how to ensure the quality of second instance judgements given that the second instance judgements were still handled by over 30 provincial-level high courts spread from the western to eastern China, and across highly disparate regions. This often leads to a significant difference in trial time-scales among the provincial high-courts, and even more problematically, can lead to local protectionisms.
 
It is partly as a result of the subjective assessment required for technical contents (e.g. inventive step in patent prosecution, and doctrine of equivalent in patent infringement) that we see this difference in trial time-scales.
 
The civil law system in China also lacks the precedent principle, leaving a huge amount of room for courts to interpret statute. With the IP tribunal at the SPC serving as the final judicial authority for patent cases, more uniformity of decision making and predictability of outcomes can be expected, which brings the Chinese court system in the IP aspect more in line with common law countries such as  the USA and the UK. In addition, although China is in theory adopting a bifurcated system for patent infringement and patent right confirmation, the setup of IP tribunal at the SPC level seems to have ironed out such bifurcation from a technical point of view by centralizing courts for the appeals. It is also interesting to observe that in this way, reforming of the legal systems from the judicial level overtakes that from the legislation level.
 
Any type of reform leaves questions unanswered, and there is no exception with the IP tribunal. Conventionally, the SPC plays an important role of accepting petitions of retrial on the grounds of second instance judgements or orders being erroneously decided. However, if the SPC now itself becomes the trial unit for second instance judgements then which authority is capable of further correcting trial errors made by the IP tribunal? Another concern is that with the centralization of trial works at the SPC, will the trial speed and efficiency remain unaffected? Without a specific court system for lower value claims such as seen in the UK, people may wonder if it is really a good use of resources for the SPC to handle all appeal cases irrespective of the technological complexity, or the damages sought by the parties. The general public therefore will be expecting more judicial opinions and regulations from the SPC to close these loopholes.

Authors

Zephyr Su

Zephyr Su Partner Hong Kong (China) Chinese and Chartered (UK) Patent Attorney

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