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Competition Law and Intellectual Property in China edited by Maniatis, Spyros; Kokkoris, Ioannis; Wang, Xiaoye (31st January 2019)

5 Intellectual Property Courts in China

Duncan Matthews

From: Competition Law and Intellectual Property in China

Edited By: Spyros Maniatis, Ioannis Kokkoris, Xiaoye Wang

From: Oxford Competition Law (http://oxcat.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved. Subscriber: null; date: 23 October 2019

Subject(s):
Monopoly — Intellectual property rights (IPR) — Jurisdictions

(p. 76) Intellectual Property Courts in China

1.  Introduction

When the first specialized Intellectual Property (IP) court in the People’s Republic of China opened in Beijing on 6 November 2014, it marked a milestone in the process of China’s judicial reform. This was followed, before the end of 2014, by two further specialized IP courts in Shanghai and Guangzhou, capital city of Guangdong Province. As a result, while jurisdiction over IP cases still lies with the general courts in other regions of China, in Beijing Municipality, Shanghai Municipality, and Guangdong Province general courts no longer hear civil and administrative cases where the subject matter is specifically related to IP.1

The rationale for setting up specialized IP courts was set out by the Supreme Court of the People’s Republic of China in its 2014 White Paper on Intellectual Property Protection by Chinese Courts, namely that establishing IP courts is a fundamental measure in terms of judicial reform in China as a whole.2 Similarly, the Central Committee of the Communist Party of China (CCCPC) has stated that it considers the establishment of IP courts to be a significant step in the reform of the national scientific and technological base.3

(p. 77) This chapter provides an overview of China’s IP court system, highlighting the process by which the IP courts were set up and assesses how efficiently the courts are operating. The chapter argues that, while specialized IP courts have had a positive effect overall, unresolved issues remain, particularly in terms of the role of technical investigation officers, the operation of the Guiding Cases system, the absence of specialist IP courts of appeal, the lack of jurisdiction over criminal matters in the specialized IP courts, and the need for more effective policies to ensure the recruitment and retention of high calibre judges.

2.  Background to the Establishment of China’s IP Courts

When establishing specialized IP courts in 2014, China drew on its previous experience of setting up intellectual property tribunals in general jurisdiction courts. In addition, China already had experience of implementing the ‘three-in-one’ adjudication model on IP litigation, whereby the general courts are seized to hear disputes relating to civil, administrative and criminal law matters. This process began in the late 1980s, as US-China IP disputes came to the fore, and China faced pressure to improve the protection and enforcement of intellectual property rights within its territory. As a result, China began to explore innovative ways of dealing with IP litigation.

On 5 August 1993 intellectual property tribunals, the earliest specialized IP trial fora in China, were set up within the Beijing Intermediate and High People’s Court. The following year, the Shanghai Pudong New Area People’s Court established its own IP tribunal, the first to be established within the Chinese lower court system. By 1996 an IP tribunal had also been established within the Supreme People’s Court, symbolizing the extent of China’s intention to build an independent system of adjudication with respect to IP issues into its four-tier court system.4 By 2012, according to statistics presented in the 2012 Work Report of the Supreme People’s Court on Intellectual Property Trials, a total of 420 IP tribunals had been set up within China’s general court system.5

A further measure designed to facilitate specialized adjudication in IP cases was implementation of the ‘three-in-one’ adjudication model. The application of law (p. 78) had not been harmonized and different IP tribunals were adopting different approaches when applying the law. This situation was complicated further by the different approaches taken by the courts in proceedings related to civil, administrative, and criminal law, leading to the risk that judges could make contradictory decisions on IP matters.6 A judge of the criminal tribunal, for instance, might hold that a defendant’s conduct was illegal when measured against accepted standards of criminal law and award supplementary compensation in the criminal trial whilst, conversely, the civil tribunal might determine that the conduct in suit did not necessitate the payment of compensation. In order to resolve this problem, a ‘three-in-one’ adjudication model was devised and initially adopted by the Shanghai Pudong New Area People’s Court in 1996.7 By the end of 2013, the ‘three-in-one’ adjudication model, incorporating civil, administrative, and criminal matters within the same court proceedings, had been adopted by seven High People’s Courts, seventy-nine Intermediate People’s Courts and seventy-one Basic People’s Courts across China.8

Building on the initiatives taken with IP tribunals, the establishment of specialized IP courts was first suggested in 2001 by Boming Wu (吴伯明‎), a member of CPPCC (National Committee of the Chinese People’s Political Consultative Conference), who proposed to establish China’s IP courts in the Fourth Session of the Ninth CPPCC.9 This initiated a debate on the necessity and feasibility of a specialized IP court system and, by 2008, significant progress had been made with the State Council announcing, in its Outlines of the State Intellectual Property (p. 79) Strategy, the intention to explore the establishment of specialized IP courts with jurisdiction in particular over highly technical patent cases.10

Subsequently, on 13 November 2013, the Decision of the CCCPC on Some Major Issues Concerning Comprehensively Deepening the Reform, was adopted at the Third Plenary Session of the Eighteenth Central Committee of the CPC (Communist Party of China), highlighting the need for China to strengthen the protection of intellectual property rights, improve mechanisms to stimulate innovation, and explore the possibility of establishing IP courts as part of the wider strategy of reforming the national scientific and technological base.11 Motivated by the CCCPC’s Decision, several prominent municipalities immediately declared their intention to set up specialized IP courts.12 Then, on 6 June 2014, an official plan for establishing IP courts was adopted by the Central Committee of the CPC.

By 31 August 2014, the Standing Committee of the Twelfth National People’s Congress had enacted a decision on the establishment of IP Courts in Beijing, Shanghai, and Guangzhou. This was followed subsequently by the Supreme People’s Court promulgation of the Provisions of the Supreme People’s Court on the Jurisdiction of the Intellectual Property Courts of Beijing, Shanghai and Guangzhou over Cases, which set out the extent of the jurisdiction of the IP courts.13

3.  Rationale for the Establishment of Specialized IP Courts

According to the official sources outlined above, establishing specialized IP courts was considered an important element in the reform of the judicial and technological system in China. More specifically, the rationale for the establishment of specialized IP courts can be further sub-divided under the five headings outlined below.

3.1  Policy reasons

At a national level, the quality of adjudication regarding IP disputes in China is directly related to national economic development, technological innovation, and the nation’s status in terms of international relations. China began to explore effective (p. 80) ways of reforming its judicial system in the field of IP law after observing the approach taken by other countries in the region and taking into account its obligations under the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS Agreement).14 Furthermore, the introduction of a specialized IP court system was seen as an effective response to bilateral pressure to improve the protection and enforcement of intellectual property rights.15

3.2  The increasing number of IP cases

China also faced an increasing number of civil and administrative cases with respect to IP issues, putting a strain on the existing court system. According to the Supreme People’s Court White Paper on IP Protection Provided by Chinese Courts, the number of filed cases increased by 19.52% from 2013 to 2014, reaching a total number of over 130,000.16 Furthermore, due to the uneven nature of technological and economic development in different regions of China, most IP cases arose in the Beijing-Tianjin-Hebei region, the Shanghai-centred Yangtze River Delta region and the Guangzhou-centred Pearl River Delta region.17 Given that the general courts are set up according to the layout of administrative divisions, this meant that IP litigation was distributed disproportionately amongst the administrative divisions.18 As a result, it made sense to establish specialized IP courts in the regions where IP litigation most often occurred. The decision to focus on creating IP courts in regions with a propensity for IP litigation was therefore a pragmatic one in terms of the allocation of judicial resources.

However, not all commentators agreed that the setting up of specialized IP courts in China was entirely necessary. Xiuting Yuan argued that the number of IP cases (p. 81) was insufficient to justify the setting up of specialized IP courts in China because IP litigation accounts for a small proportion of the total number of cases heard by Chinese courts as a whole, amounting to approximately 1.14% of all cases heard by Chinese courts in 2013.19 Xiuting Yuan questioned whether the increase in the number of IP cases had been significant enough to justify the establishment of specialized IP courts, arguing that cases related to property, employment, banking and finance and family matters should perhaps then also be heard by specialized courts.20

However, a combination of factors has driven the establishment of specialized IP courts and these factors are not accounted for only by the numerical increase in IP cases. The distinctive characteristics of IP litigation, such as the concentration of IP disputes in particular geographical locations in China and the difficulties encountered by general courts when considering highly technical facts in IP cases, makes this a field of the law that warrants special treatment within the court system.

In reality, faced with the challenge of a rapidly increasing number of IP cases, China had two choices, first to simply increase the number of judges in the general courts or, second, to reform the existing judicial system by establishing specialized IP courts. Superficially, employing more judges in general courts would have been a much more efficient method of dealing with the challenge faced due to an increase in the number of IP cases. However, China also needed to address the policy imperative of improving the quality of adjudication in IP disputes. Taking these factors into account in their totality, arguments in favour of the establishment of IP courts in China prevailed.

3.3  The complexity and technical nature of IP disputes

The complexity of IP cases, in term of both legal and technical issues, proved to be an important factor in the creation of specialized IP courts in China. The difficulties associated with deciding on highly technical facts and identifying technical issues posed a great challenge to general courts and proponents of specialized IP courts pointed out that judges with experience of hearing cases involving a particular subject matter are more likely to reach reliable judgments than judges sitting in general courts. By way of comparison, in the United States for instance, Judge Friendly has noted that courts are often faced with a large number of patent cases involving a range of high technologies ‘which are quite beyond the ability of the (p. 82) usual judge to understand without the expenditure of an inordinate amount of educational effort by counsel and of attempted self-education by the judge, and in many instances, even with it’.21 As a consequence, the technical complexity of underlying facts is seen as a key driver leading to demands for specialized IP courts.22

3.4  Lack of judicial consistency

Another important factor that accounts for the establishment of specialized IP courts in China is that un-harmonized standards of adjudication on IP-related cases can have a negative impact on the creation new technologies. Ambiguity in legal instruments, the absence of a reliable body of established case law, and an uneven quality of judges leads to different standards being adopted in terms of the application and interpretation of IP law. Different courts may well make different judgments even when the facts and legal issues are similar in cases. Such inconsistency and lack of predictability can have an adverse impact on the reputation of the courts and on the predictability of IP law. As discussed above, the setting up of IP tribunals in China’s general jurisdiction courts was the first step in the process of specializing IP trials. However, the operation of these IP tribunals is less than straightforward. Due to the geographical concentration of IP cases around Beijing, Shanghai, and Guangzhou, judges working in IP tribunals in regions where fewer IP disputes occur are sometimes asked to hear other types of civil cases, such as family law cases, in order to ensure they have an appropriate caseload.23 As a result, judges in these regions do not have significant experience in hearing IP cases, indicating that the setting up of IP tribunals does not automatically result in improvements to the quality of adjudicative decisions. Furthermore, even though IP tribunals are now well established in China, there is no compelling evidence that this system has been particularly helpful in terms of harmonizing standards of adjudication.

(p. 83) 3.5  The problem of circuity of action

Circuity of action involving intellectual property rights is another significant reason why commentators advocate the existence of specialized IP courts in China.24 This situation arises due to the bifurcated nature of Chinese IP legal proceedings whereby there may well be a civil proceeding, for instance an infringement action, and an administrative proceeding, such as a validity challenge, running concurrently. This can lead to problems in the sense that patentees or trademark owners may have to spend longer than necessary claiming remedies for IP infringement.25 Patent disputes in China, for example, usually involve not only the courts but also the Patent Re-examination Board of the State Intellectual Property Office (SIPO) which, since 28 August 2018, has been renamed the China National Intellectual Property Administration (CNIPA) because the re-examination of patents granted by SIPO (and now by CNIPA) is considered an administrative function to be dealt with the body that originally granted the patent in the first place.26

Since November 2014, with the establishment of the Beijing IP Court, an administrative suit against decisions made by the Patent Re-Examination Board of SIPO (now CNIPA) or by the Trade Mark Review and Adjudication Board is brought before the Beijing IP Court instead of the Beijing No. 1 Intermediate Court, as was previously the case. Any private entity can bring an administrative action before the Beijing IP Court challenging SIPO’s (now CNIPA’s) decisions.27 If the Beijing IP Court rejects the claim, the complainant can appeal to the Beijing High People’s Court. If the Beijing IP Court overturns the administrative decision made by the Patent Re-Examination Board of SIPO (now CNIPA)—and it can only require the (p. 84) Board to make a new decision—it has no authority to amend or correct such a decision. If the Patent Re-Examination Board further makes a similar administrative decision, the private entity will have to bring a new administrative suit against this new decision to the Beijing IP Court in order to quash it again. This will be the case even though the new administrative decision will be the same as the previous one brought before the Beijing IP Court and the issues in suit will be essentially the same as in the previous trial.28 As a result, the Patent Re-Examination Board of SIPO (now CNIPA) can still make a similar administrative decision on the same issue, requiring the private entity to later bring a new administrative action against this new decision. Consequently, a circuity of action occurs, leading to inefficiencies in the allocation of administrative and judicial resources. In this regard, improving the efficiency of IP trials with respect to civil or administrative disputes is considered by the Beijing High People’s Court as a measure necessary to reduce the negative effects brought by the circuity of actions.29

Although, one of the main objectives of the establishment of the IP court system was to solve this problem and improve the efficiency of IP proceedings, it has not yet been resolved.30 The fundamental reason for this problem is that, due to the bifurcated system, Chinese courts are not entitled to declare a patent or trademark invalid, either in a civil case or an administrative case. Instead, the validity of intellectual property rights is considered a matter to be dealt with by SIPO (now CNIPA), an administrative body. In order to avoid circuity of actions involving intellectual property rights entirely, the specialized IP courts would need jurisdiction (p. 85) to decide whether a patent or trademark was valid.31 At the present time, China’s specialized IP courts do not have such powers over validity matters.

4.  Main Features of the Specialized IP Court System

One of the main factors driving the establishment of specialized IP courts in China has been a desire to unify standards of adjudication with respect to IP matters. The three specialized IP courts in Beijing, Shanghai, and Guangzhou must now interface with the general courts and other judicial organizations to achieve adjudicative consistence. Accordingly, the Supreme People’s Court has promulgated two official documents to regulate such matters.32

4.1  Scope of jurisdiction

The specialized IP courts in Beijing, Shanghai, and Guangzhou have first instance jurisdiction over civil and administrative cases related to patents, new plant varieties, layout design of integrated circuits, know-how, and computer software.33 In addition, administrative cases regarding copyright, trademark, and unfair competition, in terms of first instance jurisdiction to hear actions against the administrative decisions of departments of the State Council or local governments (at or above county level) are transferred to the specialized IP courts.34

Unlike the Shanghai and Guangzhou specialized IP courts, the Beijing IP court also has an exclusive first instance jurisdiction to hear cases against administrative actions made by a department under the State Council involving authorization and affirmation of intellectual property rights, and compulsory licences (including the royalties associated with the granting of compulsory licences) relating to patents, new plant varieties, and layout designs of integrated circuits.35 The specialized IP courts are also responsible for hearing appeals against the Basic People’s Courts’ civil and administrative judgments or awards relating to (p. 86) copyright, trademarks, technology contracts, unfair competition, and other intellectual property rights.36

In terms of jurisdiction rules with respect to the specialized IP courts in China, when compared to the general courts’ jurisdiction with regard to IP litigation, the jurisdiction over IP-related criminal cases still remains with general courts, no matter whether these cases are dealt with at first or second instance. In addition, except in the case of the Beijing IP court which has jurisdiction to hear cases against administrative actions made by a department under the State Council concerning affirmation and other specified IP issues, the jurisdiction to deal with civil and administrative cases is not exclusive. This may result in a conflict of jurisdiction between a specialized IP court and a general court. Given that a defendant’s place of residence, for example if he or she is located in Shanghai Municipality, may be different from the place where patent infringement has been committed, for example in Nanjing, both the specialized IP court in Shanghai and a Basic People’s Court in Nanjing will have jurisdiction to hear this case in terms of civil law.37 Due to the absence of clear rules on this matter, it is presumed that the claimant can choose which court he would like to bring a case before. Nevertheless, it has been suggested by Xudong Zhang that preference will be given to the specialized IP court when there is conflict of jurisdiction, giving priority to the availability of a specialized adjudication.38

In the United States, concern over the possibility of forum shopping has prompted commentators to support the establishment of a court with appellate jurisdiction over patent cases.39 Dreyfuss, for example, has pointed out that forum shopping in IP disputes is caused by the huge difference on the ratio of decisions holding a patent valid and infringed to those holding a patent invalid among different District Court circuits, with the result that uncertainty as to which court is responsible may well have an adverse impact in terms of establishing legal certainty.40 As with (p. 87) claimants in the United States, a rational approach for Chinese plaintiffs may well be to choose an IP-friendly court in order to increase the odds of the proprietor prevailing in the dispute.

4.2  The relationship between the specialized IP courts and general courts

As with general jurisdiction courts in China, specialized IP courts are supervised by the Supreme People’s Court and by the High Court in the location of the IP court.41 Given that appeals against a decision or award made by a specialized IP court at first instance will be heard by the intellectual property tribunal of the High Court where the IP court is situated,42 it can be seen that there is no unified IP appeal court in China.43

5.  Characteristics of the Specialized IP Courts in China

Based on lessons drawn from foreign IP court systems, notably Taiwan, and its own practical experience in establishing IP tribunals and implementing the ‘three-in-one’ adjudication model, China has set up an innovative specialized IP court system with a number of noteworthy characteristics, each of which will be discussed under the headings below.

5.1  The use of technical investigation officers

In order to address the challenge of how best to assess technical facts, the IP specialized courts employ technical investigation officers. China’s specialized IP courts are not unique in using technical investigation officers to hear complex disputes, particularly in the field of patent litigation. Japan, South Korea, and Taiwan have adopted a similar approach to hearing IP disputes. The Interim Provisions on Several Issues Relating to Technical Investigation Officers of IP Courts to Participate in Intellectual Property Court Proceedings,44 issued by the Supreme People’s Court on 2014, sets out the responsibilities of technical investigation officers and determines the procedures for their participation in IP trials. Unlike expert witnesses and technical judges, technical investigation officers act as judicial assistants and give their opinions regarding technical issues, with the limitation that they do not have the (p. 88) power to make judicial decisions.45 Technical investigation officers can attend collegiate panel deliberations and participate in many stages of civil and administrative trials, including investigations, evidence collection, inspection, and preservation.46 With the judge’s permission, they can question the litigants, agents ad litem, witnesses, appraisers, and inspectors with regard to case-related technical issues.47

However, the need to appoint technical investigation officers in specialized IP courts is questioned for two reasons. First, although establishing technical facts is generally the most difficult matter in IP trials, in other jurisdictions the court can find technical facts by relying on the opinions of expert witnesses and professional consultants without employing technical investigation officers.48 Secondly, it can be argued that the system of technical investigation officers may pose a threat to the independence of the judiciary. When a judge hears a case with complex technical matters, that judge may become over-reliant on the technical investigation officer’s opinion, leading to a risk that the technical investigation officers in fact act as technical judges.49

Furthermore, technical investigation officers differ from other trial participants who serve to provide technical opinions (such as expert witnesses, technical advisors, and judicial authenticators) in that technical investigation officers are usually former employees of the courts. To put it in another way, they are the judges’ colleagues whereas other trial participants are third-party participants who provide professional opinions on behalf of one of the parties or at request of the court. Their role also differs from other trial participants in that technical investigation officers are entitled to attend the collegiate panel, participate in its deliberations, or participate in other court investigative activities, evidence collection, inspection, and preservation.

The Chinese specialized IP courts themselves have indicated that technical investigation officers have had a positive impact on the courts’ deliberations. In the Beijing IP court, for example, there are currently twenty-five technical investigation officers and they have participated in finding technical facts in 250 cases, providing 110 technical examination opinions.50 The Beijing IP court has indicated that their (p. 89) work has been particularly beneficial in terms of improving the quality and efficiency of adjudication on technology-related cases and as a result the court has increased the completion rate of IP cases involving technology by 87%.51 Since cases involving complex technologies have now been transferred from general courts within the Beijing Municipality, the Shanghai Municipality, and the Guangdong Province to the three specialized IP courts, judges in the IP courts need to deal with more complex technical matters than those in the general courts on a regular basis. In the Shanghai IP court, for instance, nearly 90% of filed cases involve disputes on technical issues.52 The availability of reliable technical advice for the IP courts has therefore arguably become more important.

Conversely, the risks associated with employing technical investigation officers also deserve further attention. One risk is that it is entirely possible they may serve as technical judges alongside their role as technical investigation officers. As a result, it could be argued that using a technical investigation officer offers a lower degree of independence than using an expert witness or technical advisor acting on behalf of one of the parties. As technical investigation officers are court employees, a judge may well trust their professional opinion to a greater extent than advice provided by an expert witness or an independent technical advisor since a technical investigation officer is, in effect, his colleague.53 In addition, it is difficult for a judge without professional knowledge to eliminate non-neutral opinions provided by technical investigation officers. Consequently, it is important to consider how China can reduce the risks associated with employing technical investigation officers if it is to review and build on the specialized IP courts system in the future.54

(p. 90) 5.2  Establishing a system of guiding IP cases

On 15 November 2010 the Supreme People’s Court issued The Provisions of the Supreme People’s Court Concerning Work on Case Guidance,55 indicating that China would start to build a Guiding Cases system to serve as a significant element in China’s judicial reform project.56 In the absence of legal precedence in the Chinese system, the identification of guiding IP cases aims to assist with solving the problem of adjudicative inconsistency across China’s lower courts. In order to clarify the use of guiding IP cases, on 27 April 2015 the Supreme People’s Court announced that lower courts ‘should quote the Guiding Cases as a reason for their adjudication, but not cite it as the basis of their adjudication’.57

In support of the Guiding Cases project, on 24 April 2015, the Supreme People’s Court established a research base of guiding intellectual property cases in the Beijing IP Court. Underpinned by the research and adjudication resources of the Beijing IP Court, the system requires that the judge, collegiate panel, and adjudication committee member of the Beijing IP Court will consider guiding cases in the process of pre-trial preparation, hearing, and when writing the judgment.58 It also requires the judge to identify related precedents, cite, and explain the relevance of guiding IP cases in their written judgments.59 In addition, judges in the Beijing IP court are now required to state in detail, in the written judgment, how and why the collegiate panel reached its decision. This approach differs from the traditional format of written judgments in China.60

The Beijing IP court is also building a database, recording guiding cases, as a means of reference and resource for judges, lawyers, and scholars in the future.61 In 2015, (p. 91) the Beijing IP Court made over sixty judgments based on stare decisis, namely the legal principle of determining points in litigation according to precedent.62 As Chi Su, the President of the Beijing IP court, has made clear the Guiding Cases system in effect changes the relationship between the judge and the lawyer.63 For Chi Su, when judges encourage lawyers to cite related precedents, this makes the statements of lawyers more important in trials.64

However, it should be noted that the usage rate of guiding IP cases remains low. From 6 November 2014 to 20 August 2015, the Beijing IP Court heard 2,348 cases.65 Yet only about 60 of these cases were decided according to precedents as part of the Guiding Cases project. This situation may be explained partly by the fact that only ten IP-related cases have been issued by the Supreme People’s Court as part of the Guiding Cases project.66 It seems that a number of challenges remain in the operation of guiding IP cases system. Firstly, the Office for the Work on Case Guidance of the Supreme People’s Court is in charge of review and selection and determines which jurisprudence qualifies as a Guiding Case.67 When compared to the judges working in the specialized IP courts, judges in the Supreme Court have far less experience of dealing with IP disputes, even though they are the ones tasked with selecting the guiding cases. Secondly, as the judges working in the Supreme Court are former judges of the general courts, they do not have the benefit of specialized IP training, nor do they necessarily have any particular experience of identifying appropriate precedents or making a comparison between a new case and the similar cases previously. Furthermore, the current format of written judgments increases the degree of difficulty in identifying similar prior cases.68 It is not the final decision that matters but the reasoning written in the judgment of a (p. 92) precedent. However, Chinese judges do not generally reason their decisions in detail nor cite similar precedents in their written judgments. Consequently, it appears that establishing a meaningful Guiding Cases system to achieve greater adjudicative consistency in IP litigation will remain a long-term project for China.

6.  Shortcomings in the Specialized IP Court System

Although the specialized IP court system in China is designed to improve the quality of adjudication, efficiency in hearing IP disputes, and to achieve greater adjudicative consistency, a number of shortcomings remain. These are: first, the absence of an IP appeal court; second, the absence of jurisdiction over criminal IP-related cases; and, third, an adequate mechanism for the recruitment and retention of high-calibre judges. Each of these shortcomings will be considered in turn, below.

6.1  Absence of IP appellate courts

In 2008, when China’s intellectual property strategy was announced, it included a plan to explore the establishment of specialized IP appeal courts. Since that time, as we have seen, only three IP courts at intermediate level have been set up. Judges of different IP courts hear civil and administrative cases specified under Article 6 of Provisions on Jurisdiction and may adopt different standards of adjudication to deal with IP disputes since there is no inter-court coordination on hearings. Nor are there any activities with respect to sharing information about prior cases amongst China’s specialized IP courts. Furthermore, the Beijing High People’s Court, the Shanghai High People’s Court, and Guangdong High People’s Court are responsible for hearing appeals against judgments made by the three specialized IP courts respectively. The only mechanism for judges to apply uniform criteria in dealing with IP disputes is the Guiding Cases system. However, as outlined above, China’s Guiding Cases system is faced with the challenge of low numbers of IP cases selected by the Supreme People’s Court and the lack of detailed judicial reasoning in the cases published. Consequently, the standard of adjudication on IP cases remains fragmented.69 This indicates that the existing system of IP courts in China is far from being an effective mechanism to help achieve adjudicative consistency.

(p. 93) In other jurisdictions, the practice of setting up specialized IP courts generally includes a specialized IP court of appeal. In the United States, for instance, the Court of Appeals for the Federal Circuit hears all appeals in patent cases. In the EU, the embryonic Unified Patent Court (UPC) comprises a Court of First Instance (with local, regional, and central divisions) and a Court of Appeal. In China, establishing a system of specialized IP courts that includes a court of appeal has gained support from Chinese academic circles, although at present there is an absence of consensus on the issues such as the number of IP appeal courts required and how they should operate.70 It should be noted also that, apart from the imperative of achieving adjudicative consistency, establishing an IP appeal court with judicial power to determine the validity of patents or trademarks could also address the issue of circuity of action, as discussed above.71

6.2  Absence of jurisdiction to hear IP-related criminal cases

The Intellectual Property Court of Taiwan was the first specialist IP court anywhere in the world with jurisdiction to handle civil, administrative, and criminal cases.72 It is the court of first instance to hear civil and administrative IP-related cases and is responsible for dealing with civil and criminal appeals concerning IP disputes.73 In Mainland China, the situation differs when one compares the ‘three-in-one’ adjudication model adopted by more than 200 general People’s Courts, on the one (p. 94) hand, and China’s specialized IP courts on the other. The latter have no jurisdiction to hear IP-related criminal cases. This rule seems to go against the fundamental objective of unifying adjudicative standards with respect to IP issues in a country that has a twenty-year history of implementing the ‘three-in-one’ model. Due to the fact that civil, administrative, and criminal cases concerning alleged IP infringing conduct will be heard by different courts, the judge in a general court and that in an IP court may in effect apply different standards with regard to identifying an infringement.74

This might occur, for instance, because according to Chinese criminal law some acts of IP infringement are criminalized in view of their seriousness or because they constitute behaviour likely to cause specified effects, such as enabling the infringer to gain a large sum of illicit income or because the infringer has committed multiple infringements.75 It should be noted that, as with IP-related civil and administrative cases, the first and also the key step for the judge hearing such criminal cases is to determine whether the intellectual property right has in fact been infringed. Given this, it seems that there is no convincing reason to justify the practice of requiring a judge in a general court, hearing a criminal law matter, and a judge in a specialized IP court to identify infringement separately. In particular, this could be problematic when judges in general courts hearing a criminal law matter have insufficient experience of adjudication in the field of IP issues. In practice, since the judges with most experience in hearing criminal law matters related to IP have moved from the general courts to the three specialized IP courts, this increases the risk that the quality of adjudication on IP-related criminal cases heard in general courts may be lower than prior to late 2014. This problem has been exacerbated by the withdrawal of the intellectual property tribunals in the Beijing, Shanghai, and Guangzhou Intermediate Courts, which have, of course, since late 2014 been replaced by the three specialized IP courts.76 However, the general courts in Beijing, Shanghai, and Guangzhou still have jurisdiction to hear IP-related criminal cases. Adjudication on such criminal cases related to IP thus failed to benefit from a concentration of judicial resources when this expertise was moved to the three specialized IP courts.

(p. 95) Although the proposal to add criminal jurisdiction to the specialized IP courts is gaining support in Chinese academic circles, the consequences of this in terms of the heavy workloads that would consequently be experienced by judges in IP courts warrant further attention. Taking into account the large number of civil and administrative cases, there are two possible solutions. The first solution would be that only appeals, not first instance trials, on criminal cases would be dealt with by specialized IP courts. In 2014, 10,803 IP-related criminal cases were heard at first instance, while only 521 appeals concerning IP-related criminal cases were heard by Chinese courts.77 It therefore appears a possible solution in terms of striking a good balance between adopting the ‘three-in-one’ model in IP courts and the practicalities of increased workload that would be involved. In addition, taking the pre-trial detention and investigation into account, it is more appropriate for a basic court than a specialized IP court with cross-regional jurisdiction to handle criminal cases at first instance.78 The second possible solution would be the so-called ‘2+1’ model currently being explored by the Shanghai specialized IP court. By adopting this model, IP-related criminal cases would be heard by a collegial panel formed by the Shanghai IP Court and the Shanghai No.3 Intermediate Court that has jurisdiction to deal with criminal IP cases.79

6.3  Recruitment and retention of high calibre judges

Given that jurisdiction of the general basic and intermediate People’s Courts in Beijing Municipality, Shanghai Municipality, and Guangdong Province to hear cases as specified by Articles 1, 5, and 6 of Provisions on Jurisdiction has transferred to the three specialized IP courts, judges in these specialized IP courts are already suffering from a heavy workload. In the Guangzhou IP court, for instance, between 21 December 2014 and 31 December 2015, thirteen judges heard a total of 3,393 cases, amounting to an average of 261 cases per judge in one year.80 In the Beijing IP Court, the situation is even worse, not least because it has exclusive first instance jurisdiction to hear administrative cases against decisions made by a department under the State Council involving authorization and affirmation of intellectual property rights and compulsory licences.81 The number of IP cases is still increasing (p. 96) rapidly and judges in the three specialized IP courts face an even heavier workload in the future. Consequently, there is a risk that the quality of adjudication may suffer adverse effects.

In terms of recruitment and retention of high calibre judges, remuneration is also an issue. Judges in the specialized IP courts have considerable experience in hearing IP cases. Judges in the Beijing IP Court, for instance, have on average ten years’ experience as IP judges.82 Yet judicial salaries are relatively low and arguably do not reflect accurately experience, ability, or workloads. Ying Jiang, the Chief Judge of No.1 Tribunal in the Beijing IP Court, has been quoted as stating that the salary of a judge in specialized IP courts remains the same as that received by a judge in the general court.83

Compared to the more potentially complex tasks of reforming the role of technical investigation officers, building a properly functioning Guiding Cases system and establishing an effective IP appeal court, ensuring effective recruitment and retention of judges in the specialized IP courts through appropriate remuneration packages seems a relatively simple task to achieve. Nevertheless, it is an issue that appears to have been overlooked by decision-makers in China. As judges of IP courts are the people who implement concrete measures to promote judicial reform in adjudication with respect to IP cases, their performance will ultimately have a significant impact on the operation of IP court system and the effect of judicial reforms in China.

7.  Conclusion

In recent years, China has taken significant steps to reform its legal system for intellectual property protection and enforcement. That task is not yet complete and remains a work in progress. China has already set up intellectual property tribunals to implement the ‘three-in-one’ adjudication model in general courts and has established specialized IP courts in the three most heavily IP-litigated locations. However, as this chapter has illustrated, based on the Chinese courts’ practical experience of hearing IP disputes and the lessons that can be drawn from the legal reforms undertaken thus far, further consideration may well be needed on a range of issues including, amongst others, the role of technical investigation officers, the (p. 97) operation of the Guiding Cases system, the absence of IP appeal courts, jurisdiction to deal with IP-related criminal cases, and the recruitment and retention of judges. Further reforms and developments are no doubt necessary and likely to occur in the near future.

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Footnotes:

Professor of Intellectual Property Law, Centre for Commercial Law Studies, Queen Mary University of London. With thanks to Jingwen Guo for research assistance and translation.

1  The Guangzhou IP court has jurisdiction over the entire Guangdong Province, while the Beijing and Shanghai IP courts have jurisdiction over smaller geographical areas because they are courts that cover the respective Municipalities.

2  The Supreme People’s Court of the People’s Republic of China (中华人民共和国最高人民法院‎), Intellectual Property Protection by Chinese Courts in 2014 (中国法院知识产权司法保护‎2014) (White Paper, 2015) ch 2, available at http://www.wipo.int/wipolex/en/details.jsp?id=15689.

3  The Central Committee of the Communist Party of China, Decision of the CCCPC on Some Major Issues Concerning Comprehensively Deepening the Reform (中共中央关于全面深化改革若干重大问题的决定) (White Paper, 2013) ch 3, para 13, available at http://www.china.org.cn/chinese/2014-01/17/content_31226494.htm.

4  Xiuting Yuan (袁秀挺‎), ‘Chinese IP Courts: the Vision and the Road (中国知识产权法院的愿景及其实现路径‎)’ (2015) 1 Journal of Science, Technology and Law (科技与法律‎) 23, 25.

5  The Supreme People’s Court of the People’s Republic of China (中华人民共和国最高人民法院‎), Work Report of the Supreme Peoples’ Court on Intellectual Property Trials—Released on the Eleventh Session of the Standing Committee of the Thirtieth National People’s Congress (2012) (最高人民法院关于知识产权审判工作情况的报告‎—2012 ‎12‎25日在第十一届全国人民代表大会常务委员会第三十次会议上) (White Paper, 2013) ch 1, available at http://www.npc.gov.cn/npc/xinwen/2013-01/06/content_1750233.htm.

6  Xiaoqing Feng (冯晓青‎) and Li Wang (王丽‎), ‘From Specialised Tribunals to Specialised Court: New Development of China’s IP Judicature (从专门法庭到专门法院‎:我国知识产权司法的最新进展透析‎)’ (2015) 35 (3) Academic Forum of Nandu (Journal of the Humanities and Social Sciences) [南都学坛‎(人文社会科学学报‎)] 59, 61–2.

7  In 1995 one civil case, one administrative case, and one criminal case which all related to the infringement of a trademark called ‘Fei Ying’, owned by Shanghai Jilie Limited Company, were brought to the Shanghai Pudong New Area People’s Court. The three cases were each heard separately by the intellectual property tribunal, the administrative tribunal, and the criminal tribunal respectively. However, the court found that the crux of the three cases was that they all dealt with the infringement of intellectual property rights and that, if the IP-related civil, administrative, and criminal cases were integrated and dealt with by the intellectual property tribunal, it would improve the quality and efficiency of adjudication as the intellectual property tribunals are experienced in hearing cases related to IP issues. As a result, the Shanghai Pudong New Area People’s Court adopted a ‘three-in-one’ adjudication model. See Xueyou Sheng (盛学友‎), ‘What does “There-in-one” Bring to us-Investigating Shanghai Intellectual Property New Mechanism (“三合一‎”给我们带来什么‎-探访上海知识产权‎“三审合一‎”新机制‎)’ (2009) 24 Law and Life (法律与生活‎) 45.

8  The Supreme People’s Court of the People’s Republic of China (中华人民共和国最高人民法院‎), Intellectual Property Protection by Chinese Courts in 2014 (中国法院知识产权司法保护‎2014) (White Paper, 2015) ch 2, available at http://www.chinacourt.org/article/detail/2014/04/id/1283299.shtml.

9  Yuan (n 4) 26.

10  The State Council of the People’s Republic of China (中华人民共和国国务院‎), Outlines of the State Intellectual Property Strategy (国家知识产权战略纲要) (White Paper, 2008) para 45.

11  The Central Committee of the Communist Party of China (n 3).

12  Feng and Wang (n 6), 60.

13  Provisions of the Supreme People’s Court on the Jurisdiction of the Intellectual Property Courts of Beijing, Shanghai and Guangzhou over Cases (最高人民法院关于北京‎、上海‎、广州知识产权法院案件管辖的规定关于北京‎、上海‎、广州知识产权法院案件管辖的规定‎), promulgated by the Adjudication Committee of the Supreme People’s Court, 27 October 2014, issued 3 November 2014 (hereinafter Provisions on Jurisdiction), available at http://www.chinacourt.org/law/detail/2014/10/id/147980.shtml.

14  Thailand, for instance, set up the Central Intellectual Property and International Trade Court to deal with IP and trade-related matters. See Yuan (n 4) 30.

15  The United States had removed Taiwan from the Special 301 Watch List in 2009 after it set up an IP court system. The IP court system in Taiwan shares many common features with the specialized IP courts in Mainland China, including the ‘three-in-one’ adjudication model and the role of technical investigation officers. See Yuan (n 4) 30; also see Jiming Yi (易继明‎), ‘Why to Establish IP Courts (为什么要设立知识产权法院‎)’ (2014) 4 Journal of Science, Technology and Law (科技与法律‎) 573, 577.

16  The Supreme People’s Court (n 2).

17  In 2012, the top 1–7 in the ranking list of China’s courts based on the number of filed civil first instance cases are: Guangdong Province (23,672), Zhejiang Province (16,171), Beijing (8,492), Jiangsu Province (8,526), Shandong Province (5,309), Hubei Province (4,758), and Shanghai (3,251). Jiangsu Province, Zhejiang Province, and Shanghai belong to Yangtze River Delta region. This data demonstrates that IP-related civil litigation is concentrated in the Beijing-Tianjin-Hebei region, the Yangtze River Delta region and the Pearl River Delta region. See Editing Committee of Yearbook for Judicial Protection of Intellectual Property in China (中国知识产权司法保护年鉴编辑委员会‎), Yearbook for Judicial Protection of Intellectual Property in China (中国知识产权司法保护年鉴) (2012) (Law Press China, 2013) 66–154.

18  Yi (n 15) 574.

19  Yuan (n 4) 28: ‘With regard to the number of IP cases, in recent years it is increasing rapidly (on average, by 30% per year); however, it is still small compared to the number of other cases. According to the 2013 Statistical Bulletin of China’s Courts, 8,876,733 first instance cases were heard and the number of IP cases (including administrative, civil and criminal cases) was 100,800 which occupied just 1.14%.’

20  Ibid.

21  Henry Friendly, Federal Jurisdiction: A General View (CUP, 1973) 156–7. This statement cited by Richard L. Revesz, ‘Specialised Courts and the Administrative Law-making System’ (1990) 138 (4) U Pa L Rev 1111, 1117–18.

22  Feng and Wang (n 6) 61. On the other hand, Xiuting Yuan, a former IP judge, has argued from the opposite point of view and said that the difficulty of finding technical facts can be solved by using expert witness and other professional advisors without employing more staff in courts and even setting up specialized IP courts. He also indicated that this difficulty seems to be exaggerated. According to Xiuting Yuan, ‘I worked as a IP judge for several years. Based on my experience and my observations, technical issues are generally not concerned with trade mark cases while they are involved in a few copyright cases. In a considerable amount of patent cases, there is no dispute between litigants with regard to technical issues. Two parties in a litigation always have a consensus on the facts of infringement and merely have different opinions on the issue of liability… this phenomenon may be related to the quality of patents in China. The proportion of IP cases involving disputes on technical issues is not more than 20%.’ See Yuan (n 4) 29.

23  Ibid.

24  See Guangman Li (李光曼‎) and Xing Zhao (赵兴‎), ‘Concerning Reflections and Suggestions of “Three-in-one” IP Adjudication-Based on the Establishment of IP Courts (关于知识产权审判‎“三合一‎”的反思与建言‎-以知识产权法院设立为背景‎)’ (2015) 1 Journal of Jiangxi Police Institution (江西警察学院学报‎) 118, 120; see also Minglin Li (黎明琳‎) and Yuzhu Wang (王玉柱‎), ‘Analysis on Judicial Practice of IP Courts and IP Protection in Shanghai Municipality (知识产权法院与上海知识产权保护的司法实践分析‎)’ (2016) 2 Legal System and Society (法制与社会‎) 136, 136.

25  Yinliang Liu (刘银良‎), ‘Demonstrations on Establishment of IP Courts in China (我国知识产权法院设置问题论证‎)’ (2015) 3 Intellectual Property (知识产权‎) 3, 4.

26  In addition to patents, utility models, and designs, CNIPA now also handles trademarks (formerly administered by the State Administration of Industry and Commerce, SAIC) and geographical indications (formerly handled by the Administration of Quality Supervision, Inspection and Quarantine, AQSIQ).

27  After the Beijing IP Court was established, an administrative suit against the decisions on affirmation of intellectual property rights made by Patent Re-Examination Board of SIPO or Trade Mark Review and Adjudication Board shall be brought to the Beijing IP Court instead of the Beijing No. 1 Intermediate Court. Since 28 August 2018 CNIPA, the successor organization to SIPO, has taken over responsiblity for the registration and administrative adjudication of trademarks. Although the Patent Re-Examination Board and the Trade Mark Review and Adjudication Board are still separated, both of them now come under the CNIPA organizational structure. Prior to this, the Trade Mark Review and Adjudication Board was a part of the State Administration for Industry and Commerce of the People’s Republic of China.

28  According to Article 71 of Administrative Procedure Law of the People’s Republic of China 2015, when courts make a judgment to order an administrative body to make new administrative action, it cannot make a similar action based on the same facts and reasons. However, in practice, it is quite common for an administrative body to make similar decisions over and over, which leads to circuity of action. See Bixin Jiang (江必新‎) and Changmao Shao (邵长茂‎), Interpretation and Application of Amended Provisions on New Administrative Procedure Law (新行政诉讼法修改条文理解与适用) (China Legal Publishing House[中国法制出版社‎] 2015) 283.

29  See the Beijing High People’s Court (北京市高级人民法院‎), Work Report of the Beijing High People’s Court on the Judicial Protection of Intellectual Property Rights-released on the Twenty-first Session of the Standing Committee of the Fourteenth Beijing Municipal National People’s Congress on Sep.23, 2015 (北京市高级人民法院关于知识产权司法保护情况的报告‎-2015‎9‎23日在北京市第十四届人民代表大会常务委员会第二十一次会议上‎) (White Paper, 2015) ch 2, available at http://www.bjcourt.gov.cn/article/newsDetail.htm;jsessionid=1F7E05B038440BB7AFFCF677770BF8E7?NId=55001088&channel=100001012.

30  Guangliang Zhang (张广良‎) ‘On the Thinking of Localisation of Designing Intellectual Property Court System (知识产权法院制度设计的本土化思维‎)’ (2014) 6 The Jurist (法学家‎) 55, 60; Jiming Yi (易继明‎), ‘What Kind of IP Courts should be Established (设立什么样的知识产权法院‎)’ (2014) 4 Journal of Science, Technology and Law (科技与法律‎) 747,751; also see He Guo (郭禾‎), ‘Reform of the Patent Invalidation System and its Cooperation with IP Court Construction-Discussing from the Fourth Amendment of Patent Law (专利权无效宣告制度的改造与知识产权法院建设的协调‎-从专利法第四次修订谈起‎)’ (2016) 3 Intellectual Property (知识产权‎) 14, 15–19; also see Liu (n 25) 7–11.

31  Some commentators propose to amend the Chinese Administrative Procedure Law in order to solve this problem. See Liu (n 27) 8. Yongshun Cheng (程永顺‎) participating at the seminar Commercial Law in China: Intellectual Property in Business organised by the Centre for Commercial Law Studies, Queen Mary University of London, on 15 December 2016 stated that an administrative procedure is an inadequate means of resolving validity matters relating to intellectual property rights.

32  Two official documents are Provisions on Jurisdiction and Notice of the Supreme People’s Court on Issues concerning the Jurisdiction of Intellectual Property Courts over Cases (最高人民法院关于知识产权法院案件管辖等有关问题的通知‎) (hereinafter Notice on Jurisdiction).

33  Provisions of Jurisdiction, art 1.

34  Ibid.

35  Ibid., art 6.

36  Ibid.

37  According to Article 5 of Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law Related to Hearing Patent Disputes (最高人民法院关于审理专利纠纷案件适用法律问题的若干规定‎), patent infringement cases shall be heard by the court where infringement occurred or where the defendant’s settled place of abode is located.

38  Xudong Zhang (张旭东‎), ‘Inspection on China’s Jurisdiction of Intellectual Property Civil Cases-from the Angle of Patent Cases (中国知识产权法院民事案件管辖规定检视‎-以专利纠纷案件为视角‎)’ (2015) 9 Social Sciences of Beijing (北京社会科学‎) 81, 84.

39  Revesz (n 23) 1116.

40  Rochelle C Dreyfuss, ‘The Federal Circuit: A Case Study in Specialized Courts’ (1989) 64 NYUL Rev 1, 7: ‘In the period 1945–1957, a patent was twice as likely to be held valid and infringed in the Fifth Circuit than in the Seventh Circuit, and almost four times more likely to be enforced in the Seventh Circuit than in the Second Circuit … Without knowing where a patent would be litigated, it became impossible to adequately counsel technology developers or users. In such a legal environment, the promise of a patent could hardly be considered sufficient incentive to invest in research and development.’ This statement was cited by Revesz (n 23) 1116–17.

41  Article 5 of Decision of the Standing Committee of the National People’s Congress on Establishing Intellectual Property Right Courts in Beijing, Shanghai and Guangzhou (全国人大常委会关于在北京‎、上海‎、广州设立知识产权法院的决定).

42  Provisions on Jurisdiction, art 7.

43  The advantages of specialized IP appeals court are discussed in Section 6.

44  Interim Provisions on Several Issues Relating to Technical Investigation Officers of IP Courts to Participate in Intellectual Property Court Proceedings (最高人民法院关于知识产权法院技术调查官参与诉讼活动若干问题的暂行规定‎) (hereinafter Interim Provisions).

45  Interim Provisions, arts 1 and 8. However, the related regulations do not state whether their opinions shall be available to litigants.

46  Interim Provisions, art 6.

47  Interim Provisions, art 7.

48  See Yuan (n 4) 29. Also see Zhang G (n 30) 63: ‘Technical appraisal is available and the people with technical knowledge are allowed to participate the trials. In addition, the system of expert commission is established in China. Thus, there is no need to introduce technical investigation officers.’

49  Zhang G (n 30) 63.

50  Closure rate = the sum of cases closed/the sum of cases filed. See Qing Li (李青‎), ‘Judges’ Brain Trust Making Adjudication More Professional-System of Technical Investigation Officer Operating for One Year in the Beijing IP Court (法官‎”智囊‎”让裁判更专业‎-北京知产法院技术调查官制度运行一年‎)’ People’s Court Daily (人民法院报) (Beijing, October 2016) 4.

51  Ibid.

52  Yingying Chen (陈颖颖‎) and Yejie Wang (王烨捷‎), ‘The Shanghai IP Court Employed 11 Technical Investigation Officers for the First Time (上海知识产权法院首聘‎11位技术调查官‎)’ (China Daily [中国日报‎], 23 March, 2016), available at <http://www.chinadaily.com.cn/micro-reading/dzh/2016-03-23/content_14622415.html> accessed 9 January 2017.

53  The most important reason why many lawyers in China are former judges is that a former judge has already built a professional network—he has strong connection with other judges in courts. It is quite common for a client to ask a lawyer if he knows anyone working in the court that will hear the client’s case. If there is a private relationship between the judge and the lawyer hired by one of the parties, the judge may make a decision in a shorter time. Furthermore, due to the absence of binding case law, it is feasible for the judge to make a decision for the sake of this party’s interest by exercising his discretion.

54  Some commentators have suggested that it is more appropriate for the specialized IP courts to employ technical judges rather than technical investigation officers. See, for example, Xudong Zhang (above n 38) 85: ‘It is supposed that China should follow Germany to combine legal judges and technical judges in order to improve the predictability and consistency of adjudication effectively and truly achieve the goals of specialisation on courts, adjudication and judges.’

55  (最高人民法院关于案例指导工作的规定‎), promulgated by the Adjudication Committee of the Supreme People’s Court, 15 November 2010, issued 26 November 2010, translated in Stanford Law Sch., China Guiding Cases Project, available at https://cgc.law.stanford.edu/wp-content/uploads/sites/2/2015/08/guiding-cases-rules-20101126-english.pdf.

56  For detail introduction and analysis on China’s guiding cases system, see Mark Jia, ‘Chinese Common law? Guiding Cases and Judicial Reform’ (2016) 129 (8) HLR 2213.

57  Article 10 of Detailed Rules for the Implementation of the ‘Provisions of the Supreme People’s Court Concerning Work on Case Guidance’ (最高人民法院关于案例指导工作的规定实施细则‎), promulgated by the Adjudication Committee of the Supreme People’s Court, 27 April 2015, issued 13 May 2015, translated in Stanford Law School, China Guiding Cases Project (2015), available at <https://cgc.law.stanford.edu/wp-content/uploads/sites/2/2015/10/guiding-cases-rules-20150513-english.pdf>, (hereinafter Rules on Case Guidance). In terms of the binding force of guiding cases (a source of law or a source of reference), Mark Jia stated, ‘the 2015 Rules did much to legitimate the use and citation of guiding cases in lower court decisions, while still supporting the view that guiding cases were binding de facto but not de jure’. See Jia (n 56) 2224.

58  Research Team of the Beijing Intellectual Property Court (北京知识产权法院课题组‎), ‘Thinking and Exploring about the Reform of Operation of Adjudicative Power—-the Beijing Intellectual Property Court as a Sample Analysed (关于审判权运行机制改革的思考与探索‎-以北京知识产权法院为分析样本‎)’ (2015) 10 Journal of Law Application (法律适用‎) 6, 9.

59  Ibid.

60  Ibid.

61  Ibid.

62  Lijun Mao (毛立军‎), ‘IP Courts: Providing Protection with the Comprehensive Development of Innovation (知识产权法院‎:为全面创新发展提供司法保护‎)’ The People’s Political Consultative Daily (中国政协报) (Beijing, 26 April 2016) 12.

63  Ibid.

64  Ibid.

65  This statistic was given by Chi Su, the President of the Beijing IP Court, at a press conference organized by the Supreme People’s Court. See the Supreme People’s Court (最高人民法院‎), ‘ Chi Su, the President of the Beijing IP Court Published a Work Report on the Operation of the Beijing IP Court (北京知识产权法院院长宿迟发布北京知识产权法院工作运行情况‎)’ (Website of the Supreme People’s Court [最高人民法院网‎], 9 September 2015), available at http://www.court.gov.cn/zixun-xiangqing-15367.html>accessed 15 December 2016.

66  The Supreme People’s Court has published ten IP-related guiding cases. Nos. 20 and 55 Guiding Cases involve patent infringement; Nos. 29, 30, 46, 45, and 47 involve unfair competition; Nos. 30, 46, and 58 involve trademark infringement; Nos. 48 and 49 involve copyright infringement. All guiding cases are available at http://www.court.gov.cn/shenpan-gengduo-77.html?page=2 (the official website of the Supreme People’s Court).

67  Rules on Case Guidance, art 4.

68  Jing Yang (杨静‎), ‘Barriers to Operate Guiding Cases System and Their Overcoming—An Empirical Research on the Substantiation of Court Hearing in the Beijing Intellectual Property Court (知识产权案例指导制度的障碍与克服‎-北京知识产权法院庭审实质化实证研究‎)’ (2016) 10 Journal of Law Application (法律适用‎) 69, 72.

69  It should be acknowledged that the Guangzhou IP Court, which has cross-regional jurisdiction in Guangdong Province, unifies the standards of adjudication with respect to IP issues adopted by twenty-one intermediate courts in Guangdong Province. However, due to the absence of an IP appeal court, the improvement brought about by the current system is not as significant as might be expected. Furthermore, despite the absence of an IP appeal court, the Guiding Case system may help achieve the goal of unifying adjudicative standards in the future.

70  One suggestion is to set up a single, unified, IP appeal court in Beijing, augmented by several circuit courts of appeals in the regions where IP cases are predominantly concentrated. See Handong Wu (吴汉东‎), ‘IP Court Construction in China: Pilot Samples and Fundamental Direction (中国知识产权法院建设‎:试点样本与基本走向‎)’ (2015) 10 Journal of Legal Application (法律适用‎) 2, 3; also see Xinming Cao (曹新明‎), ‘Establishment of IP Courts: an Important Measure of Rule of Law and Judicial Modernisation (建立知识产权法院‎:法治与国家治理现代化的重要措施‎)’ (2014) 5 Law and Social Development (法制与社会发展‎) 60, 62. Another suggestion is to set up several regional IP appeal courts to act as agencies of the Supreme Court. See Li and Zhao (n 24) 122.

71  From January 2014 to September 2014, the Beijing No. 1 Intermediate People’s Court heard 3,632 administrative cases involving affirmation and authorization of trademarks at first instance and the Beijing High Court heard 905 administrative appeals. According to research carried by the Beijing High Court, about 70% of the total administrative cases specified above were caused by civil disputes between private bodies. See Yan Zhao (赵岩‎) and Bo Zhou (周波‎), ‘Beijing Courts Reported the Adjudication on Cases Involving Affirmation and Authorisation of Trade Mark (北京法院通报商标授权确权案件审理情况‎)’ (Beijing Courts [北京法院网‎], 30 October 2014), available at <http://bjgy.chinacourt.org/article/detail/2014/10/id/1470852.shtml>accessed 23 December 2016. The data indicates that a considerable number of administrative cases with the disputes on validity of intellectual property rights would not be filed if Chinese courts have judicial power to declare intellectual property rights valid or not.

72  Li Zhu (朱理‎), ‘Review and Lesson-drawing on Litigation System of Taiwan’s Intellectual Property Court (台湾地区‎”智慧财产法院‎”诉讼制度考察与借鉴‎)’ (2015) 10 Intellectual Property (知识产权‎) 64, 64.

73  Article 3 of Intellectual Property Court Organisation Act (智慧財產法院組織法‎) (TPE). A noteworthy characteristic of Taiwan’s IP court is that it has jurisdiction to hear civil appeals against the judgment made by the same court.

74  For instance, appeals against the decision of the basic People’s Courts in criminal cases concerning crime of counterfeiting registered trademark (Article 213 of Criminal Law of the People’s Republic of China 1997) shall be dealt with by intermediate courts. While IP courts have the jurisdiction to hear appeals against an administrative penalty decision due to trademark counterfeiting. The judge in the intermediate court and the judge in the IP court may apply different standards when it comes to determining whether a trademark look is identical to the actual registered trademark.

75  See Arts 213 and 217 of Criminal Law of the People’s Republic of China 1997.

76  For example, the intellectual property tribunal in the Guangzhou Intermediate People’s Court began to hear cases involving environmental resources from February 2015, and it will set up a new environmental resource tribunal when the Supreme Court approves its application for withdrawal from the intellectual property tribunal.

77  The Supreme People’s Court (n 2) ch 1.

78  Zhu (n 71) 64.

79  Shuyang Hu (胡姝阳‎), ‘Shanghai is Exploring New Mechanism of IP Adjudication (上海探索知识产权专业审判新机制‎)’ (National Copyright Administration of the People’s Republic of China [中华人民共和国国家版权局‎], 31 December 2015), available at <http://www.ncac.gov.cn/chinacopyright/contents/518/271736.html>accessed 20 December 2016.

80  The Guangzhou IP Court, Judicial Protection Provided by the Guangzhou IP Court in 2015 (广州知识产权法院司法保护状况‎[2015年度‎]) (White Paper, 2016) ch 1.

81  Provisions on Jurisdiction, art 5.

82  The Supreme People’s Court (n 65).

83  Nianzu Shen (沈念祖‎), ‘The Explorer of Judicial Reform Discloses the Secrets of First IP Court in China (司改探路者解秘全国首家知识产权法院‎)’ (The Economic Observer [经济观察网‎], 19 November 2014), available at <http://www.cnipr.com/sj/zx/201707/t20170718_213268.html> accessed 3 December 2016.