The policy makers have already realized that strong and efficient IPR protection is one of the most important ways to incent IP creations and further the economy and welfare of the country. With the explosive growth of IP registrations and creations in China and of IP disputes before courts, there is an anxious demand for the judicial system to improve the efficiency, quality and unity of IPR judicial protection. In this context, although the discussion of what kind of judicial system for IPR protection is the best for the country continues, the country has decided to establish specialized IP courts to adjudicate IP casesfor going to a more centralized and stronger IPR protection.

Here we will have a review of the landmark events in 2014 regarding establishment of the initial three IP courts in China, inquiring into the jurisdiction of the IP courts and anticipate the next actions which might be taken by the IP courts in the near future. It is very clear from the voice of the policy makers that the establishment of the IP courts is only the first step in the reform of the IPR judicial protection system in China.

  1. Landmark events inestablishment ofthe IP courts in 2014

On July 9, 2014, the Supreme Court issued the Fourth Five-year Reform Outline of the Court (2014-2018) , proposing to push forward establishment of specialized IP courts in the areas with concentrated IP cases.

On August 31, 2014, the Standing Committee of the National People's Congress ("NPC") passed theDecision of Establishing Intellectual Property Courts in Beijing, Shanghai and Guangzhou .

On November 3, 2014, the Supreme Court issued theSupreme Court's Regulations on Jurisdiction of Cases of the IP Courts in Beijing, Shanghai and Guangzhou .

As of November 6, 2014, the Beijing IP court began to perform its duties. Before this date, judges for the Beijing IP court hadalready beennominated,including the chief judge Chi SU from the Beijing Second Intermediate Court, deputy chief judge Jinchuan CHEN from the IP tribunal of the Beijing High Court and depute chief judgeYushui SONG (Ms.) from Beijing Third Intermediate Court.

On December 16, 2014, the Guangzhou IP court opened up, and it began to receive cases as of December 21, 2014.This IP court is the only court that have cross-regional jurisdiction over certain IP cases. There are totally 13 judges including the chief judge in the court.

On December 28, 2014, the Shanghai IP court was formally founded. The court began to receive cases from Jan. 1, 2015. Currently 10 judges were nominated for the court.

  1. Jurisdiction of the IP courts

The IP courts will be the core player of a three-year test in adjudicating especially technologically complex cases, according to the Decisionof the Standing Committee of the NPC and the Supreme Court's Regulations, which stipulate the "first-instance jurisdiction", "cross-regional jurisdiction", "exclusive jurisdiction", "second-instance jurisdiction" and "appellate jurisdiction".

  1. The IP courts will be established in Beijing, Shanghai and Guangzhou and will have exclusive jurisdiction on the cases as defined below.
  2. The IP courts have jurisdictionfor first instance on,
    1. Civil and administrative cases involving patents, new varieties of plants, layout designs of integrated circuit, technical secrets andcomputer software;
    2. Administrative cases regarding copyrights, trademarks, unfair competitionsagainst decisions made by organs of the State Council or by county-level or over county-level local governments;
    3. Civil cases involving recognition of well-known trademarks. [First-instance jurisdiction]
  3. The Guangzhou IP court shall have cross-regional jurisdiction oncivil and administrative cases involving patents, newvarietiesofplants, layout designs of integrated circuit, technical secrets and computer software and oncivil cases involving recognition of well-known trademarks, within the territory of Guangdong Province. [Cross-regional jurisdiction]
  4. The Beijing IP court will have exclusive jurisdiction for the first instance on casesagainst,
    1. Decisions made by organs of the State Council regarding allowanceorvalidity of IP rights including patents, trademarks, newvarietiesofplants and layout designs of integrated circuit;
    2. Decisions made by organs of the State Council regarding issuance of a compulsory license, compulsory license fees or rewards involving patents, new varieties of plants and layout designs of integrated circuit;
    3. Other administrative acts made by organs of the State Council regarding allowance or validity of IP rights. [Exclusive jurisdiction]
  5. The IP courts shall have the jurisdiction on review of judgments or decisions of first instance made by basic-level courts regardingcopyrights, trademarks, technical contracts and unfair competitions in their territorial jurisdiction.[Second-instance jurisdiction]
  6. The High Courtsshall have the jurisdiction on appeals against the IP courts' first instance judgments or decisionsin their territorial jurisdiction. [Appellate jurisdiction]
  7. Where a case includes matters within the above item 2.a) or 2.b) and matters within the jurisdiction of other courts, the case shall be tried by the IP courts.

The Supreme Court shall report to the Standing Committee of the NPC the implementation situation of the decision after three years.

  1. Parallel court systems for IP cases

In 2013, the Chinese courts heard more than 110,000 IP casesincluding first instance and second instance cases.The establishment of the IP courts will not influence the current IP legal proceedings apparently. Instead, it is an intrinsic power to propel the IPR protection to a higher level.

The Chinese court system consists of basic courts at the county level, intermediate courts, high courts and the Supreme Court.The IP Courts in Beijing, Shanghai and Guangzhou all sit at the same level as the intermediate courts in China and will hear both civil and administrative IP cases.However, criminal cases are still within the jurisdiction of the general courts.

IP cases generally involvecivil and administrative proceedings but may also involve criminal proceedings when the infringing act is severe.

  1. IP enforcement cases

With the establishment of the IP courts, an IP enforcement case may be tried by a general basic court, a general intermediate court or by an IP court, whichever has the jurisdiction over the case.

In China, an owner of an IP right may enforce his right through legal proceedings or through administrative proceedings. For example, when a patent owner finds infringing act, he may institute a legal action before an intermediate-level court or request a local Patent Office to stop the infringing act. In the case of taking the administrative proceedings, the decision made by the local Patent Office may be appealedto the intermediate-level court so as to be examined through administrative litigation proceedings.

For a trademark right, besides relaying on a court to enforce the right, the right owner may request a local Industrial and Commercial Bureau to stop an infringing act, and the decision of the local Industrial and Commercial Bureau is also appealable to the court to be examined through administrative litigation proceedings.

For copyright, the patent owner may similarly relay on the court or relay on a local Copyright Office forcopyright disputes.

The established IP courts don't exclude the competent administrative organs from executing their IP protection duties.

Regardless of the three specialized IP courts, before the general courts with jurisdiction on IP cases, an IP related civil case is tried only by a specialized IP tribunal. It is highly possible that an IP related administrative case, such as that againsta decision of a local Patent Office,is tried by an administrative tribunal, instead of by an IP tribunal, of the court.

  1. IP allowance or validity cases

A significant number of administrative litigation cases are the cases instituted against decisions of the Patent Reexamination Board or the Trademark Review and Adjudication Board, regarding allowanceof patent or trademark applications or validity ofpatents orregistered trademarks.These cases were previously heard by the Beijing First Intermediate Court and the newly established Beijing IP court will have the unique jurisdiction over thesekinds of cases in the future.

  1. Future Prospect

In China, it has been a common view to promote innovation and development of the country through strong IPR protection. The establishment of the IP courts, which is one of the approaches to strengthen theIPR judicial protection, is also for realizing thenational innovation-driven development strategy and economic development of the country.

We can predict that the establishment of the IP courts will improve the quality andefficiency of IP litigation, and enhance the IPR protection in China."Civil and administrative cases tried by the same IP courts, this is one significant feature of China's IP courts", said Chuang WANG, deputy chief judge of the IP tribunal of the SupremeCourt. The specialized IP courts hear both civil and administrative IP cases, which conforms to the current practice and is advantageous to a unified civil and administrative protection for IPRs.

The IP courts are not only a test of the court system but also a launch of a series of reformsfor IPR protection in China.We can foresee that a series of actions will betaken through the IP Courts.

As said by Chuang WANG, "the IP courtsnot only indicate a significant reform to China's IPR judicial protection system, but also are explorers and pioneersof the China's judicial reform", the IP courts will take the trial judge responsibility system ,explorethejudicial system for specified number of judges , and improve the tribunal responsibility system . Further, within the IP courts, a procedural system concentrating on trial of an IP case will be pursued so as to establish specialized procedures and regulationsconforming to IP trial rules.

Further, as revealed by Chuang WANG, the IP courts will explore the technical investigator system so as to improve the scientificity, professionalismand neutrality of fact-findings.

The establishment of the specialized IP courts is a milestone of IPR protection in China. It lays the bedrock for the development of the IPR judicial protection system in China. With commencement of operations of the IP Courts, the reform of the IPR protection system formally kicks off.

On December 26, 2014, it was revealed that the Supreme Court, in a report, suggested setting up a high court for intellectual property disputes at national level in China and deliberating on the issue of hearing both infringement litigation and validity dispute of a patent simultaneously by the same court, for the purpose of shortening pending of an IP case, unifying the adjudication etc. This signals that further actions re reform of the IPR protection system will not be long. It is no doubt that a strong, efficient and unified IPR protection system will be launched in China.