According to the World Intellectual Property Organisation (‘WIPO’), China is now ranked no. 1 in the world in terms of IP filings (patents, trade marks and designs). It is, perhaps, no surprise that there have been reports that IP litigation in China has ‘exploded’ in recent years, and that the Chinese justice system has been slow to adapt to this increase.
The Chinese Government has now approved a proposal for the establishment of IP specialist courts in municipalities of Beijing and Shanghai, and the province of Guangdong.
IP litigation in China
IP litigation in China is thought by many to be fraught with risks given the perception of uncertainties associated with litigation procedures, and that decisions from Chinese courts can be unpredictable.
However, statistics show that plaintiff (foreign and Chinese) ‘wins’ in Chinese IP court cases have been, on average, at about 80% since 2006. One would argue that these results are an outcome of the action taken by the Chinese Government to strengthen its IP rights regimes in recent times. It should be remembered that Chinese IP rights regimes are relatively young compared to those in jurisdictions such as Australia, the US and Europe - China only becoming a member of WIPO in 1980. So, China has had to ‘come-up-to-speed’ quickly.
Chinese law offers administrative and civil procedures for confronting IP infringement, (discussed further here for example). Such procedures are not mutually exclusive, and it is typically recommended that both procedures be explored when confronting IP infringement in China.
Regarding civil procedures, courts of general jurisdiction with specialised divisions hear IP rights cases in China. The Chinese justice system consists of Basic People's Courts, Intermediate People's Courts, High People's Courts, and the Supreme People's Court. As reported here ‘the specialised IP Courts will sit at the same level as Intermediate People’s Courts in China’s judicial hierarchy and will hear both civil legal and administrative IP-related cases (currently, many IP disputes in China are handled by quasi-judicial administrative agencies rather than bona fide courts). The IP Courts will have jurisdiction over lower courts’ decisions relating to civil and administrative actions, as well as appellate cases’.
Will this improve transparency?
Specialised IP Courts should be beneficial for both foreign and Chinese companies in that these Courts will be resourced to specifically hear IP matters. Time will tell whether the establishment of these specialised IP Courts will address concerns of local protectionism and undue political influence in IP adjudication.