Jack Ellis

The first annual report on the activities of the Beijing IP Court – published by litigation analytics firm IPHouse and covering 2015 – suggests that the specialist venue is proving an efficient forum for domestic and foreign trademark owners alike.

The Beijing IP Court was the first of China’s three pilot specialist IP venues to be launched in November 2014, with its counterparts in Guangzhou and Shanghai commencing operations in December 2014 and January 2015, respectively. The court in the capital is unique among the three however, since it is uniquely tasked with hearing appeals against decisions of the Trademark Review and Adjudication Board (TRAB) of the country’s trademark-issuing authority, the State Administration for Industry and Commerce (SAIC).

The IPHouse report – which was compiled at the behest of the Beijing IP Court itself, and can be viewed in English here, courtesy of Beijing East IP and the China IPR Blog – shows that the venue handled 3,394 of these administrative cases at first instance during 2015, with 3,084 (91%) relating to trademarks. Of these, 2,058 cases (or almost 67% of total trademark cases) concerned appeals against rejected applications; 494 (16%) were appeals against invalidity decisions made in the context of a broader dispute; 299 (10%) were appeals against third-party oppositions and 218 (7%) were appeals against cancellations.

When it comes to civil litigation, the scope of the Beijing IP Court’s jurisdiction is different; in terms of civil trademark disputes, it typically only handles second-instance cases. However, it can accept first-instance cases relating to ‘well-known’ or ‘famous’ marks; and its expertise may be called upon in other special circumstances too. Of a total of 377 first-instance civil cases the court heard in 2015, 23 (just over 6%) were trademark disputes.

The IP Court’s trademark docket goes up slightly when it comes to second-instance cases, since it has jurisdiction over all appeals against first-instance IP decisions handed down by lower- and equivalent-level courts in Beijing municipality. The 80 civil trademark appeals it handled in 2015 represented almost 7% of the total second-instance cases it heard (the vast majority of which – 79% – were copyright-related).

Civil first-instance trademark cases lasted an average of 169 days, while second-instance cases lasted an average of 80 days. For administrative trademark cases, the average duration was 128 days.

The report states that there were 54 first-instance cases in which the plaintiffs made claims for compensation that were supported or partially supported by the court, and were awarded damages at the conclusion of the case. Six of these were trademark-related. We can assume that all six likely concerned marks claimed to be ‘famous’ since, as already explained, the Beijing IP Court typically only takes on such civil trademark cases at first instance.

The total compensation claimed by plaintiffs across all six cases was Rmb4.74 million ($684,000); Rmb790,000 ($114,000) was the average claimed per case. Total compensation ultimately awarded by the court amounted to Rmb3.72 million ($537,100), with an average award of Rmb620,000 ($89,500) per case.

There were three trademark cases closing in 2015 in which the Beijing IP Court fully supported that plaintiff’s damages claims. The highest of these was the Rmb3 million claimed by, and eventually awarded to, Moncler in a landmark ruling which saw the court’s first award of full statutory damages for trademark infringement, representing the venue’s second-highest damages award to date.

The IPHouse report does not break down cases involving foreign parties according to IP right, instance or type, only indicating that 1,095 cases – almost 22% of its total workload in the analysed timeframe – featured foreign entities and a further 238 cases (almost 5%) involved parties from Hong Kong, Macau and Taiwan. However, it does reveal that entities from the United States were the most active foreign users of the court, involved in well over a third of so-called ‘foreign affairs’ cases. And IPHouse offers a deep-dive look at these; of the 395 total cases involving a US party, 311 were administrative trademark matters, with a further 19 civil trademark suits.

For most international rights holders, it is still probably too early to say whether or not the Beijing IP Court and its sister venues have been a resounding success. But the trend towards higher damages awards will be welcome; and Chinese judicial authorities – who are keen to challenge foreign perceptions of excessive local bias and protectionism in the country’s justice system – will likely be pleased with the court’s performance and its apparent popularity with overseas litigants.

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