Specialised IP courts are established

The National People’s Congress Standing Committee has passed legislation establishing the foundations for specialised IP courts in Beijing, Shanghai and Guangzhou.

Following key indications in the last 12 months of the central government’s intention to establish a specialised IP court, the National People’s Congress Standing Committee issued the draft Decision on Establishing Intellectual Property Rights Courts in Beijing, Shanghai, and Guangzhou. The decision established the IP courts as of August 31 2014.

The decision provides some useful insight into the proposed jurisdiction, staffing and supervision of the IP courts, which are intended to further the efficiency and consistency of China’s IP enforcement regime.

With regard to jurisdiction, the IP courts sit within the judicial hierarchy in a position equivalent to the local Intermediate People’s Courts. They will be courts of first instance with respect to ‘technically complex’ civil matters relating to patents, technical trade secrets, plant varieties and semi-conductor layout designs. The draft decision indicates that this jurisdiction will become cross-territorial within three years. In addition, the IP courts will also have original jurisdiction over administrative appeals and invalidation actions stemming from decisions issued by the State Intellectual Property Office and the Chinese Trademark Office.

The IP courts will also serve as courts of appeal for trademark and copyright matters originating in the basic level court in their municipality or province. Foreign parties typically initiate civil matters in the Intermediate People’s Court or higher, so it is likely that the IP courts will serve as courts of first instance in most cases where a trademark or copyright matter involves a foreign party.

Decisions of the IP courts will be reviewed by at least one appellate court, the first of which is the high court of the province or municipality where the relevant IP court is located. The three IP courts will not be the ultimate appellate courts for IP matters, so their role in harmonising IP jurisprudence will be limited.

With regard to staffing, the standing committee of the local People’s Congress will have the power to appoint and dismiss key positions within the IP courts, including the president, deputy president, chief judge, judicial officer and judicial committee. 

Finally, with regard to supervision, the IP courts will have a number of interested stakeholders. They will be supervised by the Supreme People’s Court, the local High People’s Court and the procuratorate, although no particular procuratorate is specified. In particular, the Supreme People’s Court will regulate the workload of the IP courts, including the type and number of cases heard. The standing committee of the local People’s Congress, in its supervisory role, will have significant influence on the functioning of the IP courts. The IP courts will also receive operational guidance and trial supervision from the Higher People’s Court of the district where the IP court is located.

It is thought that the decision establishing IP courts will be welcomed by IP owners. Firstly, it is an important step towards bolstering judicial expertise in technology-related cases. This also assists the IP courts in their primary mission to promote and encourage the protection of technological innovation in China.

Secondly, the establishment of IP courts is expected to improve the consistency of IP judgments, which will address increasing concerns about contradictory judgments made by different Chinese courts. It is also likely that the three cities to host the IP courts - Beijing, Shanghai and Guangzhou - will become even more important venues in forum shopping strategies for future IP infringement cases.

The operational launch and opening decisions of the IP courts are now awaited with great interest.

Charlotte Trinh, Tim Smith and August Zhang, Rouse