On the morning of April 19, 2011, China’s Supreme People’s Court held a press conference, publishing the Intellectual Property Protection by Chinese Courts in 2010 (White Paper).
The White Paper was published in a bilingual format with 13,000 Chinese characters and 8,000 English words respectively. After releasing the 2009 version of White Paper for the first time last year, China’s Supreme People’s Court for the second time reviewed and summarized the intellectual property protection by the people’s courts of China in 2010, presenting a comprehensive showcase of the Chinese courts’ achievements in intellectual property judicial protection.
According to the data in the White Paper, the number of civil cases relating to intellectual property has increased dramatically in 2010.
First instance IP civil cases received and closed by all local courts of China were 42,931 and 41,718 respectively, proving a year-on-year increase of 40.18% and 36.74% respectively. Total disputed value of newly received cases of first instance was 7,948,013,300 yuan. Of the newly received cases, there were 5,785 on patent, exhibiting 30.82% increase from 2009; 8,460 on trademark, 22.50% increase from 2009; 24,719 on copyright, 61.54% increase from 2009; 670 on technology contracts, 10.31% decrease from 2009; 1,131 on unfair competition (33 of 1131 were monopoly-related civil cases of first instance), 11.78% decrease from 2009; and 1,966 on other intellectual property, 14.17% increase from 2009.
For IP-related civil cases where foreign parties are involved, the total number of closed cases was 1,369 in 2009, 0.59% more than last year; for cases involving Hong Kong, Macao or Taiwan, the number was 278, 21.25% less than last year. The number of closed monopoly-related civil cases of first instance was 23.
Newly received and closed intellectual property cases of second instance for the year were 6,522 and 6,481 respectively, and the respective year-on-year increases were 22.13% and18.01%. Newly received and closed retrial cases were 111 and 109 respectively, increasing by 11% and 1.87% respectively from last year.
In 2010, the Supreme People’s Court received 313 IP-related civil cases, and closed 317 cases. Of these, the newly received cases for retrial application totaled 198, and a total of 206 (including carried over cases) retrial application cases were closed.
Quality and efficiency of adjudication has been continuing to improve. Clearance rate of IP-related civil cases at first instance in all local courts rose from 2009’s 85.04% to 2010’s 86.39%; appeals rose from 2009’s 48.82% to 2010’s 49.65%. Retrials fell from 0.33% in 2009 to 0.27% in 2010, while reversal of decisions at appeal also fell from 6.00% in 2009 to 4.57% in 2010. Clearance rate of civil cases relating to intellectual property at the Supreme People’s Court increased from 55.93% in 2008 to 88.64% in 2009, an improvement of 32.71%. Clearance rate of IP-related civil cases at first instance within the completion time in all local courts rose from 2009’s 97.38% to 2010’s 97.93%.
In 2010, the People’s Courts, by correctly considering the applicable conditions of pre-trial provisional measures and property preservation, also appropriately decided to adopt the measures under the law, having the particular functions of the pre-trial provisional measures effectively exercised to protect IPRs. A total of 55 applications for pre-trial preliminary injunction in IP-related cases were received by local courts, 89.74% were granted approval; 294 applications for pre-trial preservation of evidence were received, 97.46% were granted approval; Through actively adopting measures of evidence preservation according to law, the courts eased parties’ difficulties in proof. 126 applications for pre-trial preservation of property were received, 97.41% were granted approval.
2010 also found a surge in IP administrative lawsuits of first instance, especially in trademark cases. Local courts of China received 2,590 and closed 2,391 IP administrative lawsuits of first instance, an increase of 25% and 21.31% respectively over the previous year. Of these, 551 new patent cases were received, 17.51% less than last year; 2,026 trademark cases, 47.23% more than last year; 2 copyright cases, a drop of 50% from 2008; and 11cases on other subjects. The Supreme People’s Court received 60 such new cases and closed 56. The main reasons to the rise of trademark administrative lawsuits were the soar of requests filed with the Trademark Review and Adjudicaiton Board for trademark review, the increasing rate of lodging administrative lawsuits in connection with the trademark review decisions and intensive clearing-up of backlog cases by the Trademark Review and Adjudicaiton Board, etc. Among the concluded cases, 1,776 verdicts were upheld, covering 74.28% of the total; 330 were revoked, making up 13.8% of all; 162 were nolle prosequi, 6.87% of all; 87 had claims rejected, 3.64% of all; 30 rejected, 4 were transferred; and 1 case was closed in other way.
The IP-related administrative cases of first instance involving foreign, Hong Kong, Macao and Taiwan parties increased sharply with a total number of 1,004, 41.99% of total administrative cases of first instance. Of these, 815 were administrative cases relating to foreign parties; 98 were cases involving Hong Kong; 11 were cases involving Macao; and 80 were cases involving Taiwan.
IP administrative cases of second instance increased considerably as well. Newly received and closed cases of second instance for the year were 394 and 240 respectively. Of these, 206 verdicts were upheld; 20 verdicts were amended; 1 was remanded; 9 were nolle prosequi; and 4 were rejected.
Two administrative cases that created certain social impact were specifically mentioned in the White Paper. One of the two is an administrative dispute case concerning the invalidation of a patent for design. CCPIT Patent & Trademark Law Office representing Honda Motor Co. Ltd filed with the Supreme People’s Court a petition for retrial of the case, wherein Shijiazhuang Shuanghuan Automobile Co. Ltd a petitioner for invalidation of the patent for design and the Patent Reexamination Board under the SIPO were involved. After three years in which the Supreme People’s Court held a hearing, issued an order of certiorari and held a courtroom retrial, an administrative judgment was rendered on Nov. 26 2010. The Supreme People’s Court clarified in the judgment the basic method of determining the identity and similarity of two designs and affirmed: in determing the identity and similarity of two designs, more attention should be paid to the variation of other desiging features that may cause more attention of ordinary consumers, because the common designing features of a product have relatively limited impact to the visual effect on ordinary consumers.Therewith, the court revoked the administrative judgment made by the Beijing High People’s Court, the administrative judgment made by the Beijing First Intermediate People’s Court and the invalidation decision made by the Patent Reexamination Board. It is the very first time, ever since the China’s Patent Law came into force on April 1, 1985, that the Supreme People’s Court made a samplar judgment on the method of determining identity and similarity of designs. The judgment has had, is effecting and will continue to exert a significant influence on the allowance and affirmation of patent for design and trials of infringement disputes in China.
According to the White Paper, criminal sanctions and deterrence to intellectual property crimes were further exerted. IP criminal cases of first instance increased sharply in 2010. Newly received cases of first instance for the year were 3,992, 9.58% higher than last year, among which 1,294 were crimes of intellectual property infringement (cases of passing off of registered trademarks were 1153), 26.99% higher than last year; 596 were crimes of producing and selling counterfeit and inferior goods (involving infringement of intellectual property right), 6.73% lower than last year. 2,078 were crimes of illegal business operations (involving infringement of intellectual property right), 6.62% higher than last year; and 24 were concerned as other criminal cases.
All courts of China concluded, as a total in 2010, 3,942 criminal cases of first instance relating to intellectual property infringement, 7.7% more than last year; and the judgments have become effective on 6,001 individuals, of which, 6,000 persons were found guilty. Among the closed cases, 1,254 were convicted for crimes of intellectual property infringement, 24.53% higher than last year, and decisions were effective on 1,966 persons, 22.49% higher than last year; 609 were found guilty of producing and selling counterfeit and inferior goods (involving infringement of intellectual property right), and the decisions were effective on 926 persons; 2,054 were found guilty of illegal business operations (involving infringement of intellectual property right), and the decisions were effective on 3,0686 persons; the remaining 25 were found guilty of other crimes relating to infringement of intellectual property, and decisions were effective on 41 persons. 345 were found guilty of counterfeiting the registered trademark and decisions were effective on 1028 persons; 182 were convicted for crimes of illicit manufacture and sell of representations of a registered trademark and the decisions were effective on 253 persons; 2 were convicted for crimes of forging patent and the decisions were effective on 3 persons; 85 were convicted for crimes of infringing copyright and the decisions were effective on 142 persons; 5 were convicted for crimes of sales of infringement copies and the decisions were effective on 10 persons; 50 were found guilty of illegal business operations and the decisions were effective on 71 persons.
The People’s Courts seriously implemented the Several Opinions on Principle of “Give Priority to Mediation and Combine Mediation and Adjudication” issued by China’s Supreme People’s Court. In the case of trial, the People’s Courts adhered to the principles of legitimacy and free will, strengthened the role of mediation, and attached importance to the conciliation of conflict. For those cases which could be mediated according to the law, or could achieve better results by mediation, mediation shall be firstly adopted. The People’s Courts also put emphasis on regulating the mediation and correctly handled the relationship between mediation and judgment. For those cases that failed mediation or were not suitable for mediation, the People’s Courts made judgments timely according to the law. In addition, the People’s Courts kept on making efforts in expanding the scope of mediation, standardizing judicial procedures for mediation, attaching importance to the quality of mediation and enhancing the efficiency of mediation.
In 2010, the mediation by the People’s Courts in IP litigations developed towards the direction of systematization, standardization and rationalization, and had stepped up to a new level. The averaged rate of mediation or withdrawal of actions after mediation in the IP-related civil cases at all courts of China came up to 66.76%, 5.68% more than the previous year. The Supreme People’s Court successfully resolved 24 cases through mediation or withdrawal of actions after mediation.
The People’s Courts further improved jurisdiction arrangement for intellectual property cases and optimized the allocation of judicial resource. Up to the end of December 2010, the Intermediate People’s Courts having jurisdictions over the issues concerning patents, new plant varieties, layout design of integrated circuits, and cases relating to recognition of well-known marks have been respectively 76, 44, 46 and 41. The number of the basic courts having jurisdiction over ordinary IP cases have come to 101.
Publicity promotes justice, and justice wins trust of the public. The People’s Courts stuck to “Sunny Judicature” to ensure the justice by publicity. The courts further made clear the to-be-publisized content, procedure and method in respect of acceptance of case, court trial, execution of judgment, hearing, documentation and trial affairs. By creatively holding press conference, court open day and live webcasting etc., the courts increased the transparency of intellectual property trials, and thus advanced the justice, standardized the exertion of judicial discretion, and obtained the trust of the public, having really achieved “Sunny Judicature”.
In 2010, the People’s Courts always attached importance to the unification of criteria in application of IP laws and in adjudication, and promoted the standardization of IP-related trial by issuing the directives such as judicial interpretations and publishing exemplary cases etc., so that the justice and unification of IP trials have been ensured. The local courts of China further selected, by various means, typical and outstanding cases, and the High People‘s Courts in Tianjin, Chongqing, Shandong, Anhui, Fujian, Hunan, Sichuan, Heilongjiang, etc. published 10 typical local cases. The High People’s Court of Guangxi Zhuang Autonomous Region established a directive system of typical cases. Xi’an Intermediate People's Court issued Intellectual Property Protection Classical Cases.
