Key Importance of Intellectual Property Judicial Protection under the Compendium of the National Intellectual Property Strategy

July 13, 2008

By Qiang Ma with Unitalen Attorneys at Law

The Compendium of the National Intellectual Property Strategy issued on June 5, 2008 established a direction for the development of Chinese intellectual protection. Para 9 in the part of Strategic Emphases of the Compendium highlights that the judicial protection system and administrative enforcement system should be strengthened while the leading influence of judicial protection for intellectual property rights should be exerted. This is the first time that China emphasized the importance of judicial protection of intellectual property by means of state policy.

As is known to all, intellectual property rights can be protected through two routes: judicial and administrative. While administrative protection is enforced by such administrative organs as the Administration for Industry and Commerce, the Administration of Quality Supervision, Inspection and Quarantine, the Intellectual Property Bureau, the Copyright Administration and Customs, the role of judicial protection is played by the people’s courts at different levels. To exert the leading influence of judicial protection means the perfection of intellectual property legislation and reinforcement of the judicial power of people’s court.

Currently there are some issues existing in the judicial system, which needs to be settled to the core for the purpose of sound judicial protection of intellectual property. Only when the issues are successfully addressed can the intellectual property protection system function well to give incentives to the rights owner.

1)Conflicts between civil hearing and criminal hearings. The division of civil, administrative and criminal prosecution laws has resulted in the conflicts of jurisdiction regarding cases of a same fact. In civil cases we have adopted the principle that an intellectual property case shall be heard by an intermediate court with the exception that only a few selected basic-level people’s court are qualified for hearing an IP case. But the current criminal prosecution law provides that a first-instance intellectual property criminal case is heard by a basic-level people’s court. It means that for a same infringement case, different courts may take in charge of ascertaining the nature of infringing acts and penalty criteria.

2)Weakening of judicial protection effects due to the scattering of civil, administrative and criminal hearing powers. Under the current judicial practice, normally the intellectual property tribunal examines a civil case; the administrative tribunal hears an intellectual property administrative case, such as a trademark refusal review proceeding, while the criminal tribunal hears a criminal case. It is not convenient for a plaintiff to use three courts to seek remedy for protecting his intellectual property rights.

3)Complication of intellectual property administrative cases. As a WTO member, the patent and trademark laws were both revised in 2001 to reflect the requirement of TRIPS, adding the changes among others the judicial review of administrative decisions. However, the complication of administrative cases is frustrating for rights holders due to the length of the proceedings. To take an example, a trademark opposition case may undergo decision of Chinese Trademark Office, adjudication of Trademark Review and Adjudication Board, first-instance judge by Beijing No.1 Intermediate People’s Court and then second-instance ruling by Beijing High People’s Court, the whole proceeding of which may last more than ten years.

4)Disunity of judicial criteria in hearing intellectual property cases across the country. For an intellectual property case, the rights holder can sue the infringer in different provinces but may get different decisions by different courts. For example, the judicial standards for recognizing a well-known trademark vary from province to province, resulting in the puzzle and worry of brand owners in preparing and submitting qualified evidences to show the reputation of the trademark.

In order to deal with and settle the above-mentioned issues, the following countermeasures are proposed by many intellectual property scholars, officials, judges and practitioners. .

1)Promotion of “3-in-1” mechanism. A two-step approach for establishing a grand IP trial system is therefore proposed: the first step is to establish an intellectual property tribunal in the court, exclusively hearing all administrative, civil and criminal cases; the second step is to found an appellate court in Beijing, exclusively dealing with appeals from patent and trademark review organs as well as the retrial intellectual property cases arising from all higher people’s court.

2)Role change of administrative review organs. Currently the Patent Review Committee and Trademark Review and Adjudication Board will become defendant in an administrative patent and trademark affirmation suit. It is therefore necessary to make it clear that the two administrative organs will not be defendant in a suit. Rather, where an intellectual property affirmation suit involves an adversary party, the plaintiff and defendant should be the parties themselves.

3)Establishment of special IP courts. To save cost, improve efficiency and enhance social benefits, the establishment of special intellectual property courts are now widely regarded as a pertinent approach for better improving judicial protection of intellectual property. It is just an international practice to found a special IP court, not merely a IP tribunal, to hear all kinds of IP cases.

To exert the leading influence of judicial protection of intellectual property also has its practical prospective. Under the law and practice before 2008, some IP cases can only be first brought to the administrative organ because the court will not accept the same as a civil case. For example, an earlier copyright owner could not initiate legal proceedings against infringing use of a later registered trademark incorporating the copyrighted device.

In 2007, Beijing High People’s Court heard an administrative case regarding the cancellation of a device mark registered for more than five years. The device contained in the mark is indeed the design of the popular Japanese Cartoon figure Labixiaoxin. Before February of 2008 when the Supreme People’s Court issued a new opinion allowing the acceptance of such copyright infringement cases, the courts across China will not protect earlier copyright and the owner of the Labixiaoxin device could not commence infringement action against the use of the infringing registered trademark. With this emphasis of judicial protection of IP is recorded in the Compendium, it is expected that the courts will accept more and more types of intellectual property cases having the civil-dispute nature.

The importance of judicial protection of intellectual property can also be reflected in the revision draft of the Patent Law and Trademark Law, which may be submitted to the People’s Congress in 2009. Under the revision draft of trademark law, a case brought to the court from a trademark opposition or dispute will be considered as a civil case and the Trademark Review and Adjudication Board will not appear in court as defendant.