Exploring new models of regional IP arbitration

By Wang Gongjing, Langfang Arbitration Commission ; Wang Zhengzhi, Global-law Law Firm

With the rapid development of the knowledge economy, intellectual property (IP) disputes have become increasingly diversified and complicated. The traditional judicial and administrative methods of resolving IP disputes cannot meet objective needs.

王龚婧, Wang Gongjing, Head of international business division, Langfang Arbitration Commission
Wang Gongjing
Head of international business division
Langfang Arbitration Commission

Arbitration has significant advantages in resolving IP disputes, such as professionalism, confidentiality, flexibility, trans-regional, enforceability, and respect for the autonomy of the parties. In addition, resolving IP disputes through arbitration is more conducive to the continued co-operation between the parties to the dispute. Therefore, in recent years, it is obvious that IP disputes have been turning to arbitration for resolution. More and more parties tend to submit relevant disputes to arbitration for settlement.

Strengthening IP arbitration and mediation has also become an important part of the IP national strategic plan. In January 2017, the State Council released the 13th Five-Year Plan on National IP Property Protection and Utilization. It detailed “the establishment of IP protection including judicial trial, criminal justice, administrative law enforcement, speeded-up rights protection, arbitration and mediation, self-regulation of the industry, and social supervision”.

In March 2018, the State Intellectual Property Office (SIPO) issued the Circular on the Capacity Building of Intellectual Property Arbitration and Mediation Institutions, which specified “to focus on supporting institutions, to strengthen capacities and improve the level of resolution of IP disputes through the selection of arbitration and mediation institutions”.

In November 2019, the General Office of the Communist Party of China Central Committee and the General Office of the State Council issued the Opinions on Strengthening Intellectual Property Protection, which proposed to improve the mechanisms of IP arbitration, mediation and notarisation, and cultivate and develop arbitration institutions, mediation institutions and notarisation institutions.

王正志, Wang Zhengzhi, Partner, Global-law Law Firm
Wang Zhengzhi
Global-law Law Firm

The arbitrability of IP disputes

IP disputes are usually classified into three categories – contract disputes, infringement disputes and ownership disputes.

According to China’s Arbitration Law: “Contractual disputes between citizens of equal status, legal persons, and other economic organisations, and disputes arising from property rights, may be put to arbitration.” It is obvious that contract disputes concerning IP are arbitrable contract disputes above-mentioned, and are thus arbitrable.

The infringement disputes concerning IP are not excluded from arbitration according to the Arbitration Law, and are thus arbitrable. The parties may reach an agreement on arbitration after occurrence of the infringement.

In disputes concerning ownership of IP, the disputes concerning copyright are arbitrable according to provisions of the Copyright Law, that “the dispute may be submitted to the arbitration institution for arbitration, according to the written arbitration agreement reached by the parties, or the arbitration provision in relevant copyright contract”.

However, patent and trademark rights must be obtained through authorisation from state authorities, which belong to “disputes that have been stipulated by law to be settled by administrative authorities” – and cannot be put to arbitration. It should be noted that the arbitrability restrictions on IP disputes such as patents and trademarks are gradually opening up. For example, Hong Kong issued the Arbitration (Amendment) Ordinance in 2017, which clarified that disputes over IP rights may be arbitrated.

Hebei province’s practice of IP protection

The 2020-2021 IP Protection and Promotion Plan of Hebei Province “encourages arbitration commissions and mediation institutions to establish professional arbitration and mediation platforms, and mechanisms for [IP] rights”, and “strengthens the construction of professionals in [IP] arbitration”.

Regulations on the China (Hebei) Pilot Free Trade Zone also specify that “the pilot free trade zone should strengthen IP protection and support the establishment of international IP arbitration institutions”.

Hebei province is actively promoting arbitration, administrative law enforcement, judicial protection, and other channels to form a joint force in IP protection and strive to improve diversified IP dispute resolution mechanisms including litigation, administrative law enforcement, arbitration and mediation, which guard the development of related industries in the region. Therefore, it is necessary and significant to strengthen the establishment of regional IP arbitration centres.

Establishment of regional IP arbitration centres

Arbitration institutions play a significant role in the establishment of regional IP arbitration centres. Therefore, work should be done in the following aspects:

Improve IP arbitration rules

In addition to formulating special IP arbitration rules, arbitration institutions should also improve the rules in a timely manner to adapt to the development of IP disputes under the new situation;

Strengthen the construction of IP expert teams

Arbitration institutions should focus on recruiting experts in the field of IP and arbitration law professionals, who are proficient in IP rights as arbitrators. Institutions should actively carry out training for arbitrators and case secretaries, and should also promote the establishment of an IP arbitration expert database to support IP dispute resolution;

Strengthen external co-operation in IP protection

Arbitration institutions should strengthen co-operation with relevant regional IP protection departments, carry out IP arbitration research, business training, professional presentations, and jointly provide faster and better channels to resolve IP disputes;

Increase the publicity of IP arbitration system

Widely carry out various forms of IP arbitration publicity work and publicise the IP dispute arbitration mechanism to commercial entities in the free trade zone. Institution should spread relevant contract texts and standardise arbitration clauses, while developing a special arbitration agreement for IP rights to encourage both parties to submit the dispute to arbitration for settlement after the dispute occurs; and

Explore new models of IP protection

Arbitration institutions can try to resolve IP disputes through an arbitration and mediation cohesion mechanism, and innovate IP protection models by strengthening research on types of cases, setting up special research topics and other means.

To sum up, in order to improve the regional IP protection system, arbitration institutions should actively promote the development of IP arbitration and make efforts to build a professional IP arbitration platform.

Wang Gongjing is head of international business division at Langfang Arbitration Commission. She can be contacted on +86 316 2336102 or by email at wanggongjing@lfac.org.cn

Wang Zhengzhi, a partner at Global-law Law Firm, also contributed to the article. He can be contacted on +86 10 8451 2800 or by email at wangzhengzhi@globe-law.com