It has been generally acknowledged that contractual and infringement disputes relating to intellectual property (IP) are arbitrable in China. The arbitrability of IP ownership disputes is, however, not a simple yes or no issue. While copyright ownership could be reviewed in an arbitration, ownership of registered trademarks and patents are subject to the examination by competent administrative authorities and subsequently by courts.
Does a valid arbitration agreement pre-empt litigation in case of an IP infringement?
(1) IP infringement disputes are arbitrable in China making them typically non-litigable
IP infringement disputes are considered to fall into “other disputes over rights and interests in property” under Article 2 of PRC Arbitration Law and are not regarded as non-arbitrable like in the case of marital disputes and administrative disputes.
If a valid written arbitration agreement exists and an IP owner incorrectly commences a court proceeding, the court should explain this to the plaintiff and inform them that they ought instead to commence arbitration, according to Article 124(2) of PRC Civil Procedure Law.
This is also the apparent judicial consensus, though not binding, where parties of a foreign-related commercial contract have a valid arbitration agreement specifying that disputes in connection with the contract shall be settled through arbitration, a court shall not have jurisdiction over an infringement lawsuit lodged by the plaintiff in connection with, or arising from, the execution or performance of the contract.