A comparison of patent regimes: China

    By Yuan Yue, CCPIT Patent and Trademark Law Office
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    Recently, the Supreme People’s Court (SPC) issued new provisions on the jurisdiction of IP litigation cases, making the jurisdiction of such cases even more complicated. This provision does not comprehensively sort out the jurisdiction provisions of all IP litigation cases, but only amends other historical provisions. Therefore, reading this provision alone may not be sufficient for a clear understanding of the specific jurisdiction of each type of case, and it needs to be interpreted in combination with historical provisions.

    Yuan Yue
    Yuan Yue
    Counsel
    CCPIT Patent and Trademark Law Office, Beijing
    Tel:+86-10-66046479
    Email: yuany@ccpit-patent.com.cn

    In April, the SPC issued the Provision on the Jurisdiction of Intellectual Property Civil and Administrative Cases of First Instance, and the Notice on Printing and Distributing the Standards for the Jurisdiction of Primary People’s Courts Over Intellectual Property Civil and Administrative Cases of First Instance, which came into force on 1 May. This article focuses on the changes in the jurisdiction of patent cases.

    Article 1 of the provision defines seven types of special cases: ownership and infringement disputes on invention patents; utility model patents; new plant varieties; integrated circuit layout design; technical secrets; computer software; and monopoly disputes. Civil and administrative cases of the first instance in these seven types of cases shall be under the jurisdiction of the IP courts, the intermediate courts in the place where the government of a province, autonomous region or municipality directly under the central government is located, and the intermediate courts designated by the SPC. Where laws have provisions on the jurisdiction of IP courts, such provisions shall prevail.

    In fact, before the implementation of the provision, the jurisdiction of these seven types of cases was substantially the same as that described in the provision, except that several primary courts had jurisdiction over patent disputes for a short time. The change is that before the implementation of the provision, ownership and infringement disputes of design patents and IP contract disputes also had the same jurisdiction distribution as the seven types of cases. After the implementation of the provision, they have been spread to other intermediate courts or to the jurisdiction of primary courts.

    This is in response to the requirements of the central government for further improving the functions of intermediate courts and primary courts in the Reform Plan on Improving the Positioning of Trial Level Functions of Four-Level Courts, launched by the SPC in September last year.

    Specifically, in article 2 of the provision, the first instance civil and administrative cases of ownership and infringement disputes of design patents are spread to all intermediate courts, in addition to the IP courts. Therefore, in the future – except in Beijing, Shanghai, Guangdong and Hainan, which already have IP courts – intermediate courts in other regions can have jurisdiction over civil and administrative cases of design patent of the first instance.

    The provision also stipulates that with the approval of the SPC the primary courts may have jurisdiction over civil cases of the first instance involving design patents. Although it is not known which primary courts will be approved, we predict that the first batch of approved primary courts will likely include the Haidian District Court in Beijing.

    The Beijing IP Court has undertaken a large number of administrative lawsuits related to appeals from re-examination decisions and/or invalidation decisions of IP rights, and the number of cases is far greater than that of other IP courts and tribunals, therefore, there is an urgent need to descend some cases to the primary courts. Second, the Haidian District Court was approved by the SPC in 2011 as a pilot court to hear utility model and design patent disputes, however, this ended with the establishment of the Beijing IP Court in 2014. Therefore, Haidian District Court has the ability to hear civil cases relating to design patents, but whether this can be realised remains to be seen.

    Article 3 of the provision points out that the first instance of IP civil and administrative cases other than those specified in articles 1 and 2 shall be under the jurisdiction of the primary courts determined by the SPC. Patent cases other than those specified in articles 1 and 2 mainly include contract disputes. Previously, patent contract disputes also needed centralised jurisdiction, but now these cases will be under the jurisdiction of the designated primary courts. The local primary courts determined by the SPC, as stipulated in this article, will be listed in detail in the supporting notice.

    It should be noted that, in addition to Beijing and Shanghai, the primary courts in other regions have a ceiling on the number of litigation objects in the jurisdiction of such cases. As different regions have different standards, it is advisable to refer to the notice for details. Cases that exceed the ceilings, as well as those involving administrative acts of departments of the State Council, local governments at or above the county level, or the customs, shall be under the jurisdiction of the intermediate courts in accordance with article 2.2 of the provision.

    The provision did not mention the standard for the high courts in various regions to exercise jurisdiction over IP cases of the first instance, because the standard has been determined in relevant provisions issued in 2017. According to the 2017 provisions – and in combination with the fact that the contract dispute cases involving invention patents and other contract disputes specified in the provision are under the jurisdiction of the primary courts – the specific standards for the high courts to have jurisdiction over the first instance IP civil and administrative cases are as follows:

    1. IP civil cases of the first instance that have a significant impact in their respective jurisdictions, and major and complex IP administrative cases of the first instance;
    2. The “seven types of cases” of the first instance with the amount of litigation object being more than RMB200 million (USD30 million) or more than RMB100 million while involving foreign affairs, Hong Kong, Macau and Taiwan, or parties not within its jurisdiction; and
    3. Other common IP civil cases with the amount of litigation object being more than RMB5 billion.

    From the above-mentioned analysis, it can be seen that in terms of patent cases, the main change of the latest jurisdiction provisions compared with the previous ones is to spread the ownership and infringement disputes of design patents to more intermediate courts, and to move contract dispute cases into the jurisdiction of primary courts.

    FURTHER DISCUSSION

    What is the impact of this change on the courts that previously had centralised jurisdiction? Will the trial cycle of these courts be greatly shortened after the number of cases is reduced?

    As far as the current situation is concerned, the provision may have a positive impact on the intermediate courts in reducing their caseloads. However, the impact on the IP courts is not significant because the ownership and infringement disputes of design patents are still under their jurisdiction, and only contract cases, which are a small proportion of total cases, are reduced.

    According to the white paper on Judicial Protection of Intellectual Property in Shanghai Intellectual Property Court (2021), issued by the Shanghai IP Court, the total number of cases accepted that year was 5,432, including 572 contract cases that accounted for 10.5%. For the Beijing IP Court, the impact of jurisdiction changes was even less.

    In 2021, the total number of cases accepted was nearly 30,000, and only about 500 of them were contract cases, accounting for about 1.7%. So, descending contract cases to primary courts will not substantially affect the caseload of each IP property court.

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