Outline re Guideline on Implementing the Compendium of National Intellectual Property Strategy
Author: Ma Ning (马宁) ; Source:chinalawinfo.com
Chinese Supreme Court （"CSC"） issued Guideline on Implementing the Compendium of National Intellectual Property Strategy on March 30, 2009, which is a significant step towards implementing the Outline of the National Intellectual Property Strategy that was promulgated by the State Council on June 5, 2008. Given the current financial crisis in the world, correct understanding of this opinion provides important guidance for IPR owners to enforce their IPR in China. The highlights are summarized as follows:
1. To promote the guiding roles of IPR judgment based on China's unique conditions. This step aims to keep discretion of judges with limits and unify legal standards.
【Comments: Although China does not adopt a case law system, in judicial practice, more importance has been attached to the guidance of judgment. For instance, cases mentioned in the Supreme Court's communiqués provide important guidance to the lower courts who are dealing with or will deal with similar cases In some relatively developed regions such as Beijing, Shanghai, Jiangsu, Guangdong and Zhejiang, high courts have been constantly reviewing and unifying their regional judicial standards in IPR adjudication. This opinion implicates that more importance will be attached to the guidance of IPR cases. 】
2. To study on setting up a special IPR tribunal to deal with civil, administrative and criminal cases in connection with IPR, unify the division of work in the trials of cases concerning affirming IPR such as patent and trademark etc., conscientiously sum up the pilot schemes of recent years in which civil, administrative and criminal cases in connection with IPR were dealt with by a "unified" tribunal within a court, expand collegial panels or involve IPR civil judges to probe into the trials of criminal and administrative IPR cases, make in-depth studies to solve the problems emerging from the pilot schemes and actively and reliably propel the progress.
【Comments: The move （i.e., special tribunals will be set up to handle IPR disputes） will see complex cases relating to civil, administrative and criminal matters dealt with by a "unified" tribunal within a court, rather than spread across different ones which was repetitious, wasted procedural costs and compromised judicial efficiency. Pilot schemes for special tribunals have been running since the mid-1990s, including one high court, nine intermediate courts and 14 district courts, with the Pudong District Court in Shanghai the first in 1995.】
3. To further study the feasibility and necessity of establishing IPR appeals courts, make more effort to effectively streamline the procedure for affirming the IPR and the litigation procedure on infringement, simplify judicial remedy procedure and enhance the efficiency in making decision and judgment.
【Comment: Some disputes, especially the affirmation of patents and trademarks, feature highly specialized and sometimes international elements that are often too challenging for local courts to handle. An appellate court will unify standards in judicial practice, particularly patent infringements and the granting of trademark rights. It will also help save costs for small and medium-sized enterprises in maintaining IPR, particularly given the global financial crisis has made infringements more complex, with some enterprises being forced to cut budgets for IPR protection. Now Beijing No.1 Intermediate Court is the sole competent court to hear patent and trademark affirmation cases and we tend to believe that such appellate court would very likely be established in Beijing by CPC. The possibility of an IPR appeals court and the ability to consolidate multi-jurisdictional cases is great news for foreign right holders to enforce their IPR with less costs and time.】
4. To strictly interpreting patent claims, fully respect the publicity and delimitation functions of claims, properly handle the relationship between equivalent infringement and literal infringement, rationally identify the applicable scope of equivalent infringement, and prevent overuse of equivalent infringement.
【Comments: Although equivalent infringement is not reflected in Chinese Patent Law, it has been widely adopted in judicial practices. However, courts of various regions have difference in understanding and applying equivalent infringement, thereby affecting the stability of patents. This opinion aims at reminding lower courts to be circumspect of applying equivalent infringement.】
5. To prudently interpret judicial identification and protection of well-known trademarks on individual case basis and properly determine the cross-category protection of well-known trademarks, enhance supervision over relevant cases, properly concentrate the jurisdiction of cases concerning well-known trademark identification, and will promulgate judicial interpretation regarding the protection of well-known trademarks.
【Comments: Since well-known trademarks enjoy the advantage of cross-category protection and some local governments provide incentives to the enterprises who have been identified as well-known trademarks, some regions have seen misuses of judicial approaches to identify well-known trademarks. This opinion has clarified that it will further toughen supervision of well-known trademarks identification by lower courts.】
6. For a competition activity that is not specifically regulated by Anti-Unfair Competition Law （"AUCL"）, it can only be identified as unfair competition if such activity is not accordance with publicly recognized business standards and common understanding. In the area where there is no business standards and statutory or agreed non-competition, unfair competition shall not be made simply on the ground that such activity utilizes or damages specific competition advantage.
【Comments: This opinion provides certain guidance to correctly understand and apply the principle rule of the AUCL-"Market competitors shall not violate the principle of faithfulness and honesty".】
7. To actively initiate anti-monopoly trials. Civil litigations on monopoly acts shall be accepted pursuant to the conditions of acceptance provided in the Civil Procedure Law and the Anti-Monopoly Law. To improve study in anti-monopoly trials, conscientiously sum up trial experience, and promptly clarify judicial principles, judgment standards and operation procedures. Jurisdiction of cases concerning monopoly shall be properly concentrated.
【Since the promulgation of Anti-Monopoly Law, few civil litigations concerning anti-monopoly have involved trial procedure. The main reason is that there lack of guidance of judicial interpretation regarding relevant jurisdiction, trial procedure, burden of proof, amount of compensation, etc. This opinion is sending a message that CPC will actively conduct anti-monopoly cases studies and trials.。】
8. For trademark and copyright infringement cases, especially for intentional infringement such as counterfeiting and pirating, preliminary injunctions should be actively granted upon the plaintiff's request. In patent cases, especially for invention and utility model, preliminary injunctions should be granted prudently.
【Comments: this opinion provides an important guidance for lower courts to issue preliminary injunctions. Since preliminary injunctions will significantly affect the normal business operation of the defendant, in some regions, the plaintiffs misused this tool to attack competitors. This opinion aims to indicate the lower courts strictly applying preliminary injunctions. Given the financial crisis, this opinion is of great significance, and the proportion of granting pre-suit injunctions in patent infringement cases is expected to be lowered modestly.】
9. To intensify the judicial reexamination over affirming IPR by competent administrative authorities. The evaluation and judgment of administrative authorities on specialized technical facts shall be respected, while judicial examinations shall be independent conducted on relevant substantial conditions for granting IPR. Efforts shall be made to effectively connect the procedure for granting the IPR and the litigation procedure on infringement, so as to simplify the judicial remedy procedure and enhance the efficiency.
【Comments: Judicial examination over granting patent right and trademark right has been remaining a difficulty in trial practice. Since the court cannot directly declare the invalidity of a patent or revoke a registered trademark but can only revert it to the Trademark Review and Adjudication Board or the Patent Reexamination Board for decision, so in practice, the outstanding issue is that the procedure for the parties concerned to seek remedy is too complicated and lengthy, which is adverse to protect the interests of the parties concerned. This opinion implies that it will make further efforts to enhance the adjudication efficiency.】
10. More efforts shall be made to crack down the activities of counterfeiting registered trademarks and infringing upon copyrights. While applying principal penalties according to law, the application and enforcement of monetary penalties shall be intensified. Moreover, the ability of and the conditions for the infringer to commit a crime again shall be deprived economically by taking such measures as confiscating illegal gains and tools for crime and destroying infringing products.
【Comments: This opinion expressly signals that the criminal sanction will be intensified against IPR infringement. 】