Court publishes opinion on implementation of National IPR Strategy

• Consistency in decision-making: The Opinion calls for the acceleration of efforts to increase the uniformity and predictability of judicial decisions through the establishment of a new stare decisis system for IP cases. As a Civil Law country, very few court decisions are binding on other courts, but the Opinion suggests that other measures may be adopted to increase consistency, including the publication of court decisions and the establishment of new appeal courts which could help centralise the adjudication for certain types of cases.

• Preliminary injunctions: The Opinion encourages courts to grant preliminary injunctions in cases involving wilful trademark infringements and copyright piracy, while exercising caution in granting preliminary injunctions in patent cases involving inventions and utility model patents. Many courts in China have to date issued preliminary injunctions only rarely, even in cases involving blatant counterfeiting.

• Administrative reviews: The Opinion indicates that the SPC will start research into transforming the Patent Re-examination Board and Trademark Review and Appeal Board into quasi-judicial bodies. The Opinion in the meantime encourages local courts to establish unified three-in-one courts which can deal with civil and criminal cases as well as administrative claims and appeals.

• Anti-trust: The IP Tribunal of the SPC is now in charge of all anti-trust cases, and the Opinion suggests that the SPC will later issue judicial interpretations and other guidance to assist local courts in handling anti-trust cases.

• Unfair competition: The Opinion encourages courts to deal more aggressively with new types of unfair competition and passing off, including those involving trade names and company names. The Opinion specifically encourages courts to apply general principles set out in the PRC Anti-unfair Competition Law to address new types of violations that are not specifically enumerated in the law, but which clearly violate generally-accepted commercial practice. At the same time, the Opinion recognises the risk of impeding free competition if the Anti-unfair Competition Law is misapplied.

• IP misuse: The Opinion encourages courts to examine more carefully defences based on prior art, prior use, the doctrine of estoppel, and fair use in order to address patent abuse. The Opinion reconfirms the power of courts to accept requests by potential defendants for non-infringement declarations and also sanctions claims for damages against plaintiffs deemed to have filed frivolous lawsuits.

• Patent litigation: The Opinion encourages local courts to strictly apply the doctrine of equivalents in patent disputes and, for those with more patent expertise, to adopt innovative ways of clarifying technical issues in the course of handling patent disputes.

• Well-known trademarks: The Opinion discourages local courts from relying on recognition of well-known trademarks to deal with disputes – a point made in another recent pronouncement by the SPC.

• Web piracy: The Opinion sets out principles to assist courts in balancing the interests of relevant parties with respect to copyright disputes involving the internet. Recognising plaintiffs' difficulties in collecting evidence of infringement on the web, the Opinion calls generally for improvements in evidentiary rules in this area.

• Trade secrets: With respect to trade secret cases, the Opinion encourages courts to give greater attention to evidentiary questions, through reasonable allocations of the burden of proof and enforcement of the duty of parties to maintain confidentiality. It also highlights the need to protect secrets owned by defendants, to prevent plaintiffs from obtaining access to protected information through misuse of their civil rights in the course of litigation.

• Jurisdiction of local courts: The Opinion proposes limiting the number of intermediate courts that can hear patent cases, and centralising the jurisdiction of courts handling anti-trust cases and those involving well-known trademarks.

(This article is part of the China IP update special feature)