Opinion on Several Issues Concerning the Serving of the Main Objective When Handling Intellectual Property Trials in View of the Current Economic Situation

(Issued by the Supreme People's Court on April 21 2009.)

Fa Fa [2009] No.23

At present, China's economy is continuing to grow in a stable and relatively rapid manner, reform and opening to the outside world are being carried out further, social undertakings are developing at an accelerated pace and people's livelihoods are further improving; however, we are also concurrently facing serious difficulties and challenges. With a view to intensifying the instillation of the spirit of the “two meetings”, implementing the state's intellectual property strategy, causing intellectual property trials to better serve in effectively countering the shocks brought on by the international financial crisis, promoting stable and relatively rapid economic development as the main objective and more actively contributing to “maintaining growth, protecting people's livelihoods and maintaining stability”, we hereby put forward the following opinions on several issues on the proper handling of intellectual property trial work by people's courts in view of the current economic situation:

I. Grounding in reality, emphasising the importance and striving to enhance the specificity and effectiveness in serving the main objective when handling intellectual property trials

1. Being fully aware of the importance of intellectual property protection in promoting stable and relatively rapid economic development, and duly strengthening the sense of mission in serving the main objective: intellectual property is the concentrated manifestation of the capabilities and level of a nation's scientific and technological innovation, is a strategic resource in a nation's development and is a central factor in enhancing international competitiveness. Stripped to the barest essentials, economic competition in the modern world is intellectual property competition. Strengthening of intellectual property protection and enhancing the creation, application and level of management of intellectual property are of great significance in accelerating the adjustment of the economic structure, transforming the development model, promoting indigenous innovation, intensifying reform, enhancing the level of openness to the outside world and, thereby, maintaining stable and relatively rapid economic development. Historical experience tells us that economic crises are often accompanied by scientific and technological revolutions, and such scientific and technological revolutions then become a key engine driving the next round of economic growth and prosperity. Strengthening intellectual property protection in view of the current economic situation has a major role to play in effectively spurring scientific and technological innovation and a scientific and technological revolution, engendering new industries, creating new market demand, fostering new engines of economic growth and steering economic development in new directions.

2. Paying close attention to new demands in respect of intellectual property trials engendered by changes in the international and domestic economic situations, and duly enhancing the specificity, effectiveness and initiative in serving the main objective: the current economic situation has generated new and more demanding requirements and expectations in respect of intellectual property trials. Judicial protection of intellectual property can only be strengthened and enhanced, never weakened or relaxed. Courts at every level must strengthen their consciousness of the crisis, hardships, the macro level and the main objective, and pay greater attention to expanding the innovation space, promoting the fostering of indigenous intellectual property, indigenous brands and new engines of economic growth, strengthening the market competitiveness of enterprises and enhancing the nation's core competitiveness; and pay greater attention to the creation of open and liberal trading and investment environments, regulating market order, safeguarding fair competition, improving the socialist market economy system, vigorously promoting the establishment of a trust-based society and bringing the unique functions of intellectual property trials to their fullness in meeting challenges and turning crisis into opportunity.

II. Intensifying patent protection, putting effort in to promoting scientific and technological innovation capabilities and expanding the innovation space, and actively spurring indigenous innovation

3. Treating implementation of the revised Patent Law as an opportunity to place strong emphasis on patent trial work and comprehensively enhancing patent trial standards: as scientific and technological innovation achievements that have patents at their core constitute an enterprise's and a nation's core competitiveness, strengthening the protection of patents is the most direct and most important means of promoting scientific and technological progress and indigenous innovation. Relevant courts are asked to treat as a key task increasing their sense of responsibility and sense of mission toward innovation capabilities and creating an innovative nation, attaching great importance to the trial of patent cases and enhancing patent trial standards. Courts are to have a profound understanding and correctly grasp the legislative purpose and spirit of the Patent Law, strengthen their investigation and research, and promptly uncover new circumstances and resolve new issues so as to ensure the correct and thorough implementation of the revised Patent Law.

4. Having an accurate understanding of judicial policy on patents, and duly strengthening patent protection: the scope and intensity of judicial protection of patents is to be rationally determined in accordance with the law, in line with China's national circumstances and based on the stage of scientific and technological development and industrial intellectual property protection policy in China so as to not only motivate enterprises to invest and innovate, give individuals the enthusiasm for creation and cause society to brim over with creative energy, but also to avoid patents becoming an obstacle to technological progress and a tool wielded to unfairly strike against competitors; so as to not only fully mobilise and allocate the entire society's capital and technology resources, but also to accelerate the dissemination and use of technological information. Patent infringement determination principles and methods are to be accurately applied, trial experience further distilled and rules for the interpretation of claims and judgment standards for infringement comparisons improved. To correctly interpret claims for invention and utility model patents and accurately define the scope of patent protection, the scope of patent protection may neither be restricted in a simple manner to the strict literal meaning of the claims nor may the claims be treated as technical guidelines to which free rein can be given, but rather, by taking a stance midway between the foregoing two extreme positions, the interpretation of claims should not only give fair protection to patentees but also ensure that the public is given reasonable legal stability. All technical characteristics included in independent claims are to be included among the technical characteristics that are subject to comparison. If a rights holder has made a substantive surrender or restriction in the course of a patent grant or confirmation procedure, it shall be prohibited from reneging thereon in an infringement action and may not reintroduce the relevant technical content into the scope of protection. The conditions for the application of the doctrine of equivalents in infringement are to be strictly observed and ways to improve the rules for the application of the doctrine of equivalents in infringement explored so as to prevent inappropriate broadening of the scope of protection. Grounds for a defence of non-infringement and grounds for a defence against liability for infringement are to be carefully examined in accordance with the law, priority rationally determined and defences of prior art upheld in accordance with the law.

III. Strengthening protection of commercial marks, actively promoting the development of a brand economy, regulating market order and safeguarding fair competition

5. Fully appreciating the market value of famous brands, and strengthening the protection of well-known brands in accordance with the law: a famous brand solidifies an enterprise's competitive advantages, is a weapon wielded by it in competition on the domestic and international markets and represents its core economic competitiveness, is an enterprise's and the state's strategic asset and is a major factor in steering the direction of market consumption. People's courts are to provide a harmonious and liberal legal environment for the creation and development of famous brands, promote the development of a brand economy, stimulate and create consumer demand, fuel economic growth and strengthen the domestic and international competitiveness of Chinese enterprises through strengthening trademark protection and halting unfair competition in accordance with the law.

6. Improving judicial policy toward trademarks, strengthening trademark protection and promoting the fostering of indigenous brands: correctly understanding the exclusive nature of trademark rights and rationally defining the scope of rights; not only ensure the rational use of trademark resources but also safeguard fair competition; not only strengthen protection of the core sector of exclusive use of trademarks based on goods for which use is approved and trademarks whose use is approved, but also rationally define the scope of exclusivity of trademark rights by taking market confusion as the benchmark, so as to ensure that, in the use of trademarks, business operators maintain clear boundaries, thereby providing sufficient legal space for the creation and development of indigenous brands. When determining whether infringement has occurred when, without a licence from the trademark registrant, a trademark identical to the registered trademark of such registrant is used on identical goods, the factor of confusion need not be considered, except where legitimate and reasonable use is constituted. When determining whether goods are similar and trademarks are similar, consideration is to be given to the distinctiveness and market notoriety of the registered trademark for which protection is claimed, and the more distinctive and the higher the market notoriety of such registered trademark, the wider the scope and the greater the intensity of the protection accorded it is to be, so as to incentivise the leaders in market competition, purge the market environment and put a halt to unscrupulous piggybacking and imitation.

7. Duly handling the relationship between the actual use of registered trademarks and the bearing of civil liability so as to cause the bearing of civil liability to be conducive to encouraging the use of trademarks, activating trademark resources and preventing the use of registered trademarks to seek illegitimate gains through deception: if a registered trademark for which protection is claimed has not actually been used commercially, an injunction to desist from infringement may be used as the principal method of protection when determining civil liability and, when determining damages, the fact that the trademark was not actually used may be taken into account and, if there were no actual losses or damage other than the reasonable expenses incurred to protect the rights, in general, the compensation is not to be determined based on the profits derived by the alleged infringer. If the registrant or transferee had no intention to actually use the registered trademark, simply using it as an instrument to lodge claims, compensation may be denied. If the registered trademark has not been used for three years in succession as specified in the Trademark Law, a claim for damages may be rejected.

8. Strengthening the monitoring of examinations for the judicial recognition of well-known trademarks and improving the system for the judicial protection of well-known trademarks so as to ensure the authoritativeness and credibility of judicial protection: the scope of, and conditions for, recognition of well-known trademarks are to be tightly grasped, and expansion of the scope of, and lowering of the conditions for, recognition are strictly prohibited. Wherever the fact of a trademark being well-known or not is not crucial to the determination of the alleged infringement, the recognition of whether a trademark is well-known shall not be carried out. Wherever a registered trademark can be accorded protection within the recognised scope of similar goods, it need not be recognised as a well-known trademark. With respect to well-known trademarks that genuinely satisfy legal requirements in respect thereof, the intensity of protection is to be stepped up, infringement that damages or weakens them is to be resolutely halted and the brand value of such well-known trademarks is to be safeguarded in accordance with the law. The Supreme People's Court, Circular on the Issue of Jurisdiction in Civil Disputes Involving the Recognition of Well-Known Trademarks (Fa [2009] No.1) is to be duly implemented and all such cases that have been accepted since the issuance of the Circular by courts without jurisdiction are be transferred to a competent court for trial. In such cases accepted before the issuance of the Circular but still pending, the pre-trial review system is to be strictly complied with. Courts at every level shall strengthen the evaluation and trial monitoring of cases that recognised well-known trademarks, and all cases in which recognition as a well-known trademark has been fraudulently obtained through the fabrication of evidence or in which recognition was obtained through another violation of the law are to be rectified by means of the trial monitoring procedure. If a party has obstructed civil procedure in a case involving the recognition of a well-known trademark, it is to be sanctioned in accordance with the law. A competent court shall actively accept monitoring by all interested parties of its judicial recognition of well-known trademarks, and if a problem is discovered, it must promptly resolve the same. After judicial interpretations on the judicial protection of well-known trademarks are promulgated and implemented, courts at each level are to duly implement the same so as to further standardise the judicial protection of well-known trademarks.

9. Strengthening the work associated with the trial of cases involving the granting and confirmation of trademark rights and correctly handling the relationship between the protection of trademark rights and safeguarding market order: not only is the illegitimate pirate registration of the prior trademark of another to be effectively halted and the protection of prior trademarks with a substantial degree of notoriety to be strengthened, but also the relative nature of trademark rights is to be accurately understood so that cross-class protection is not casually accorded to registered trademarks that are not well-known. Public grounds and private grounds for the cancellation of registered trademarks are to be accurately distinguished so as to prevent the improper expansion of the scope for the cancellation of registered trademarks and avoid casual decision in the cancellation of well-known trademarks. A registered trademark that has been used for a relatively long period of time, that has established a relatively good market reputation and that has given rise to its own relevant public may not be cancelled lightly. Rather, while protecting prior rights in accordance with the law, the market reality that the relevant public has, objectively, distinguished the relevant trademarks is to be respected. The legislative ideal of the Trademark Law of harmonising the protection of prior rights and safeguarding market order is to be grasped and attention is to be paid to safeguarding the market order that has arisen and stabilised so as to prevent concerned parties from utilising the trademark dispute system to illegitimately profit through deception or force and avoid causing material difficulties in the normal operations of enterprises due to the casual cancellation of registered trademarks. Where a registered trademark conflicts with prior property rights of another such as copyright and enterprise name right but cannot be cancelled due to the fact that the time limit for disputes as specified in the Trademark Law has expired, the holder of prior rights may nevertheless institute a civil action for infringement within the period of prescription, but the people's court may not render a judgment ordering that civil liability be borne by halting use of the relevant registered trademark.

10. Duly handling conflicts between prior rights and registered trademarks or enterprise names, and halting in accordance with the law acts of unfair competition, such as “leaning on a famous brand”: so long as a civil dispute involving a conflict between prior rights and a registered trademark or enterprise name, including disputes in which the defendant has, in the course of actual use, modified a registered trademark or used a registered trademark outside the scope of the goods for which it was approved, in addition to civil disputes involving conflicts in the rights in registered trademarks, is a dispute of civil rights and interests and satisfies the conditions for acceptance specified in the Civil Procedure Law, the people's court shall accept the same. The fact that an alleged infringing trademark has not been registered at the time that the people's court accepts a case will not prevent the people's court from accepting and trying such case in accordance with the law. Even though the alleged infringing trademark in a case may be a registered trademark, the people's court shall accept the case in accordance with the law if the alleged infringement is the reproduction, imitation or translation of a prior well-known trademark.

Trying in accordance with the law such rights conflict cases in line with the principles of good faith, safeguarding fair competition and protecting prior rights: if a lawful form, such as business registration, exists, but, in substance, trademark infringement or an act of unfair competition is constituted, neither shall administrative handling be a precondition to, nor shall proceedings be suspended due to administrative handling when, determining in accordance with the law whether trademark infringement or unfair competition is constituted. Notwithstanding the procedure by which a commercial mark, such as an enterprise name, is obtained outside China complying with the laws of the relevant country, if the use of such mark in China violates PRC law and disturbs the economic order in the China market, use thereof is to be determined to constitute trademark infringement or unfair competition in accordance with PRC law and in line with the principles of the independence and territorial nature of intellectual property. If the exclusive right to use a prior registered trademark is infringed due to the prominent use of an enterprise name, the case is to be handled as one of trademark infringement in accordance with the law; if the enterprise name has not been prominently used but its use is nonetheless sufficient to cause market confusion and violate fair competition, the case is to be handled as one of unfair competition in accordance with the law. If a conflict in the rights in a registered trademark and an enterprise name arises due to historical reasons and the concerned party did not act in bad faith, the conflict shall be resolved fairly and reasonably, based on the specific circumstances of the case and on consideration of the historical factors and current status of use, without simply determining that trademark infringement or unfair competition is constituted. In disputes involving commercial marks, such as old trade names, to which title is clear, history is to be respected and the legal order that has arisen is to be safeguarded. If the trade name portion of an enterprise name or an abbreviation of an enterprise or an enterprise name has a substantial degree of notoriety in the market, is well-known to the relevant public and functions de facto as a trade name, it is to be treated as an enterprise name and accorded protection by halting unfair competition. If the use of an enterprise name constitutes trademark infringement, a ruling ordering that use of such enterprise name cease may be rendered or restrictions placed on the method and/or scope of use of such enterprise name, depending on the specific circumstances of the case. The improper use in an enterprise name of another's registered trademark that has a relatively high degree of notoriety is liable to cause confusion in the market regardless of whether it is prominently used or not; accordingly a judgment is to be rendered pursuant to the concerned party's petition, ordering that use of such enterprise name cease or that such enterprise name be changed. If a judgment ordering that use of such enterprise name cease is rendered and the concerned party refuses to comply, the intensity of enforcement and corresponding damages and relief is to be increased.

11. Strengthening unfair competition and anti-monopoly trials, comprehensively considering the relationship between free competition and fair competition, and actively promoting enhancement of the market structure and soundness of the socialist market economy system: the relationship between patent, trademark, copyright and other such dedicated intellectual property rights laws and the Anti-unfair Competition Law is to be duly handled. The supplementary protection accorded by the Anti-unfair Competition Law may not run counter to the legislative policy of dedicated laws. In principle, where a dedicated law has fully provided for matters, the Anti-unfair Competition Law is not to be used to broaden protection. In general, the scope of protection of acts that, in the special provisions of the Anti-unfair Competition Law, are accorded exhaustive protection may not be broadened by referring to the provisions on principles of said Law. Competitive acts that are not specifically addressed in the Anti-unfair Competition Law may be determined to constitute acts of unfair competition only if they can be determined to violate its provisions on principles based on generally recognised commercial standards and common sense, so as to prevent inappropriate expansion of the scope of unfair competition and thus hinder free and fair competition. The relationship between the protection of trade secrets and free choice of profession, anti-compete restrictions on persons who have or had access to secrets and the rational movement of skilled personnel is to be duly handled so as to safeguard the lawful rights and interests of workers in respect of legitimate employment and establishment of businesses. A high degree of importance is to be attached to the implementation of the Anti-monopoly Law, and various types of monopoly disputes are to be duly tried in accordance with the law so as to put a halt to monopolistic acts, safeguard fair competition and provide a free and liberal environment for enterprises to establish and grow their businesses.

IV. Enhancing the intellectual property litigation system, putting effort into improving the trade and investment environments and actively spurring enhancement of the level of openness to the outside world

12. Strengthening the right to sue and facilitating litigation channels: protection of the right to sue is to be strengthened in accordance with the law and all suits that satisfy acceptance conditions shall be accepted in a timely manner. Any lawyer who has been expressly authorised by a rights holder to institute a legal action on its behalf may institute a legal action in the name of the rights holder. Furthermore, taking into consideration the realities of protection of their rights by parties located overseas, overly strict demands are not be placed on rights holders located overseas affixing their signatures/stamps to their complaints. While taking into consideration the realities of intellectual property trials, the various litigation systems are to be improved, relief procedures are to be simplified, various measures to make matters more convenient for the public are to be actively implemented and the effectiveness of judicial relief is to be strengthened.

13. Enhancing the litigation system for confirmation of non-infringement and halting the abuse of intellectual property so as to provide a safe and liberal judicial environment for trade and investment: exploration and improvement of the litigation system for the confirmation of non-infringement in the intellectual property sector is to be continued so that its role in maintaining the safety of investment and business activities can be fully brought to bear. Where an intellectual property rights holder issues an infringement warning to a specific entity but fails to institute a legal action in accordance with the law within a reasonable period of time, the party that was warned may institute a legal action for confirmation of non-infringement. In addition to these circumstances, where a party that is carrying out or is about to carry out a business activity, such as investing in and establishing a plant, receives a warning or threat concerning infringement of a patent etc. from an intellectual property rights holder by other means and such party, on its own initiative, requests that the rights holder confirm that its acts do not constitute infringement and provides in a reasonable manner the data and information required for such confirmation, but the rights holder fails to give a response within a reasonable period of time or refuses to give confirmation, the party may institute a legal action for confirmation of non-infringement. The issue of the trial of legal actions for the confirmation of non-infringement of trade secrets is to be explored so as to not only protect the lawful rights and interests and the safety of the investments of plaintiffs, but also to prevent plaintiffs from abusing their right to sue in order to obtain the trade secrets of others.

14. Strictly grasping legal conditions, and prudent use of pre-trial injunctions to desist from infringement: the issuance of pre-trial injunctions to desist from infringement is to be done both actively and prudently, both reasonably and effectively, and the relationship between the effective halting of infringement and safeguarding of the normal operations of enterprises is to be duly handled. Pre-trial injunctions to desist from infringement are to be mainly applied in cases where the facts are relatively clear and infringement easy to determine, and the standard for appropriate strictness for grasping and determining the probability of infringement is required to essentially attain the level of certainty. When determining whether the petitioner would incur irreparable damage, emphasis shall be placed on whether the relevant damage can be made up by monetary compensation and whether there is a reasonable prospect of enforceability. Determination of the amount of security is to be both reasonable and effective, and primary consideration is to be given to the losses that the respondent could incur after implementation of the injunction; additionally, reference may be made to the amount claimed by the petitioner. A defence of public interest made by a respondent is to be stringently examined and, in general, is only to be considered where public health, environmental protection or other material public interest is involved. As a pre-trial injunction to desist from infringement has a bearing on the material economic interests and market prospects of a party, attention is to be paid to preventing and restraining a concerned party from abusing relevant rights. The existence of the accused enterprise shall be taken into consideration and the taking of inappropriate measures guarded against so as not to cause difficulties in the accused enterprise's production and other business. In particular, in patent infringement cases where the act of the respondent does not constitute literal infringement and further trial involving more complex technical comparisons is required before a determination can be rendered, a ruling granting a pre-trial injunction to desist from patent infringement should not be rendered. Where a respondent has instituted in accordance with the law a separate legal action for confirmation of non-infringement or has petitioned to have the patent in question declared invalid, the facts and grounds asserted by the respondent are to be examined and a ruling to take relevant measures is to be rendered prudently. Based on the development of a case, attention is to be given to rendering a ruling lifting an injunction at the appropriate time in accordance with the law. Relief to parties injured by erroneous applications for pre-trial injunctions to desist from infringement is to be strengthened and where a petitioner has failed to institute a legal action within the statutory time limit or erroneous application has been constituted de facto and the injured party institutes a legal action for damages, the injured party shall be awarded the full damages due it. Where a pre-trial injunction to desist from infringement is applied for in bad faith with the objective of precluding a material business activity, such as the launching of a new product, by another, thereby causing serious damage to the other's market interests, attention is to be paid to according sufficient protection to the injured party.

15. Fully taking advantage of the effect of the remedy of halting infringement and duly applying liability to halt infringement so as to effectively halt infringement: the concerned party may be expressly ordered to destroy the materials, tools, etc. used exclusively in the manufacture of infringing products pursuant to the claims of the concerned party and based on the specific circumstances of the case and the actual need to halt the infringement. However, the precondition to taking such a measure shall be genuine necessity, and the measure shall be consistent with the seriousness of the infringement and may not cause unnecessary losses. If halting of the relevant act would cause a major imbalance in the interests of the parties, or would run counter to the public interest or is in fact unenforceable, interests can be weighed based on the specific circumstances of the case and, rather than rendering a judgment ordering a halt to the act, the dispute may be resolved by taking substitute measures such as greater damages or economic compensation. Where a rights holder has tolerated infringement for a long period of time or has been negligent in the protection of its rights, if, at the time it petitions for halting of the infringement, ordering such a halt would cause a relatively large imbalance in the interests of the parties, careful consideration may be given to not ordering a halt to the act. Doing so, however, will not prejudice the awarding of reasonable compensation in accordance with the law.

16. Strengthening the compensatory, penal and deterrent effects of damages so as to reduce the costs of rights protection and increase the costs of infringement: when determining damages, evidence rules are to be used adroitly, the evidence used to calculate the measure of damages is to be reviewed in a comprehensive and objective manner, logical deduction and daily life experience is to be fully applied when comprehensively examining and determining the truthfulness, lawfulness and probative force of relevant evidence, and the highest evidence standards are to be adopted when determining the facts for the damages. Parties are to be actively steered toward opting for the method of calculating damages based on the losses incurred due to the infringement or on the profits derived from the infringement and, to the extent possible, simple application of the statutory damages method is to be avoided. Where the specific amount of the losses incurred due to the infringement or the profits derived from the infringement is difficult to establish but there is evidence showing that the aforementioned amount is clearly greater than the maximum limit of statutory damages, the measure of damages shall be set at a reasonable amount above the maximum statutory limit by comprehensively considering all of the evidence in the case. Unless otherwise provided in law, when applying statutory damages, the reasonable costs incurred in protecting the rights shall be calculated and compensated separately. When applying statutory damages, the various factors actually considered in arriving at the figure are to be explained in the greatest detail and as specifically as possible so that the damages ultimately arrived at are reasonable and credible. Reasonable basis or grounds are needed if the amount of the profits derived from the infringement are deduced on the basis of the rights holder's claims and the fact that the defendant refused to provide without a legitimate reason evidence in its possession, and the amount determined is to be consistent with the circumstances, reasonable and fully convincing. Attention is to be paid to referencing the comparability of royalties at the time damages are calculated, full consideration is to be given to the differences in the working of a normal licence and the commitment of infringement in terms of the method of such working/commitment, time, scale, etc. and the idea that damages should be appropriately higher than normal royalties is to be manifested. Attention is to be paid to leveraging the auxiliary role of auditing, accounting and other such professionals in determining damages and parties are to be guided in relying on professionals to assist in calculation, explanation and cross-examination. The issue of professional appraisals for intellectual property damages is to be actively explored and, when the conditions are ripe, a mechanism for the determination of damages based on professional appraisals by professional firms is to be appropriately introduced.

17. Paying attention to the study of new intellectual property issues in the economic sector and actively promoting the establishment of bases for the invigoration of trade through science and technology and service outsourcing bases:

the investigation and study of intellectual property protection issues involved in the establishment of bases for the invigoration of trade through science and technology and service outsourcing bases is to be strengthened and judicial protection of relevant intellectual property is to be strengthened in a targeted manner with a view to providing a fine legal environment for promoting the establishment of bases for the invigoration of trade through science and technology and service outsourcing bases. The intensity of intellectual property protection in high and new technology sectors such as information technology, software, pharmaceuticals, new materials, aviation and aerospace, and fine chemicals is to be stepped up so as to actively promote the establishment of bases for the invigoration of trade through science and technology. High-tech enterprises are to be guided in further strengthening their indigenous innovation capabilities and owning their own intellectual property, and vigorous support is to be given to the export of high and new technology products incorporating indigenous brands and indigenous intellectual property so as to further enhance the competitiveness of exports on the international market. Intensive study of intellectual property legal issues involved in service outsourcing is to be undertaken so as to promote the establishment of service outsourcing bases. Service outsourcing enterprises are to be guided in creating an awareness of intellectual property protection and establishing sound enterprise intellectual property protection systems through judicial judgments and rulings so as to enhance the competitiveness of their outsourcing services.

18. Enhancing judicial policy on the processing trade so as to promote its healthy development: careful study of intellectual property protection issues involved in the processing trade is to be undertaken, trial experience in intellectual property cases involving the processing trade is to be distilled and utilised to resolve prominent issues therein and judicial protection policy is to be enhanced so as to promote the transformation and upgrading of the processing trade. The numerous trademark infringement disputes that have arisen in foreign trade “OEM processing” at present are to be duly handled, and where trademark infringement is constituted, the bearing of liability for infringement shall be rationally determined by considering whether the processor fulfilled its necessary obligation of due examination and care.

19. Adhering to the principle of equal protection and resolutely opposing any form of protectionism: cases are to be strictly handled in accordance with the law, equal protection is to be accorded to the rights and interests of local and non-local parties, and Chinese and foreign parties, and local protection and departmental protection is be resolutely halted so as to promote uniform liberalisation in the domestic market, enhance the investment environment and strengthen investment confidence, enhance international reputation and create a favourable image, and increase the level of openness toward the outside world. The overall domestic and international situation is to be comprehensively considered, major intellectual property disputes relating to trade are to be duly handled, and service is to be actively rendered toward the overall utilisation of the domestic and international markets and their resources so as to not only ensure observance of relevant international conventions and international practice and promote international economic and trade co-operation, but also to consistently pay attention to safeguarding state interests and economic security, incentivise and promote indigenous innovation and enhance China's overall intellectual property capabilities and international competitiveness. The relationship between foreign relations and the specific trial of cases is to be correctly handled and all cases, whether ordinary foreign-related cases or sensitive cases that have drawn international attention, are to be strictly handled in accordance with the law. The impartial administration of justice may not be sacrificed in order to blindly cater to partisan public opinion.

20. Strengthening the co-ordination and guidance of similar cases and related cases, standardising judicial acts and maintaining a uniform rule of law: the investigation and research of and vocational guidance in similar cases is to be strengthened, effort expended in judicial interpretations is to be intensified, judicial policy is be improved and a system of guidance through the use of typical precedents is to be actively promoted so as to continuously clarify and improve law application standards. The mechanism for restraining and standardising the exercise of discretion by judges is to be strengthened and the criteria for the appropriate exercise of discretion are to be more finely detailed. Instance monitoring is to be strengthened in cases where the legal issues addressed are identical but the judicial determinations are inconsistent so as to fully take advantage of the role of appeals and retrials in correcting errors. Co-ordination of and guidance in related cases is to be intensified and the mechanism for co-ordinating the handling of such cases is to be improved. Where related cases that involve the same legal facts or the same legal relationship need to be transferred, jurisdiction thereof shall be transferred and trial thereof consolidated in accordance with the law. The system for communication between courts trying related cases and the system for requesting co-ordination and guidance by a common higher-level court are to be enhanced. The court that was the later in accepting a case shall actively take the initiative in strengthening communication and timely request co-ordination by the higher-level court so as to avoid the rendering of mutually conflicting judgments.