- Judicial protection offers a relatively strong deterring effect. The authority of the court is more convincing to the general public, and most court decisions are made publically accessible. Infringers also suffer reputational damage.

- Judicial protection is complete. Besides protecting IP rights, the court also supervises enforcement by an administrative authority and holds those who commit serious IP infringement criminally liable.

- Litigation can award monetary damages. An infringement decision made by a court includes both permanent injunctions (ceasing and desisting from acts of production, manufacturing, sale and offering for sale) against an infringer and monetary damages. To arrive at a reasonable amount of damages, the court would consider the facts of the case, as well as factors including harm inflicted upon the IP owner and the infringer's gained benefits. It then makes its decision, also determining the specific amount of damages to cover the rights holder's expenses for ceasing the illicit activity, attorney's fees, and notarization fees.

Disadvantages of IP litigation

* IP disputes are lengthy. Cases can be relatively complex and take longer than ordinary civil disputes. A trademark or copyright case takes approximately six to nine months in its first instance, and a patent dispute can take six to 12 months. Complicated patent cases often take years until a decision is made from the invalidation proceedings and possible administrative lawsuit over the patentability.

* Litigation is costly. To have a case accepted by the court, a rights holder must pay a litigation fee based on the damages claimed, as well as for investigation and evidence collection. It must also bear legal fees and the travel expenses necessary to be present before the court. Moreover, as infringing acts in IP cases are often very much concealed and evidence can be difficult to obtain, applications for pre-trial injunction, evidence preservation and property preservation can also require corresponding property guaranty.

* There is a heavy burden of proof. Since IP evidence is intangible, technically complicated, and hard to identify, a plaintiff often faces a substantial burden of proof, and concealed infringement can make it challenging for an IP owner to enforce its rights.

The administrative perspective

An IP owner faces an alternative option to litigation. It can request an administrative authority to conduct an investigation. The authority may then make a decision on infringement and issue an injunction.

Article 60 of the PRC Patent Law, Article 60 of the PRC Trademark Law, and Article 48 of the PRC Copyright Law have provided for administrative protection against infringement upon patent rights, trademark rights, and copyright, respectively. The Intellectual Property Office is responsible for handling patent infringement cases, the Trademark Office for trademark cases, and the Administration of Copyright for copyright infringement. The administrative authorities are each able to order infringers to cease activity. For trademark or copyright, the relevant authority can order infringers to destroy manufacturing moulds and infringing products, for example.

Normally, patent infringement cases are under the jurisdiction of the city-level IP offices, and trademark and copyright cases are under the administration for industry and commerce (AIC) and copyright bureaus at the county/district level. However, for cases of major importance or influence, one may file a request with an administrative authority at the provincial level for handling a patent case, and with one at the city level for a trademark or copyright case. The documents and materials IP owners are required to submit are similar to when applying for judicial protection, including proofs of qualification as subject entity, proof of right, written requests, and evidence. The administrative protection procedure also involves sessions of hearings. Unlike in court litigation, evidence is not exchanged in separate sessions, but during one hearing.

Advantages of administrative protection

- Administrative procedures take less time. The time taken for handling a case is generally short, usually between four to eight months, allowing rights owners to cease infringement in a relatively fast and timely manner.

- An administrative authority can actively collect evidence. Unlike in judicial procedures, an administrative authority has the responsibility of both acting as an impartial judge and of impeding infringement and safeguarding public interest. Therefore, when evidence is difficult to collect, an administrative authority, rather than requiring rights holders to place a guaranty before doing so as the courts do, takes ex officio action.

- Enforcement by way of administrative investigation and handling is less costly. IP owners do not need to pay fees when filing complaints, nor do they need to pay a guaranty when applying for evidence preservation.

Disadvantages of administrative protection

- No damages are awarded. The laws empower administrative authorities to issue injunctions, but not to order payment of damages. However, the authorities may act as mediators on matters of amount of damages at the request of interested parties. To date, the laws tend to expand the authority of the agencies to handle infringement cases. In trademark and copyright cases, they can order the destruction of moulds and reproductions and impose penalties. And in the pending Fourth Amendment to the Patent Law submitted for review, a provision has been added to grant agencies the authority to impose fines and order infringers to destroy infringing articles and moulds.

- Decisions are not final. A party that is not satisfied with an administrative outcome may bring a case to the court. An infringer, upon receiving a decision holding it guilty, often chooses to bring a lawsuit, and the case would then fall before court proceedings, prolonging the time of hearing the case and damaging the rights of IP owners.

Which path to take

With the current two-track protection model, IP owners must consider the following factors when making a decision to protect their rights.

Goal of enforcement

If a rights holder intends to enforce its right to cease an infringement, seeking administrative protection is the better choice. If a rights holder suffers tremendous economic damage due to an infringement and must claim damages, litigation is preferable.

Type of IP rights at stake

Establishing infringement is simpler in disputes involving trademarks and copyright, and cases take less time to close. These authorities handle many cases every year and have richer experience in this aspect. For patent cases involving more complicated technology, even if requests are made for administrative treatment, a case may close until the judicial procedure is triggered and finalized. Rights holders therefore generally prefer judicial protection for patent infringement cases.

Challenges in evidence collection

Where evidence is easy to collect, IP owners may preserve it under notarization before opting for litigation. Where it is difficult to obtain, they may first pursue administrative protection, as the administrative authorities are equipped to actively collect evidence, and to even go right to the infringers' sites to conduct inspections or investigations.

Dapeng Wen and Rongxin Li
China Patent Agent (H.K.) Ltd.,
China

China adopts a two-track system for intellectual property (IP) rights protection: judicial and administrative. IP owners facing infringement may choose the appropriate option based on the specific circumstances or facts of the case to defend their lawful rights and interests.

The litigation perspective

The course of judicial IP protection is through litigation, a part of China's civil law procedure in which the courts follow the “no-action-no-trial” doctrine. When a rights holder discovers an infringer, it prepares a bill of indictment, collects relevant evidence, and files an action with the court. The court would send the infringer these materials and order it to respond in writing before a certain deadline. Following this, the court would then start the procedure to exchange evidence and to formally hear the case. Both parties may fully express their opinions and views to enable the court to sufficiently understand the facts of the case and ultimately make a decision.

The court system in China is divided into four levels: trial courts (at the county/district level); intermediate courts (at the city level); higher courts (at the provincial level); and the Supreme People's Court (SPC) (at the national level). A civil action is decided through the first and second instance hearings. When a court of first instance lands a ruling, the unsatisfied party may choose to appeal; when a court of second instance makes its decision, it is final. Also, the first-instance courts vary in levels for various types of IP cases. The higher, intermediate, and some trial courts have the jurisdiction over relatively simple trademark and copyright cases, while only the higher court, special IP courts (the Beijing, Shanghai and Guangzhou IP Courts, of which only the Guangzhou IP Court currently has cross-regional jurisdiction), and authorized intermediate courts have jurisdiction over patent cases, which involve relatively complex facts or circumstances and require comparing features based on special knowledge in the arts or sciences. Meanwhile, for complicated patent cases, the SPC is now pushing to set up special IP tribunals with jurisdiction over patent cases across certain regions. In January 2017, the SPC authorized the Chengdu, Suzhou, Nanjing and Wuhan Intermediate People's Courts to establish special IP tribunals to exercise cross-regional jurisdiction in these areas.

Advantages of IP litigation

- Court decisions are final. Decisions made by the administrative authorities are appealable.

- Judicial protection offers a relatively strong deterring effect. The authority of the court is more convincing to the general public, and most court decisions are made publically accessible. Infringers also suffer reputational damage.

- Judicial protection is complete. Besides protecting IP rights, the court also supervises enforcement by an administrative authority and holds those who commit serious IP infringement criminally liable.

- Litigation can award monetary damages. An infringement decision made by a court includes both permanent injunctions (ceasing and desisting from acts of production, manufacturing, sale and offering for sale) against an infringer and monetary damages. To arrive at a reasonable amount of damages, the court would consider the facts of the case, as well as factors including harm inflicted upon the IP owner and the infringer's gained benefits. It then makes its decision, also determining the specific amount of damages to cover the rights holder's expenses for ceasing the illicit activity, attorney's fees, and notarization fees.

Disadvantages of IP litigation

* IP disputes are lengthy. Cases can be relatively complex and take longer than ordinary civil disputes. A trademark or copyright case takes approximately six to nine months in its first instance, and a patent dispute can take six to 12 months. Complicated patent cases often take years until a decision is made from the invalidation proceedings and possible administrative lawsuit over the patentability.

* Litigation is costly. To have a case accepted by the court, a rights holder must pay a litigation fee based on the damages claimed, as well as for investigation and evidence collection. It must also bear legal fees and the travel expenses necessary to be present before the court. Moreover, as infringing acts in IP cases are often very much concealed and evidence can be difficult to obtain, applications for pre-trial injunction, evidence preservation and property preservation can also require corresponding property guaranty.

* There is a heavy burden of proof. Since IP evidence is intangible, technically complicated, and hard to identify, a plaintiff often faces a substantial burden of proof, and concealed infringement can make it challenging for an IP owner to enforce its rights.

The administrative perspective

An IP owner faces an alternative option to litigation. It can request an administrative authority to conduct an investigation. The authority may then make a decision on infringement and issue an injunction.

Article 60 of the PRC Patent Law, Article 60 of the PRC Trademark Law, and Article 48 of the PRC Copyright Law have provided for administrative protection against infringement upon patent rights, trademark rights, and copyright, respectively. The Intellectual Property Office is responsible for handling patent infringement cases, the Trademark Office for trademark cases, and the Administration of Copyright for copyright infringement. The administrative authorities are each able to order infringers to cease activity. For trademark or copyright, the relevant authority can order infringers to destroy manufacturing moulds and infringing products, for example.

Normally, patent infringement cases are under the jurisdiction of the city-level IP offices, and trademark and copyright cases are under the administration for industry and commerce (AIC) and copyright bureaus at the county/district level. However, for cases of major importance or influence, one may file a request with an administrative authority at the provincial level for handling a patent case, and with one at the city level for a trademark or copyright case. The documents and materials IP owners are required to submit are similar to when applying for judicial protection, including proofs of qualification as subject entity, proof of right, written requests, and evidence. The administrative protection procedure also involves sessions of hearings. Unlike in court litigation, evidence is not exchanged in separate sessions, but during one hearing.

Advantages of administrative protection

- Administrative procedures take less time. The time taken for handling a case is generally short, usually between four to eight months, allowing rights owners to cease infringement in a relatively fast and timely manner.

- An administrative authority can actively collect evidence. Unlike in judicial procedures, an administrative authority has the responsibility of both acting as an impartial judge and of impeding infringement and safeguarding public interest. Therefore, when evidence is difficult to collect, an administrative authority, rather than requiring rights holders to place a guaranty before doing so as the courts do, takes ex officio action.

- Enforcement by way of administrative investigation and handling is less costly. IP owners do not need to pay fees when filing complaints, nor do they need to pay a guaranty when applying for evidence preservation.

Disadvantages of administrative protection

- No damages are awarded. The laws empower administrative authorities to issue injunctions, but not to order payment of damages. However, the authorities may act as mediators on matters of amount of damages at the request of interested parties. To date, the laws tend to expand the authority of the agencies to handle infringement cases. In trademark and copyright cases, they can order the destruction of moulds and reproductions and impose penalties. And in the pending Fourth Amendment to the Patent Law submitted for review, a provision has been added to grant agencies the authority to impose fines and order infringers to destroy infringing articles and moulds.

- Decisions are not final. A party that is not satisfied with an administrative outcome may bring a case to the court. An infringer, upon receiving a decision holding it guilty, often chooses to bring a lawsuit, and the case would then fall before court proceedings, prolonging the time of hearing the case and damaging the rights of IP owners.

Which path to take

With the current two-track protection model, IP owners must consider the following factors when making a decision to protect their rights.

Goal of enforcement

If a rights holder intends to enforce its right to cease an infringement, seeking administrative protection is the better choice. If a rights holder suffers tremendous economic damage due to an infringement and must claim damages, litigation is preferable.

Type of IP rights at stake

Establishing infringement is simpler in disputes involving trademarks and copyright, and cases take less time to close. These authorities handle many cases every year and have richer experience in this aspect. For patent cases involving more complicated technology, even if requests are made for administrative treatment, a case may close until the judicial procedure is triggered and finalized. Rights holders therefore generally prefer judicial protection for patent infringement cases.

Challenges in evidence collection

Where evidence is easy to collect, IP owners may preserve it under notarization before opting for litigation. Where it is difficult to obtain, they may first pursue administrative protection, as the administrative authorities are equipped to actively collect evidence, and to even go right to the infringers' sites to conduct inspections or investigations.

Dapeng Wen and Rongxin Li
China Patent Agent (H.K.) Ltd.,
China