Mysteries of the newly established Intellectual Property Tribunal of the Supreme Court are unveiled at the end of year 2018. A Judicial Interpretation “Provisions Regarding Various Issues of IP Tribunal” is issued by the Supreme Court on December 27, 2018 to provide detailed regulations on the operation of the IP tribunal. A press conference is grandly held on December 29, 2018 to introduce more details of this “innovative” Intellectual Property Tribunal. 

In the conference, Judge LUO Dongchuan, the Vice President of the Supreme Court responsible for IP cases and appointed as the Chief Judge of this Intellectual Property Tribunal, explained background, significance, organization, potential issues and the future plan of this brand-new tribunal. The most important points are summarized as below to provide an in-depth understanding for this innovative reform on IP legal system in China.

Objectives of IP Tribunal

1. Unifying the criteria of IP trials, strengthening judicial protection of IP rights and enhancing quality and efficiency of IP trials
The cases related to high tech, electronics, mechanics, AI and so on are closely associated with innovation and rather complicated. Unified trial criteria are especially needed for such cases. In the current legal system, the validity of patent is reviewed by the Patent Reexamination Board in the invalidity administrative proceedings and the infringement of patent is tried by those competent infringement courts in the legal proceedings. This cause at least two problems, one is that the infringement court generally waits for the invalidity results from the PRB, prolonging the whole duration of infringement cases, the other is that there may be different criteria held by different courts on fact-finding and difficult legal issues. 
The establishment of IP tribunal in the Supreme Court is oriented to solve those issues by linking the invalidity proceeding and the infringement proceeding in the same court and directly applying the legal spirit of the Supreme Court to the patent administrative and infringement trials. China is the first country worldwide to establish IP tribunal as a standing judicial organ in the Supreme Court, showing the decisive mind of the government on IP protections.

2. Stipulating and protecting technological innovation
China is accelerating its steps to be an innovative country. Innovation is the primary driving force for social development. It is urgent to establish national-level appeal mechanism for IP cases to optimize legal environment to stipulate and protect technological innovation.

3. Creating a sound business environment
Intellectual property is a significant component to shape a sound business environment. The protection for Intellectual property of both Chinese and foreign enterprises shall be equal to promote the legal, international and convenient business environment.

Highlights of the new Judicial Interpretation “Provisions Regarding Various Issues of IP Tribunal”

This interpretation makes detailed provisions on the practical operation of the IP tribunal, which may be regarded to some degree as the US Court of Appeals for the Federal Circuit (CAFC). There are three highlights:

1. Electronical Electronic online system is used to improve the convenience and efficiency of litigation. The IP tribunal may use electronicical litigation platform and emails to serve the evidence and rulings or judgments. Information about case filing, judges to hear the case, litigation procedure and rulings or judgments are accessible via the electrical electronic litigation platform available aattsuch as https://and “splcgk.court.gov.cn”. For the parties involved in the case, court dockets are converted into electronic electronical forms and may be reviewed online. 

2. Convenience for the parties to attend litigation is especially emphasized. The electronic electronical litigation platform and online video are used for evidence exchange and pre-trial conferences, thereby parties in different cities may present and review the evidence via online video. In this way, the problem of examining large size physical evidence not easy to move can be solved. The IP tribunal also has the authority to travel to hear the case locally.

3. Cases to be accepted by the IP tribunal are the appeals against the judgments made by the court of first instance after January 1, 2019. The appeals against the judgementsjudgments made before January 1, 2019 shall still be heard by the original upper level court, i.e. local high courts (totally 32 courts). Retrial requests are still reviewed by the Third Chamber of the Supreme Court, i.e. traditional IP DivisionCourt of the Supreme Court. That is to say, there are two organs in the Supreme Court competent to hear patent disputes. One is the newly established IP Tribunal, specialized to hear appeals against the first instance judgementsjudgments. The other is the traditional IP CourtDivision, existing for years to hear retrial request against the effective second instance judgementsjudgments. The IP Tribunal and the IP DivisionCourt coexist in the Supreme Court, and the IP Court Division is the upper level court for the IP Tribunalremains the function to supervise the work of the IP Tribunal and the IP work of the other courts, and rehears IP cases from the Supreme Court IP Tribunal and the other courts.

The introduction of the first team of judges 

The appeals on patent cases are averaged about 2000 every year. Based on such case loads, 27 judges selected from such courts experienced in hearing patent cases as the Supreme Court, Patent Reexamination Board, Beijing High Court, Beijing IP Court, Shanghai IP Court, Guangzhou IP Court, Jiangsu High Court, Zhejiang High Court become the first ones in this tribunal. Some senior patent examiners are invited temporarily from China National Intellectual Property AdministrationChina Patent Office (CNIPA) for assistance on technological matters. Statistically, all these first judges are qualified as postgraduate degree, half of them even being DoctorsPhD, 1/3 of them having science background, 1/3 of them having overseas education experiences, with the average age of 42. The average working years of these judges are 12 years. 

Most of judges are rather famous in hearing patent cases: LI Jian, ZHU Li and LUO Xia from the Supreme Court, LIU Xiaojun, CEN Hongyu and JIAO Yan from Beijing High Court, DENG Zhuo and CUI Ning from Beijing IP Court, REN Xiaolan, GAO Xue and ZHAN Jingkang from PRB, XU Yanru from Zhejiang High Court, XU Zhuobin from Shanghai High Court, LING Zongliang from Shanghai IP Court, ZHANG Xiaoyang from Jiangsu High Court and SHE Chaoyang from Guangzhou IP Court. 

These judges are rather active in handling patent disputes in recent years. For example, Dr LI Jian is the main author for Patent Infringement Judicial Interpretation II (April 2016); Judge LUO Xia is the main judge for Shuanghuan Auto v. Honda with the damages of RMB 16 million, which case establishes  and the legal standard of extents of cCease and Desist desist lLetters; Judge JIAO Yan is the main judge for IWNCOMM v. Sony with the damages of RMB 9 million and injunction for SEP patent. In this situation, reviewing the precedent judgments made by these judges may give a sense of what this tribunal will show in the future.

The IP Tribunal is still open for more judges experienced in hearing patent cases. In the meantime, the IP Tribunal is also welcoming the lawyers, professors and IP professionals to attend to bring a second eye to the legal system.

Internal Organization of IP Tribunal

The concept of the internal organization of IP Tribunal is flat management and efficiency. Currently, four divisions are set up: First Trial Chamber, Second Trial Chamber, Litigation Service Center and Management Office. The First Trial Chamber is also responsible to to manage technical investigators and select the technical investigators specific for cases as well as to hear the appeal cases. The Litigation Service Center has the mission of docketing the case and managing the litigation procedure.

Measures to shorten the duration of IP trials

The duration of IP trials in China is already one of the shortest around the world. Some measures will be adopted by the IP Tribunals to further shorten the process of IP litigation. The tribunal shall differentiate complicated and difficult cases from easy cases so that easy cases will proceed much faster. Big data will be the usedapplied to assign the cases to the judges familiar with the related technology. Evidence exchange via online evidence system and AR/VR technology will be convenient for the parties to move forward the procedural matters. Moreover, the invalidity administrative appeal and the infringement civil procedure may be handled by the same team of judges, so that the infringement side does not need to take long time to wait for the final decision of invalidity side, which certainly shortens the whole patent infringement litigation cycle.

Measures to unify the trial criteria in IP Tribunal

Some measures are provided to unify the trial criteria inside the IP Tribunal of the Supreme Court. Judges Conference for Specific Case will be held for cases involving complicated and difficult legal issues or sensitive issues. The Chief Judge, Vice Chief Judge and several senior judges shall attend the conference. The most high-profile cases will be further reviewed and discussed by Trial Committee. Representative cases will be constantly chosen as Guiding cases so that the trial criteria and legal rules will be timely summarized and updated as the references for the future cases. Judges are requested to make legal research on similar precedent cases before a new judgment is made to keep the judgments on similar cases to be consistent. Similar cases or the cases related to series type of accused infringing products or the same patent will be assigned to the same team of judges to promote efficiency and guarantee consistency.

Considerations of the Supreme Court on lifting increasing damages in IP cases

The damages awarded for patent infringement cases are constantly on the rise, from 350k RMB in 2015 to 760k RMB in 2016 and to 1.35 million RMB in 2017. The Supreme Court believes that the values of IP rights are finally determined by markets, with judicial pricing being a reference. It is ideal for the market and judicial pricing to be coordinated. The Supreme Court has set up a special base in Guangzhou IP Court to study the relation between the ‘price’ of judicial protection of IP and market priceing. Moreover, as regulated in the draft amendments for Patent Law, the statutory damage limit is proposed to lift to 5 million RMB and punishment system is being incorporated for intentional and repetitive patent infringement. Evidence obstruction system is also operating to force the accused infringers to provide financial materials to support the infringement lost asserted by the Patentee.

Future plan of IP Tribunal of the Supreme Court

There are great landscapes designed for the IP Tribunal of the Supreme Court. Modern technological methods will be taken to perfect the Intelligent Court by integrating deadline managements, procedural standards, formalities of rulings and judgments into an overall information platform. Connectivity and Interchanging through trial systems, automatic data transferring and resources sharing will make the parties to attend the litigation conveniently. Training the judges to be proficient in laws, familiar with technology and endowed with international perspectives is one of the missions of IP tribunal of the Supreme Court. Fair, efficient, professional and authoritative judgments are highly expected for this tribunal. The IP Tribunal of the Supreme Court has the confidence to become a booster for technological innovation, a pioneer of the judicial reform, a first runner of patent trials and a preferred court for Patentees around the world.

Summary on IP judicial protection developing in China

IP protection is a basics strategy for China and is in conformity cooperating with the “reform and open-up policy” all along in the last 30 years. The protection of IP is the instrinct one of those requirements from “reform and open-up policy” and social economical and technological developments. China has become the the world’s second largest economy. Innovation is the primary drive for future development of China, which absolutely should be well protected judicially.

In recent five years, the reform on IP judicial system is deepening, from 3 IP specialized courts in Beijing, Shanghai and Guangzhou in 2014, to 17 IP specialized local tribunals at the end of 2018, and to the IP Tribunal of the Supreme Court in 2019, showing the upgrading resolution and strength of Chinese government to protect intellectual property. The establishment of IP Tribunal of the Supreme Court is rather revolutionary and innovative, but taking the lowest costs and risks. The establishment of IP Tribunal is definitely making should be able to make profound influences on IP judicial system. In these three years, It is said that In the following three years, the operations of this IP tribunal will be tested by the legal practice in three years, with promising results to be reported to the Standing Committee of National Congress for review. 

	Author: YAO,Guanyang
	Partner |Patent Attorney | Attorney at Law

Mr. Yao specializes in providing IP legal services. Based on the extensive experiences from patent prosecution and litigation in almost fifteen years, Mr. Yao has deep understanding on the spirit of China patent legal system. As the leading attorney, Mr. Yao has handled patent disputes for various international and domestic enterprises. Mr. Yao has the expertise to design overall litigation strategy based on specific case and also the strong ability to analyze case details for the best interests of clients. Mr. Yao is proficient in patent searching, with excellent skills in making searching strategy based on combined searching resources, establishing solid basis for the success of patent invalidation.  Mr. YAO keeps a close eye on development in IP law system in China and is active in discussing IP hot issues. Mr. Yao has published research articles on many topics on patent law.