On 26th October 2018 the sixth session of the thirteenth Standing Committee of the National People’s Congress adopted the Decision by the Standing Committee of the National People’s Congress on Several Issues Connected with Proceedings in Patent and Other Intellectual Property Cases (“Decision”). The Decision mainly deals with the national appeal system for intellectual property cases and provides that the Supreme People’s Court is responsible for hearing and deciding appeal cases relating to intellectual property rights such as patents heard and decided by an intellectual property court or an intermediate court as the court of first instance.

1. The Decision sets out the plan to establish the national judicial system for appeal cases relating to intellectual property rights, in which appeal cases relating to patents, etc. should be heard and decided by the Supreme People’s Court.

This Decision was taken in the background of the Opinions on Several Issues Connected with Promotion of Reform and Innovation of the Intellectual Property Right Case Hearing System, which mentions “study and establishment of the national judicial system for appeal cases relating to intellectual property rights”. Accordingly, under leadership of the Supreme People’s Court and based on legal practice in the intellectual property area, it was decided to establish the intellectual property court of the Supreme People’s Court and reform judicial systems for appeal cases relating to patents, etc.  

Appeals against verdict or decision by a court of first instance in a civil or administrative case relating to an area of expertise such as intellectual property rights including invention, utility model, new variety of plants, integrated circuit layout and design, know-how, software, monopoly, etc. should appeal to the Supreme People’s Court during the statutory limited period.

The Decision further states that appeals or counterclaims against verdict, decision or mediation in force of a court of first instance to which trial and supervision procedures apply should be heard and decided by the Supreme People’s Court or a lower court legally instructed by the Supreme People’s Court.

2. Changes in the appeal system for patent and other cases after the intellectual property court of the supreme court is established

Intellectual property cases in China are classified as patent, trademark, copyright, new variety of plants, integrated circuit layout and design, know-how, monopoly, etc. cases. Patents are classified as inventions, utility models and designs. The Decision mainly deals with appeal cases relating to technology such as inventions and utility models, which involve expertise closely connected with technological innovation and are more difficult to hear and decide. Local higher court judges of mixed abilities hear and decide a case in very different ways. Making the supreme court responsible for this kind of cases can help to solve problems in the system such as use of different decision making standards in the same type of cases that obstruct technological innovation. Taking into consideration the functions, structure and personnel of Chinese courts and the classification, characteristics, number of intellectual property cases, making the supreme court responsible for hearing and deciding this kind of appeal cases can help to increase the quality and efficiency of dealing with intellectual property cases. Please note that civil cases involving a design, including infringement, designer’s name right, compensation and award, ownership, contract cases and civil infringement cases involving trade secrets are excluded from the scope of the reform this time.

Pursuant to Article Three of the Decision, appeals or counterclaims against verdict, decision or mediation in force of a court of first instance to which trial and supervision procedures apply should heard and decided by the Supreme People’s Court or a lower court legally instructed by the Supreme People’s Court. This suggests that the Decision has changed the authority in charge of appeals to the extent that appeals or counterclaims against verdict, decision or mediation in force of a court of first instance to which trial and supervision procedures apply should be heard and decided by the Supreme People’s Court. This change is made to prevent people from choosing the authority in charge by intentionally not appealing.

By current laws intermediate courts are courts of first instance in civil and administrative cases relating to an area of expertise such as patents. There are three intellectual property courts in Beijing, Shanghai and Guangzhou and other fifteen ones in Shenzhen, Nanjing, Wuhan, Qingdao, Hangzhou, etc., forming a structure of “3+15” legal authorities that protect intellectual property rights. This “3+15” structure mainly works as courts of first instance. Appeals against an intermediate court’s decision should be heard and decided by the higher court of the local area. After the founding of the intellectual property court of the Supreme People’s Court mainly responsible for hearing and deciding appeal cases relating to patents, etc., appeals against an intellectual property court’s or an intermediate court’s decision in the “3+15” structure are no longer heard and decided by the higher court in the local area.

The Explanation of the Decision (Draft) on Several Issues Connected with Proceedings in Patent and Other Cases contains the statement by Zhou Qiang, head of the Supreme People’s Court that in copyright, trademark, etc. cases appeals against verdict or decision of an intellectual property court in Beijing, Shanghai or Guangzhou should be heard and decided by the higher court of the local area.

3. After the intellectual property court of the supreme court is established

The reform of the trial system for intellectual property cases in China has been making progress since the Outline of the National Intellectual Property Strategy was promulgated in 2008. The “3+15” structure is a great accomplishment made in a phase of implementing the national intellectual property strategy. The intellectual property court in Beijing, for example, had received 44 thousand cases in total by the first half of 2018, of which 33 thousand ones have been closed, with an average of 10 thousand cases closed every year. The number of cases closed over the last three years increased from 5432 in 2015 to 12795 in 2017 to make a 135% increase. The biggest challenge the intellectual property court of the supreme court will face is a huge number of cases ahead as it will be responsible for hearing all appeal cases relating to patents all over the country. How many courts and judges will be allocated by the supreme court this time and who will be responsible for hearing and deciding these cases will have a great effect on how it will work in the future.

The Decision will take effect from January 1st, 2019, only two months away. Issues such as authority over the intellectual property court are to be clarified by the Supreme People’s Court issuing specific legal interpretations containing case classification standards, appeal requirements, judicial procedures and establishment of the intellectual property trial supervision court.  

You can tell that making the supreme court responsible for hearing all appeal cases relating to intellectual property rights such as patents in areas of expertise can help to set definite standards for deciding intellectual property cases and protect intellectual property rights. I believe it also helpful to relieve the burdens on appellants. The intellectual property court of the Supreme People’s Court, not local higher courts is responsible for hearing and deciding appeal cases, making proceedings much more efficient and authoritative.   

If the “3+15” structure represented a milestone in development of the judicial system for intellectual property cases, establishment of the national appeal system for intellectual property cases - the intellectual property court of the Supreme People’s Court is a great step to improve the Chinese judicial system for intellectual property cases.