Wang Chuang, vice president of the IP court at the Supreme People’s Court, has emphasised the need for all Chinese courts to focus on increasing punitive damages as a priority.
Speaking at the China IP Forum in Beijing last month, he looked back on the progress made by the SPC in the past year and the work that still needs to be done.
The SPC established an appellate-level IP court on January 1 2019 and heard its first case in March 2019.
“One of the key goals is to create a unified court,” said Wang. “It means that appeals for civil and administrative IP cases from 32 high courts and 44 intermediate courts from across the country can be handled by this appellate court. It aims to provide consistency and efficiency for appeal cases.”
He added that the creation of the IP court can help to strengthen the credibility and impact of China’s court cases at an international level.
Another objective is to provide a better balance of IP-related decisions with those from other areas of law, especially antitrust. This can ensure that the need for innovation and market competition can both be maintained.
Furthermore, the IP court is combining administrative and civil cases to increase consistency in decisions. This was exemplified in the December 2019 patent infringement and invalidation case involving Xiamen Power E Technology and LG Electronics (Tianjin) in which the SPC made a combined administrative and civil case ruling. Wang said this approach will be further explored in the year to come.
Crunching the numbers
At a national level, in 2019, 420,808 IP cases were accepted by first instance courts, 399,031 of which were civil cases, making up 95% of case volume. This was an increase of 41% compared to 2018. Of the 2019 disputes, 293,066 (70%) centred on copyright, 65,224 (15%) on trademarks and 22,223 (5%) on patents.
The rise in civil cases is in line with the country’s efforts to raise punitive damages for IP infringement cases and become an increasingly important litigation venue for IP owners. The amount of damages depends on a number of factors, including the losses incurred and whether there is malicious intent. The 2019 amended trademark law stipulates that punitive damages should be one to five times the incurred losses, while the proposed draft changes to the patent law also state the same.
Wang said that the trend towards raising these damages will be seen in years to come.
In 2019, the SPC itself accepted 1,945 IP cases, 1,433 of which were completed at trial. Wang added that the complexity of cases has been a challenge for the court as technical disputes have spanned multiple sectors and there has been an increase in cross-border lawsuits, of which there were 177. While these factors add to the time needed to analyse cases, Wang said that they can help to spark more creative approaches in rulings and create more impactful judgments that can be used as references in the future.
Aiming high
The IP court is continuing to make improvements on the digital front. One of the measures that litigants can take advantage of is sending court documents electronically, which can be done only in the internet courts and SPC currently. Litigants can also share evidence and arrange pre-court meetings through an online litigation platform. An electronic database for cases is being developed to improve information access and transparency.
From a human capital perspective, Wang said that the IP court is recruiting the best of the best from courts across the country. Of the 40 IP judges, 38% have doctorate degrees, 23% have a technical background and 18% have had overseas education. Further efforts will be placed into developing technical expertise across multiple sectors to improve the technical capabilities of the court.
Despite being open for business for just over a year, China’s SPC is demonstrating that it is open to innovation and continuous improvement – which will be factors for success if it becomes a popular venue for settling IP disputes.
