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IP courts: the next step in China’s IP evolution?

Plans to set up specialised IP courts in China appear to be picking up steam. What changes will they bring to China’s IP system?

Last November, the Third Plenum of the 18th Party Congress released a paper saying it was looking into establishing intellectual property courts. In the last few weeks, both Guangdong and Beijing have indicated that they would like to house the first of these courts.

The move to create an IP court is not surprising. In fact, according to a 2012 report by the International Intellectual Property Institute (IIPI) and the USPTO, the majority of TRIPS members have specialist IP tribunals or courts of some sort.

Is it worth it?

The IIPI report lists six general benefits fostered by specialised IP courts:

1. Subject matter expertise;

2. Faster decisions;

3. Specialised procedures uniquely for IP cases;

4. Consistency and predictability of outcomes;

5. Faster to adapt and change; and

6. IP protection is highlighted as a government priority.

Practitioners have noted that many courts in China already have specialised IP divisions. Thus, China is likely already reaping some of these benefits, such as developing judges with subject matter expertise, which in turn can lead to more consistent and predictable results.

Similarly, China’s judicial system is already quite fast. According to the CIELA database, the average IP-related proceeding was resolved in four months, with some popular venues taking a bit longer (Beijing – five months, Shanghai – seven months, Guangzhou – nine months).

That said, the move to create a separate IP court can perhaps magnify these benefits. For example, despite many high profile campaigns and undertakings like the National IP Strategy, China still has a reputation in some circles of being a bad actor when it comes to IP. The establishment of an IP court may be in part a signal to trade partners of the country’s efforts. Whether such a court will help China’s reputation, however, is unclear.

The new IP court may also be used to implement reforms to specific parts of the court system. Improving the local courts, which some practitioners say tend to lag in quality in comparison to the higher levels, may also be a goal of the new system.

“Courts in many Chinese cities already have IP tribunals, usually starting at the intermediate and higher people’s court levels; it’s not clear on the face of things how the new proposed IP courts will differ,” says Joe Simone of Simone IP Services. “But it seems likely that the government is planning to extend the IP court system to the basic level courts… Judges in the basic level courts typically don’t get as much training on IP law and are less professional.”

Part of a larger picture

The IP court system will exist alongside other reforms. For example, some courts have been experimenting with the so-called three-in-one system, where one tribunal would hear the criminal, civil and administrative aspects of a related IP case. Similarly, China has also been pushing to increase transparency in both administrative and judicial proceedings by publishing more information about the decisions. In the case of all judicial proceedings, not just IP, decisions must be published unless there is a compelling reason against it.

“There has been a trend of increasing professionalisation and experimenting with innovations aimed at promoting settlements, such as initiating mediation discussions at the beginning of proceedings, rather than after trials are completed,” says Simone.

Indeed, the reforms extend far beyond intellectual property. As Mark Cohen pointed out, improving judicial professionalism may involve issues such as how lower courts are funded in order to limit local influences. Furthermore, because IP rights holders are much likely to be involved in administrative proceedings, the reforms on that front may in fact be more important than having a specialised IP court.

What do you think? What would you like to see in China’s new IP court?

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