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Why China watchers need to pay attention to IP

Developments at China's IP courts may signal bigger changes to the country's evolving commercial legal system

When discussing China's development, topics such as the internationalisation of the renminbi, reform of the state-owned enterprises, the growth of the middle class and civil society, and the continuing evolution of rule of law concepts regularly capture headlines, with a particular focus on what China needs to do to sustain its rapid growth. Though intellectual property may seem to some to be of less importance than these other weighty issues, developments related to the new specialised IP courts may signal things to come in China's overall evolution.

The IP courts

China's IP courts was a featured topic at a panel about the US-China IP Cooperation Dialogue at last week's Global IP Summit. The panel featured former USPTO director David Kappos, former Federal Circuit chief judge Randall Rader, Jing He of Anjie Law Firm in Beijing, and Mark Cohen of the USPTO, all of whom were closely involved with this year's Dialogue featuring both US and Chinese experts discussing the development of China's IP law.

Is a Chinese Federal Circuit coming?
Though China's three specialised IP courts in Beijing, Shanghai and Guangzhou opened just late last year, there may already be plans for further changes. According to both He of Anjie and Judge Rader, the government is looking into the creation of a unified IP appellate court. The creation of a unified appellate court, which should help standardise the law and lower local influence, is in fact one of the recommendations from this year's US-China IP Cooperation Dialogue. Both Rader and He explained that several government officials see this as the next step, though it may take some time before the idea is implemented. As Rader explained, one official told him that he and other stakeholders need to continue to raise the issue, even if officials may appear to be unreceptive to the idea.

He of Anjie explained that from his discussions with Chinese government officials, several have said that China's new specialised IP courts are being treated as a "R&D centre" for legal reform. For example, judges at the IP courts generally have more authority and independence over their particular cases than the typical Chinese judges. These developments, if successful, may be propagated to the non-IP courts and affect the development of a more independent judiciary.

Fellow panellist Judge Randall Rader made a similar point. He said that compared to US judges, Chinese judges generally have less independence because they are still state officials, and as such may sometimes have other issues to consider. However, from his discussions with Chinese judges and officials, the IP court is experimenting with ways to increase judicial independence and that these developments may be implemented more widely throughout the judiciary, should they prove successful at the IP courts.

Transparency is also a key judicial reform goal. The Chinese government announced two years ago plans to publish all judicial opinions, and the IP courts appear to have be making more progress on this front. Both Kappos and Rader highlighted the IP courts' use of technology to help achieve this and other efficiency gains. On this issue, the IP courts may again be a sign of how things will look in the future throughout the China IP system.

Let's test it first

The use of a particular institution or area as a test lab before rolling out a policy nationwide is a tried-and-true tool for the Chinese government. In 1979, the government created the Shenzhen Special Economic Zone, where it tested out market liberalisation policies before implementing them in the rest of the country. This move is often credited as one of the critical first steps in China's rapid economic growth during the next three decades.

The IP courts may play a similar in the development of China's commercial legal system. Much like how Shenzhen was used to try out new economic policies, the specialised IP courts, already acknowledged as a having judges that are more experienced and professional, may be an ideal place for experimentation on judicial reform. Given the continuing debate about the rule of law/rule by law in China and its importance to the country's evolution, developments at the IP courts may be more important than ever.

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