Injunctions under review in China

Attendees at this week's Managing IP Innovation Forum in Shanghai

That’s not because enforcement is routinely terrible. Most IP practitioners we have heard from this week say things aren’t bad and they are getting better. People have been subjected to mass IP education campaigns, officials are better trained and higher levels of domestic innovation mean that China is increasingly incentivised to crack down on IP infractions.

But IP owners do want Chinese courts to offer more preliminary injunctions. Tough evidence rules and difficulties in obtaining preservation orders make it hard for plaintiffs to prove how much defendants profit from infringing IP. As a result, many can only seek statutory damages, which are still low. When damages orders have little deterrent effect, preliminary injunctions take on particular significance.

So far, however, Chinese judges have been reluctant to grant them. In 2011, for example, there were around 130 out of almost 60,000 civil IP cases (the vast majority of which were between Chinese companies).

That is the result of guidance from the top. At the end of 2011 the Supreme People’s Court issued a judicial interpretation setting out how lower courts should handle IP cases, which emphasised that judges should be cautious about granting preliminary injunctions. That followed a 2009 judicial interpretation, which set out when courts should consider not granting injunctive relief.

Now it seems as though the top court is rethinking its position. We understand that members of its IP Tribunal have been meeting IP professionals from other jurisdictions to hear more about injunction practices in their countries – with a view to issuing a new judicial interpretation next year.

Of course courts overseas don’t hand out injunctions to anyone who wants one. Nor should they. But if Chinese judges were encouraged to grant more, it might do much to reconcile IP owners to low damages awards.

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