Abstract
Many improvements have been made to China’s IP enforcement system over the past few decades. However, noteworthy challenges still remain: China could benefit from an even higher quality IP enforcement system that is more time and resource friendly to rights holders, transparent, and creates a stronger deterrent effect against IP infringement/misappropriation. This chapter evaluates the efficiency and effectiveness of China’s IP enforcement system, including how it may be influencing innovation, based on statistical analysis, literature review, and legal analysis.
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Notes
- 1.
Indicators were selected from the China Intellectual Property Index Report (2011) and include, for example, IP output per capita, number of well-known trademarks, total quantity of “China time-honored brands”, total trademark quantity, index of total copyright quantity, as well as in terms of indicators of intellectual property transactions.
- 2.
The Supreme People’s Court of China has a very active IP tribunal which heard and decided 623 IP civil cases from 2014 to mid-2017. Most of these cases are retrial cases [See Zhichantong (2017)]. It seems to us that the main role of the Supreme People’s Court of China is different from that of Federal Supreme Court of U.S. whose philosophy is just to unify the application of law rather than correct the error of lower level courts.
- 3.
IP House’s updated information about IP courts in China, available at https://v1.iphouse.cn/court/navigate.html?c=2.
- 4.
Calculations based on population data from the World Bank and darts IP patent litigation data.
- 5.
According to Article 47 of TRIPS, members may provide that the judicial authorities shall have the authority to order the infringer to inform the IP right holder of the identity of third party involved in the production and distribution of the infringing goods or services and of their channels of distribution, unless this would be out of proportion to the seriousness of the infringement.
- 6.
Opinions on Fully Strengthening IP Judicial Work to Provide Judicial Safeguard for building an Innovation-oriented Country, Supreme People’s Court, 2007.
- 7.
Establish the evidentiary discovery system of IP litigation, Legal Daily, Jan 23, 2015. http://www.legaldaily.com.cn/rdlf/content/2015-01/23/content_5940154.htm?node=34013.
- 8.
On March 10, 2009, the Supreme People’s Court of China for the first time responded to the “case acceptance difficulty” problem by issuing a judicial opinion which clearly requires “People’s Court shall not refuse to accept cases at the end of the year for raising the case concluded rate.”—See the Supreme People’s Court of China, 2009 《关于进一步加**司法便民工作的若干意见》 (Several Opinions on Further Strengthening the Work of Judicial Convenience) (in Chinese).
- 9.
For reference, the patentee winning rate in Duesseldorf Regional Court in Germany from 2009 to 2013 is 66% (534/812).
- 10.
Its statistics contain a total of 11,501 civil trademark lawsuits in the first instance, including 11,366 ownership and infringement-related cases and 135 contractual cases.
- 11.
In the Bei**g area, the Bei**g Specialized IP Court concluded 1090 copyright-related civil cases in 2016. The winning rate of the plaintiff in the cases involving software copyright was 84.9%.
- 12.
In 2016, Bei**g Specialized IP Court concluded 47 cases involving unfair competition. The plaintiff winning rate was 33.3%.
- 13.
Available statistics from the Guangzhou Intermediate and District Court in particular confirm this nationwide trend. Among 10,356 cases during the period 2008–2011 all district courts in Guangzhou applied the rule of statutory damages, and only less than 10 cases were decided by Intermediate Court preserved evidence to calculate the illegal profit of the defendants. Therefore, almost 100% of cases ended with statutory damages (Guangzhou Intermediate People’s Court 2014).
- 14.
There are several reasons why we make this statement: the Bei**g IP Court receives many technical IP cases, which might lengthen the trial’s duration; the Bei**g IP Court tends to grant more damages to IP right holders than other courts in less economically developed areas; and the rising number of IP disputes at the Bei**g IP Court also leads to some case ‘overdue’ problems and make the average duration of trials longer.
- 15.
Regarding damages, the study finds that “Successful foreign patentees received a median damages award of 100,000 RMB in suits against private Chinese firms, exactly the same amount that private Chinese patentees received when they sued private domestic parties”. They also find that “Chinese patentees received 20% less in suits against foreign companies and 60% more in suits against state monopolies. Similarly, foreign patentees received a permanent injunction in every case they won, while victorious domestic patentees were denied injunctions 5–10% of the time” (Love et al. 2016).
- 16.
This is important for several reasons. First, the recording procedure is cost-free, straightforward and ultimately saves time. Second, without prior recording and in case of interception of infringing goods by Customs upon request of the IP right holders, China customs may detain the goods for a limited period of time but do not have the authority to establish the existence of an infringement. The IP right holder will then have to file a lawsuit with the court.
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Prud’homme, D., Zhang, T. (2019). IP Enforcement . In: China’s Intellectual Property Regime for Innovation. Springer, Cham. https://doi.org/10.1007/978-3-030-10404-7_7
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