IP in China: Specialized National Appeals Court to Improve Protection

A new national-level court to handle IP appeals in China will be established after a proposal submitted by the Supreme People’s Court (SPC) was approved.

The draft proposal, which was adopted by the Standing Committee of the National People’s Congress on October 26, sets out to create a unified platform under the SPC to manage appeals relating to intellectual property disputes across the country.

The development comes amid renewed international criticism of China’s treatment of intellectual property, particularly from the US.

The new national-level appeals court stands to improve IP protection for foreign businesses in China – especially for those in high-tech fields – once it takes effect on January 1, 2019.

Nevertheless, while the court should improve the consistency and professionalism of IP appeals cases, it is unlikely to fully address the IP concerns of foreign investors in China.

What cases will the court handle?

According to the draft proposal, the court will handle appeals relating to civil and administrative IP issues, such as trademarks, patents, trade secrets, IC design, and unfair competition, among others.

Zhou Qiang, the president of the SPC, said that the court will specialize in appeals that require highly technical expertise, such as patents on inventions and innovations.

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Because of the high degree of technical knowledge required for these areas, a national-level court under the SPC may be better equipped to handle such cases rather than a lower level regional court.

The court will employ staff with specialized knowledge and establish centralized and standardized procedures for making consistent rulings. Currently, IP cases are usually handled by the Intermediate People’s Court at a regional level.

In 2014, China also established specialized courts in Beijing, Guangzhou, and Shanghai to handle IP-related issues.

If a ruling in one of these courts is appealed, the case would normally be referred to a higher court in the relevant jurisdiction.

Once established, however, IP-related appeals from the Intermediate People’s Court and the specialized IP courts will be heard by the new SPC IP appeals court.

IP appeals in China: Court a step forward for legal protection

Inadequate IP protection has been a longstanding issue for foreign businesses in China and has recently returned to focus amid the US-China trade war.

IP infringement and forced technology transfers have been a key point of contention for US President Donald Trump, and among the reasons he has cited for implementing tariffs on Chinese exports.

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On paper, the establishment of a national-level IP appeals court will improve IP protection for foreign businesses in China. A court under the SPC should be better-resourced and more consistent, professional, and specialized than regional courts.

Further, China has already made strides in recent years to improve IP protection as the government seeks to spur domestic Chinese innovation. For example, within the past year China made a number of landmark rulings in support of oft-imitated foreign brands, including New Balance and LEGO.

However, much of the recent criticism of China’s IP practices relates to the alleged state-sponsored acquisition of high-tech designs and know-how rather than brand name copy-cats and fakes. A national appeals court might therefore prove inadequate in addressing the complaints of foreign businesses that fear their proprietary technology could be stolen.

Nevertheless, as China seeks to become a high-tech superpower, it is in the government’s interest to improve IP protection, and the new national IP appeals court is a step in that direction.

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