Intellectual Property Litigation System Research

The number of Intellectual Property (hereafter referred to "IP") cases accepted and heard by the Chinese courts has been growing continuously in recent years. Compared with general civil litigation, IP litigation has obvious special characteristics. For example, IP cases are usually subject to the exclusive jurisdiction of specialized IP tribunals or IP courts, and in some countries arbitrated by a panel of five judges. Patent rights infringement proceedings are usually suspended due to the patent invalidating procedures initiated by the defendants, which directly leads to low efficiency in the judicial process and inadequate protection of the rights of the patent owner. Where IP rights are infringed, the plaintiff often needs to seek pre-trial injunctions to protect his IP rights in the judicial practice. As one category of IP cases, commercial secret litigations require considerations of confidentiality to protect the substantive rights in the choice of litigation procedures. Therefore, it is necessary to discuss the improvement of the IP litigation system China based on the study of the basic theories of IP litigations and the reform practices conducted in other countries and jurisdictions, while taking the realities and current practice in China into consideration. The author wishes to make some meaningful explorations on this subject.This essay, besides the introduction section, consists of six chapters. The basic contents of each chapter are as follows:The introduction section contains four parts:putting forward the issue, discussing the significance of the study, status quo of studies and researches on this issue and method and innovation in study and research. In the part of putting forward the issue, the author points out that in IP litigation, the increase in the number of courts handling IP litigation is also aggravating the problem of conflicting judgments and decreasing the quality of judgments. In the part of discussing the significance of the study, the author expounds on the theoretical and practical significance of the study. On the theoretical aspect, this essay introduces the latest theories of IP litigation in other jurisdictions and clarifies certain misunderstandings in IP litigation theories and practices in China, including misunderstandings on the establishment of IP courts, the position of technical judges, the use of different trial organization, the establishment and improvement of pre-trial injunction, the establishment of the pleading and defense system and the protection of commercial secrets. On the practical aspect, this essay provides precedents and plans that can be taken as reference by legislation bodies and the judicial system in China, and raises the systematic scheme to improve the Chinese IP litigation system. In the part of the status quo of studies and researches, the author introduces the status quo of studies and researches in and outside of China. At last, in the part of method and innovation in study and research, the author expounds on the method of research and innovating points of this essay. The innovations are shown in several aspects:(1) the author reviews the data of IP litigation practices in China and considers the allocation of judicial resources based on the number of cases in different geographical areas, and proposes to establish IP courts in Beijing, Shanghai, Guangdong and Chongqing as well as plan to establish the position of technical judges for the adjudication of technical cases;(2) the author proposes the use of single judge for simple IP cases and the use of five-judge panels for complicated IP cases, which will result in three separate trial organization methods and procedures in IP litigations, i.e., the single judge method, three-judge method and five-judge method for simple, normal and complex IP cases, respectively; and (3) the author systematically proposes schemes for the establishment or improvement of the pre-trial injunctions, pleading and defense and protection of commercial secrets systems.The first chapter systematically discusses the basic theories of IP litigation to set up a solid foundation for the study and discussion in subsequent chapters. It begins with discussion of the concept of IP rights from the view of substantive law. IP is the general appellation of intellectual achievements. The common features of various IP rights distinguish IP rights from other civil rights, but the various IP rights also have distinctive features among themselves, which may affect the outcomes of disputes. Thus this essay intends to find out the main factors affecting the operation of the IP litigation system, including the difference in the methods to obtain the IP rights, the professional level of the IP rights, the protection period of the IP rights and the remedies for different IP rights. Secondly, by studying some sample cases that are settled through mediation, the author discusses the deficiencies to settle IP cases by mediation and confirms the importance of resolving IP cases by court judgments on the aspects of scope of application of the judgment, the quality of the litigation process and exemplary effect of judgments. Thirdly, after studying connotations, features and types of different types IP cases, this essay finds out that the different types of IP cases should be tried with different trial organization and different trial procedures due to the different complexity of each type of IP rights. Finally, the purposes and functions of IP litigation are analyzed so as to provide a more solid theoretical basis in IP litigation system reform.The second chapter is a review of IP litigation systems in other jurisdictions, especially those in the representative countries of the common law system and the continental law system, so as to provide reference to the establishment of IP litigation system in China. In this chapter, the author mainly explores and introduces the systems of IP litigations with distinctive characteristics in common law system counties like the United States and Britain, and in continental law system counties and jurisdictions like Germany, Japan, and Taiwan, China. For nearly half a century, different measures have been taken with regard to the reform on the specialization of IP litigation cases, simplification of litigation procedures, reducing difficulties in the verifications of technical facts and the protections of IP rights in judicial procedures in these countries and jurisdictions. For example, in the United States, appeals of IP rights cases are subject to the jurisdiction of Federal Circuit Courts, and the IP infringement litigations confirm that the demand for explanations of rights is a legal matter. In Britain, patent disputes are subject to the exclusive jurisdiction of patent courts, and the role of the judges is reinforced in trials of IP cases. In Germany, the disputes arising out of decisions made by the Patent Bureau, the invalidation of patents and the compulsory grant of patents are subject to the jurisdiction of independent patent courts, and the invalidation of patents shall be heard by a panel of five judges. In Japan, IP cases are also heard in special courts, and a panel of five judges will be assigned to complex cases. The High IP Court of Tokyo is equipped with technical investigation officers. In Taiwan, China, independent courts of IP rights are set up for IP rights cases. With regard to the invalidation of patents involved in civil tort cases, the civil court shall decide the validity of the patent. The special characteristics of IP rights are generally the same around the world, and therefore many counties concluded a series of international IP rights treaties. There are substantial similarities of the reform of IP litigation systems carried out in different counties and jurisdictions. The aim of studying such reform in other counties and jurisdictions is to analyze the deficiencies of the IP litigation system in China, and to make proposals on the reform of the IP litigation system in China. The third chapter is a review of the current situations and problems in the IP litigation system in China. The first section analyses the current situations and problems of trial bodies in IP litigations in China, including the court and judges of IP cases, and the trial bodies in civil tort cases involving objections on the validity of IP rights. The first section concludes that the diversified trial bodies in IP rights litigations will lead to deviating judicial understandings on the same issues, unprofessional judgments and delays in procedures. The second section discusses the current situations of trial organization in IP cases and concludes that the trial of all IP litigations with a panel of three judges without exception impairs trial efficiency, and hinders the verification of disputed facts in complex cases. The third section discusses the "dual" model used in IP litigations and the "unification of triple trials" model, and analyses the origin and defects of the "dual" model, which increases the costs of litigation for the parties and is adverse to the protection of IP rights. This section also analyses the differences between civil, administrative and criminal procedures, and points out the defects of the "unification of triple trials" model. The fourth section points out that so far there are no effective measures to stop the increasing number of infringements on IP rights in China, and it explores the defects existing in court procedures, rights protections and remedies in the provision of pre-trial injunction in China. This section also elaborates on the negative effects of the current pleading and defense procedures in the trial of IP cases, and it further points out the unreasonable aspects of the sporadic trial procedures in commercial secrets cases regarding the protection of the substantive rights of commercial secret owners.The fourth chapter elaborates on the necessity and feasibility of the reform of the IP litigation system in China. The first section elaborates on the necessity of the reform of the IP litigation system from the aspects of improving efficiency in IP litigations, realizing judicial justice, reducing IP litigation costs and implementing the national IP strategy. The second section expounds that the reforms carried out in foreign counties and jurisdictions could be used as reference for China, proposes that the reform shall be promoted from both legislative and judicial aspects, and analyzes the realities of technology, politics, legal cultures, judicial resources of China with the conclusion that it is feasible to carry out the reform of the IP litigation system in China.The fifth chapter puts forward the reform scheme of the trial body and trial organization of IP litigations in China. The first section proposes the scheme of setting up specialized courts of IP rights and allocating technology judges. The author hereby proposes that courts of first instance be set up in Beijing, Shanghai, Guangdong and Chongqing based on previous researches and comprehensive empirical statistics. As to the technical issues of IP rights, judges with technical knowledge shall be allocated to hear IP rights cases. The second section puts forward the suggestion that different kinds of IP rights cases should be handled by different trial bodies and with different hearing procedures, for example, simple IP rights cases can be adjudicated by a single judge, normal ones can be adjudicated by a three judges, while complicated ones can be adjudicated by a panel of five judges so as to achieve justice and improve efficiency at the same time.The sixth chapter puts forwards the reform scheme of the trial model and special trial procedures of IP rights cases. The first section analyzes IP rights validity issues in civil cases, and suggests that there are adequate basis for the reform of "dual" model trial of IP rights disputes and that IP rights validity issues should be decided directly by the courts in civil litigations, because the dispute to be resolved is a civil dispute and the right to be protected is a civil right. In the second section, considering the vulnerability of IP rights to infringements, the difficulty in making up for the losses, the urgency in the need for remedies, and the possibility of the courts erroneously granting pre-trial injunctions, the author suggests the establishment of the review scheme to supervise the issuance of pre-trial injunction orders by regulating the serving of pre-trial injunction orders, establishing a hearing procedure and establishing an appeal procedure to a higher court if the party against whom the injunction order objects to it. Taking into account the experience that IP rights owners accumulates, the financial status of IP rights owners and also in consideration of the complexity of IP cases and the assumption of validity of patents, the author puts forward the suggestion that a pleading and defense procedure shall be systematically established in IP rights litigation by improving the forms used in the pleading and defense procedure and the affirmation of waiver of rights principles in pleading and defense. This section also puts forward the scheme of establishing systematic protection of commercial secret in IP litigation procedures due to the easiness of disclosure of commercial secrets, in different phases of a trial including the decision on whether a pleading requires confidentiality, the production and questioning of evidence, the hearing process, the method of expression in litigation documents, the filing and archiving of litigation documents and the appellate procedure with regard to commercial secrets cases.