Introduction

In 2018, under the strong leadership of the Central Committee of the Communist Party of China (CCP) with Xi Jinping as the leadership’s core and guided by the underlying precepts of Chinese socialism for the new era, the People’s Courts have applied the principles and implemented instructions decided at the 19th National Congress of the Communist Party of China (“Party Congress”)，the second and third plena of the 19th CCP Central Committee and the Central Political and Legal Work Conference. They studied and applied the ideals of General-Secretary Xi Jinping’s key addresses, and fostered

the “four aspects of consciousness"—consciousness in political correctness, in serving the broader interests, in following the core leadership, and in staying aligned with the central party leadership; the “four matters of confidence"一confidence in the path of Chinese socialism, in the theoretical foundation of the path, in the system of Chinese socialism and in the Chinese culture; and the “two pillars to safeguard"—safeguarding the core status of General Secretary Xi Jinping, and the central and unified leadership of the CCP Central Committee. The People’s Courts adopted a steady and progressive approach to work, keeping in mind their earliest aspirations and the current mission, and discharging adjudicatory responsibilities as conferred by the Constitution and the law. Our judges have been our trusted achievers, as they endeavoured to deliver for the people a sense of equality and justice in every case handled by the judiciary. Reforms in intellectual property adjudication have deepened, and supervision and guidance for adjudicatory operations have increased. And as the courts strive to make the courtroom the principal forum for intellectual property protection, they are also providing effective judicial safeguards, in the process of working tenaciously toward the “two centennial goals", and toward achieving the China dream of the great rejuvenation of the Chinese nation.

1. Buttressing judicial protection and leveraging
   the judicial process

In a speech delivered at the conference celebrating the 40th anniversary of China’s reform and opening-up, General-Secretary Xi Jinping emphasised the importance of following through the innovation-driven development strategy by creating a more enabling eco-system for innovation and accelerating proprietary innovation of key technologies to forge new socio-economic growth engines., Given China’s strategic thrust of elevating technological innovation capabilities and promoting high-quality economic development, strengthening protection of intellectual property is a natural and necessary option. Last year was marked by soaring case-load, with massive increase in new types of cases and cases of gravity and complexity. Adjudication was thus more challenging. Law enforcement and adjudication is and will always be the people’s courts’ top priority, where civil adjudication is the primary focus of the courts’ adjudication practice, followed by administrative and criminal adjudication, both of which being equally important. The fact-finding process is rigorous, law-application prudent and judicial policies elucidated to ensure lawful and efficient adjudication of intellectual property disputes.

Last year; the People’s Courts accepted a total of 334,951 intellectual property cases, including first instance and second instance cases and applications for extraordinary legal remedy to reopen cases, and concluded 319,651cases (including carried forward cases), representing a respective year-on-year increase of 41.19% and 41.64%.

• More effective adjudication of civil disputes to ensure sustained and sound socio-economic development

Throughout the past year; the People’s Courts have directed efforts to meeting the new goals and new demands on the intellectual property judicial protection under the comprehensive deepening of reform agenda, delivered fair justice, and strengthened civil adjudication to better protect intellectual property rights and the full interests of the rights holders.

In 2018, the local people’s courts accepted 283,414 and concluded 273,945 civil intellectual property cases of first instance, and the respective year-on-year increases were 40.97% and 41.99%. Among the newly accepted cases, 21,699 were patent cases, an increase of 35.53% from last year; 51,998 trademark cases, a 37.03% increase; 195,408 copyright cases, a 42,36% increase; 2,680 technology contract-related cases, a 27.74% increase; 4,146 unfair competition cases (including 66 monopoly cases), a 63.04% increase. Other intellectual property disputes constitute 7,483 cases, 44.60% increase from last year.

The local people’s courts accepted 27,621 (26.60% year-on-year increase) and concluded 26,288 (28.08% year-on-year increase) civil intellectual property cases of second instance. For extraordinary legal remedies to reopen cases terminated by a final judgement (zaishen), the local people’s courts accepted 223 cases and concluded 221 cases, representing a increase of 189.61% and 301.82% respectively.

In the same year; the Supreme People’s Court accepted 913 new civil intellectual property dispute cases (81.51% year-on-year increase) and concluded 859 (74.24% year-on-year increase). The number of newly accepted and concluded second instance cases were 24 and 21, and the number of newly accepted and concluded reopened cases were 798 and 759, representing year-on-year increases of 76.55% and 71.72% respectively; among the certiorari (tishen) cases, 77 were newly accepted cases and 65 concluded cases.

High profile civil disputes involving intellectual property heard and concluded by the people’s courts during the year include:

Wuxi Guowei Ceramic Electrical Appliances Co., Ltd (plaintiff/ appellant/ petitioner), Jiang Guoping (plaintiff/appellant/petitioner) vs. Changshu Linzhi Electrothermal Devices Co., Ltd (defendant/ appellant/petitionee), Suning.com Co., Ltd (defendant/appellee/

petitionee) involving a dispute on utility patent infringement; Guangzhou Compass Conference and Exhibition Service Co., Ltd (plaintiff/appellant,) vs. Fast Retailing Trading Co., Ltd. (UNIQLO) (defendant/ appellant) involving trademark infringement dispute; Beijing Baidu Network Technology Co., Ltd (defendant, appellant) vs. Beijing Sogou Technology Development Co., Ltd (plaintiff, appellee) involving an invention patent dispute; Beijing Microvision Horizon Technology Co., Ltd (plaintiff) vs. Baidu Online Network Technology (Beijing) Co., Ltd (defendant) et al. involving infringement of the right of dissemination via the information network; Beijing Dehong Seed Industry Co., Ltd (defendant/appellant/petitioner) and Henan Academy of Agricultural Sciences (defendant/appellant/petitioner) vs. Henan Goldoctor Seed Co.,Ltd (plaintiff/appellee/petitionee) involving infringement in new plant variety; Canon Inc. (plaintiff) vs. Shanghai MUMING Electronic Technology Co., Ltd (defendant) involving an invention patent dispute; 3M Company (plaintiff/ appellee) vs. Shanghai Yuanjia Plastic Co., Ltd (defendant/appellee) and Shanghai Yushuaiwei Industrial Co., Ltd (defendant/appellee) et al. involving invention patent infringement; Activision Publishing, Inc. (plaintiff/appellant) vs. Huaxia Film Distribution Co., Ltd (defendant/ appellant) involving infringements of copyright and trademark, unauthorised use of the unique names of well-known goods, and false advertising; and Crosplus Home Furnishings (Shanghai) Co., Ltd (plaintiff/appellant) vs. Beijing Zhongrong Hengsheng Wood Co., Ltd et al (defendant/appellee) involving copyright infringement.

• More effective adjudication of administrative disputes to promote and supervise law enforcement by administrative agencies with regard to intellectual property

The newly amended Administrative Litigation Law and its judicial interpretations were rigorously applied during the past year. By stepping-up judicial review for cases involving the granting and validation of intellectual property rights, and exercising stronger oversight to support the administrative authorities to administer according to law, administrative law enforcement is further regulated.

In 2018, the local people’s courts accepted 13,545 administrative intellectual property cases of first instance, 53.57% more than last year. Specifically, 1,536 were patent cases (76.15% year-on-year increase), 11,992 were trademark cases (51.20% year-on-year increase) and 17 were copyright cases (no change from last year). 9,786 first instance cases were concluded, 53.15% more than last year. 3,565 administrative intellectual property cases of second instance were accepted by the local people’s courts (304.20% year- on-year increase), and the number of concluded cases totalled 3,217 (180.72% year-on-year increase), of which, the courts upheld the decisions of 2,708 cases, amended the first instance judgement for 446 cases, remanded 9 cases for retrial, dismissed 45 cases, overruled the decision in 1 case, and disposed of 8 cases through other methods.

The Supreme People’s Court accepted 642 and concluded 581 administrative intellectual property cases, representing an increase of 64.19% and 41.02% respectively. Specifically, 537 cases were reopened (55.20% year-on-year increase) and 484 concluded (32.24% year-on-year increase); 99 certiorari cases were newly accepted during the year and 89 concluded.

High profile administrative disputes involving intellectual property heard and concluded by the people’s courts during the year include:

Christian Dior Perfumes LLC (plaintiff/ appellant/ petitioner) us. Trademark Review and Adjudication Board (TRAB) of the State Administration for Industry and Commerce (SAIC) (defendant/ appellee/ petitionee) involving the rejection of a trademark application; Shenzhen QVOD Technology Co,, Ltd (plaintiff/ appellant) vs, Shenzhen Market Supervision Administration (defendant/ appellee) and Shenzhen Tencent Computer System Co,, Ltd (third party in original instance) involving a dispute on copyright administration penalty; E Italian (Langfang) Electronic Engineering Co,, Ltd (petitioner/ third party in original instance) vs, Wang He (plaintiff/appellant/ petitionee), Yao Peng (plaintiff/ appellant/ petitionee) and Patent Re­

examination Board (PRB) of the State Intellectual Property Office of the PRC (defendant/ appellee/ petitionee) involving an administrative dispute over the invalidation of an invention patent; Guangzhou Sealy Electronic Technology Co., Ltd (petitioner/ third party in original instance), Jinan Qianbei Information Technology Co, Ltd (petitioner/ third party in original instance) vs. Poker City Network Technology (Shanghai) Co., Ltd (plaintiff/ appellant/ petitionee) and Trademark Appeals Board of the State Administration of Industry and Commerce (defendant/appellee) involving an administrative dispute on trademark opposition review; Andis Company (plaintiff/ appellant/ petitioner) vs. Trademark Review and Adjudication Board (TRAB) of the State Administration for Industry and Commerce (defendant/ appellee/ petitionee) and Ningbo Brofa Hairdressing Appliance Co.,Ltd (defendant/appellee/petitionee) involving an administrative dispute on trademark opposition review; Trademark Office of the State Administration for Industry and Commerce (defendant/ appellant) vs. Anhui Huayuan Pharmaceutical Co., Ltd (plaintiff/ appellee) involving a trademark administrative dispute; Trademark Office of the State Administration for Industry and Commerce (defendant/ appellant) vs. Shenzhen Tencent Computer System Co., Ltd (plaintiff/ appellee) involving an administrative dispute over the review of a rejected trademark application.

• More effective adjudication of criminal offences to sanction intellectual property infringement

The People’s Courts exercised their official powers of criminal adjudication as a powerful lever to deter criminal infringement of intellectual property rights and to maintain a positive legal environment that protects intellectual property.

In 2018, the local people’s courts accepted 4,319 intellectual property-related criminal cases of first instance, 19.28% higher than last year. Among the accepted cases, 4,117 were related to criminal infringement of registered trademarks (20.20% year-on- year increase), and 156 were criminal copyright infringement (7.69% year-on-year decrease).

The local peoples’ courts concluded 4,064 intellectual property- related criminal cases of first instance in total, 11.59% higher than last year. 1,434 cases involved manufacturing and selling counterfeit or substandard goods, 30.36% higher than last year. Of the concluded first instance cases, 1,852 cases were related to the counterfeiting of registered trademarks, 9.78% higher than last year; 1,724 cases involved selling goods bearing counterfeit registered trademarks, 15.39% higher than last year; 305 were cases of illegal manufacturing or sale of goods bearing illegally produced registered trademarks, 17.31% higher than last year; 2 cases involved counterfeiting patents;

136 cases were related to the criminal infringement of copyright, 20% lower than last year; 6 cases involved selling infringing reproductions, 50% higher than last year; and 39 cases involved

① crimes of trade secret infringement, 50% higher than last year. a

For intellectual property-related criminal cases of second instance, the local people’s courts accepted 683 cases, 28.17% higher than last year; 668 cases were concluded, representing an increase of 23.70%.

High profile criminal cases involving intellectual property heard and concluded by the people’s courts during the year include:

Li Gongzhi and Wu Qin's illegal production of registered marks; Jushi Online (Beijing) Technology Co., Ltd and Huang Ming, who were involved in a copyright infringement crime.

In 2018, intellectual property protection by the judiciary exhibits five

key features.

Considerable increase in case numbers： In 2018, the number of civil, administrative and criminal intellectual property cases newly accepted by the People’s Courts was 334,951, 97,709 cases and

41.19% more than last year. First instance administrative and civil

a The above publicised figures exclude the total number of first-instance intellectual property-related criminal cases, the number of cases involving the manufacturing and sale of counterfeit and substandard goods, the number of cases relating to illegal business operations involving infringement of intellectual property rights, and the number of other intellectual property infringement cases.

disputes increased substantially, by 53.57% and 40.97% respectively. Most notably, Guangdong Province’s first instance administrative cases went up by 77.78% year-on-year; and Beijing accepted 52,463 new cases, 47.40% more than last year. Beijing, Shanghai, Jiangsu, Zhejiang and Guangdong continued to operate under a heavy case­load, having accepted 185,337 civil cases of first instance and accounting for 65.39% of the national total for the same category, with Shanghai increasing by 49.77% and Jiangsu Province by 45.48% year-on-year. Zhejiang Province’s new first instance patent cases grew by 79.53%.

Many other provinces also witnessed an explosive year-on-year increase. For example, the case-load for Gansu Province grew by 290%, Guizhou Province by 157.22%, Qinghai Province by 155%, Shaanxi Province by 89.4%, Tianjin Municipality by 82.3%, Sichuan by 67.57%, Guangxi autonomous region by 40.05%, and Hainan Province by 156.16%. Also, Hebei Province’s newly accepted first instance cases grew by 156.44% and Heilongjiang Province’s newly accepted first instance civil cases increased by 130.71%. Shanxi Province’s newly accepted first instance cases grew by 65.6%, of which cases involving copyright disputes increased by 199%, and second instance cases increased by 155%

Significantly greater case impact: By hearing different types of cases fairly and efficiently, a digest of cases with significant impact has been created, and intellectual property adjudication by the People’s Courts have received increasing attention from home and abroad. For example, for Christian Dior Perfumes LLC vs. Trademark Review and Adjudication Board (TRAB) under the State Administration for Industry and Commerce (SAIC), an administrative dispute concerning the refusal of TRAB to accept a trademark application by the plaintiff, the Supreme People’s Court conducted open hearing and pronounced the verdict immediately after submissions. The outcome of the case reflects the principle of equal protection for local and foreign rightsholders, and features prominently the value orientation of complying with international conventions and strengthening international cooperation. Through the case, the court also reinforces the demand for due administrative processes and embodies the values of prompt relief and comprehensive protection. This is of exemplary significance in terms of making known China’s accomplishments in intellectual property protection, and for making Chinese courts a “preferred forum” for resolving international disputes.

The courts have also adjudicated disputes involving trademark disputes, where famous companies sought to protect their brand interests and market share, and copyright disputes involving the

transmission of cinematograph films and television works through the Internet. These cases involved large claims and attracted wide social attention. For example, in Zhejiang Geely Holding Group Co Ltd us, WM Motor heard by the Shanghai High People’s Court, the claim was CNY 2.1 billion; in Shenzhen QVOD Technology Co,, Ltd us, Shenzhen Market Supervision Administration, the Guangdong High People’s Court ordered an “astronomical fine” of CNY 260 million, which received much public attention. Shanghai Pudong Court heard the Liu Santian v, Zhou Meisen copyright infringement case, which was also a highly publicised case involving In the Name of the People (Renmin de Mingyi) a renowned anti-corruption TV drama.

Adjudication becoming increasingly challenging: As China presses ahead with the development of a market economy and the implementation of the innovation-driven development strategy, technology-based disputes involving finding of complex technology facts or other new types of disputes are increasingly emerging, and new adjudication challenges for intellectual property disputes confront the courts. For example, the Beijing courts heard and concluded the case of Xi'an Xidian Jietong Wireless Network Communication Co,, Ltd vs, Sony Mobile Communications (China) involving standard essential patents, Jaguar Land Rover Automotive PLC vs, Jiangling Motors Group Co,, Ltd, an administrative case involving the invalidation of a design patent, and the first administrative lawsuit involving the rejected application of “DiDiDiDiDiDi” sound trademark.

The Shanghai Intellectual Property Court concluded the case of Wuhan Han yang Guangming us, Shanghai Hankook Tire Sales, where the defendant is accused of entering into vertical monopoly agreements and of abusing its market dominance. This was the first vertical monopoly dispute that the court has heard. The same court also adjudicated several cases involving genetic technology or genetic data, such as the DNA Genotek Inc, us, Chinese National Human Genome Center (Shanghai), an invention patent dispute involving the infringement of a patented genetic testing technology for human genes; Huashan Hospital (a teaching hospital affiliated to Fudan University) us, Jonathan Flint, a case of infringement of the exclusive ownership of information of human genetic resources, which involves the attribution of ownership of human genetic data. The Shanghai Pudong Court also concluded Youku Information Technology (Beijing) Co,, Ltd us, Shanghai Qianshan Network Technology Deuelopment Co,, Ltd, which involved the issuance of a cease and desist order before an unfair competition trial, targeting at the defendant’s video aggregation platform.

Adjudication quality progressively improved: First, significant increase in the number of concluded cases. On a year-on-year basis,

the percentage of cases concluded by the Hainan courts in 2018 grew by 161.76%; first instance cases concluded by the Hebei courts was 2,608, representing a 156.44% increase; in Hunan, 9,545 cases were concluded, 69.08% more than last year. In Beijing, 49,596 first instance cases were concluded, 56% more than last year; for Tianjin, the figure was 4.410, with a year-on-year increase of 68.3%; for Sichuan Province, 7,331 cases were concluded, representing an increase of 67.34%.

Second, the percentage of cases accepting the courts’ decision as final continued to be encouraging. In Shanghai, with significant increase in new acceptances and disposals, 94.13% of the cases accepted the first instance decision. In Xinjiang with zero petition and complaints through the Xinfang (“Letters and Visits”)channel.

Third, significant increase in rate of post-mediation discontinuance. Ningxia courts achieved a post-mediation discontinuance rate of 92%. In Liaoning, 74.87% of the cases were discontinued after mediation; the figure for Jiangxi was 69.81%. In Shandong, 68.7% of first instance intellectual property cases were discontinued after mediation; Heilongjiang’s figure was 66.2%. In Anhui Province, post­mediation discontinuance rate was 61.86%. The high post-mediation discontinuance rate and high rate of acceptance of the courts’ decision have generated good social outcomes.

Protection continued to strengthen： The People’s Courts have continued to award damages based on market value to increase the severity of punishment for intellectual property infringement. This will also raise the cost of breaching the law and keep the damages quantum on par with the market value of intellectual property to effectively protect the interests of rightsholders. In an unfair competition case involving the “Laoban ‘老板brand of electrical appliances, the Zhejiang High People’s Court which heard the appeal referred to the sales figures submitted as evidence in another case, the selling prices showed in the infringing website and the operating profits indicated in the annual financial statements of the rightsholder’s listed company. The court determined that the gains from infringement had exceeded the rightsholder’s claim of damages, and went on to award the entire claim of CNY 10 million, which the demonstrated the value orientation of stepping up intellectual property protection. While civil adjudication is the predominant means of resolving intellectual property disputes, the People’s courts have continued to focus on using criminal sanctions as deterrence. In the case of He Wei et al. heard by the Hubei High People’s Court, where six people were involved in counterfeiting registered trademarks and selling goods with counterfeit marks and where the criminal proceeds was almost CNY 16 million, the Ministry of Public Security gave the case priority focus to supervising the

investigation phase. The case, which attracted much public attention, was difficult in the application of law. The court eventually sentenced He Wei, the principal offender, to seven years in prison on the charge of counterfeiting registered trademarks and three years in prison on the charge of selling goods with a counterfeit mark, thus, totalling 10 years, and a fine of CNY 3.71 million. The punishment meted out to the offender clearly demonstrates the capabilities and level of criminal protection for intellectual property.

1. Enhancing the robustness of the adjudication system and
   pursuing innovative approaches to judicial reform

2018 marks the first year when we put into action the values and precepts of the 19th Party Congress and the 40th year of China’s reform and opening-up. Increasingly, intellectual property is becoming the most important intangible asset in the world, a critical component of national interests, and an essential tool when great powers collide. The world is undergoing a period of change, with major development, major transformation and major adjustments, and the international regime governing intellectual property rights is also progressing and evolving. Determined to change and innovate, the People’s Courts are pushing ahead with reforms of the intellectual property judicial regime to recalibrate systems and mechanisms and rebuild capacities for the modern age.

• Establishing an Intellectual Property Tribunal under the Supreme People’s Court

Creating an intellectual property tribunal within the Supreme People’s Court is part of the efforts to developing a sound and China­specific judicial protection regime for intellectual property. In February 2018, the Central Commission for Deepening Overall Reform decided that the setting up of an intellectual property tribunal would a key reform focus for 2018. The Supreme People’s Court’s Party organisation regarded the development of the intellectual property tribunal as a key priority, and Chief Justice Zhou Qing chaired a special meeting to study the feasibility of the project, demanding that the intellectual property tribunal meet the criteria being of “high starting point, high standard, high level and international in nature”. On 26 October; the Sixth Meeting of the Standing Committee of the 13th National People’s Congress approved the “Decision of the National People’s Congress Standing Committee on Several Issues Concerning Litigation Procedures for Patent and Other Intellectual Property Cases”. On 3 December 2018, at the 1756th meeting of the Supreme People’s Court Judicial Committee, the “Supreme People’s Court’s Provisions on Several Issues Concerning the Intellectual Property Tribunal” was adopted. The provisions clarified issues such

as the scope of cases to be heard by the tribunal and the alignment of procedures. Being a permanent adjudication entity that is part of the Supreme People’s Court, the intellectual property tribunal is an appellate-level tribunal having centralise jurisdiction over appeals of patent infringement and antitrust or other technology-related intellectual property disputes. Within a short time, the tribunal has accomplished a suite of tasks, including site selection, recruitment, upgrading of case-operations system and back-end support, and officially began accepting cases on 1 January 2019.

Establishing the intellectual property tribunal is an important decision and resource deployment that stems from the strategic thinking of the CCP Central Committee with Xi Jinping as the core leader, which is to develop China into a global powerhouse in intellectual property and in science and technology. It is also an important reform measure for our comprehensive deepening of judicial reform and promoting fair justice, an important symbol of the intensification of reform and opening-up in the new era, an important outcome of 40 years of continued reform and opening- up, and an important institutional innovation that provides rigorous protection for intellectual property, that serves the innovation-driven development strategy, and that helps cultivate a world-class business environment. Thus, the intellectual property tribunal is of enormous significance to China’s rule-of-law development and its history of advancing the cause of people’s justice.

• Progressive deepening of the structural and operational development of intellectual property courts

The intellectual property courts have followed through the National People’s Congress Standing Committee’s deliberations and opinions on Chief Justice Zhou Qiang’s report on the work of the intellectual property courts. Increased guidance was provided for the Beijing, Shanghai and Guangzhou intellectual property courts to elevate the standard of their operations. The three courts have made solid and smooth progress, and have achieved significant outcomes. By hearing high profile cases that draw considerable public attention, the courts establish the rules for deciding cases and promote unification of adjudication criteria, providing essential guidance for development of the adjudication sector. The courts’ efforts at significantly increasing compensation awards and encouraging litigation integrity have won them worthy praises from the society at large.

Having implemented a host of measures, the intellectual property courts are also the ground-breakers and trail-blazers of judicial reform: in terms of human resource management, they put in place the judicial accountability system, the professional judges headcount system, and a flat management structure; in terms of mode of adjudication, they developed a collaborative judge-led model with

categorised personnel, and clear accountability and responsibilities; in terms of de-bureaucratisation, they attempted hearing conducted directly by the adjudication committee, and having presidents and chief judges hear cases on a regular basis; in terms of case operations, they explored the case diversion system to separate simple cases from complex ones, and reform of written judgements, and established the technical investigation system to accumulate replicable and scalable experiences. The intellectual property courts also organised symposiums focusing on the development of a system for intellectual property courts, reviewed the lessons and experiences of the intellectual property courts and tribunals, and studied the ways to improve on the system.

• Improving the organisational development of specialised intellectual property adjudication institutions with cross-regional jurisdiction

To carry out the national intellectual property strategy, optimise intellectual property case management, and integrate intellectual property adjudication resources, the Supreme People’s Court approved in 2017 the setting up specialised intellectual property adjudication institutions with cross-regional jurisdiction in 11 cities, including Nanjing and Suzhou. In 2018, it approved the establishment of intellectual property tribunals in another 8 cities, namely Tianjin,

Zhengzhou, Changsha, Xi’an, Nanchang, Changchun, Lanzhou and Urumqi. Except for Lanzhou and Urumqi, which will commence operations in 2019, the other 6 intellectual property tribunals have commenced operations. Establishing these tribunals are important for unifying the yardsticks for decision-making, improve adjudication quality, and maintaining market order. They are also instrumental in terms of protecting the lawful interests of market players and in implementing China’s innovation-driven development strategy. More effort will be committed to provide professional guidance for cases handled by the specialised intellectual property adjudication entities with cross-regional jurisdiction, and the resource allocation for intellectual property adjudication will be continually optimised to improve on the overall jurisdiction structure.

• Continuing with “three-in-one” reform

In 2018, the Supreme People’s Court buttressed the results of the “three-in-one” reform by performing field studies in multiple provinces and cities. It also convened in Zhengzhou and Chongqing national symposiums for selected courts on topics relating to advancing the “three-in-one” initiative and investigative studies of intellectual property criminal adjudication. Participants at the symposiums carried out in-depth study of the problems in intellectual property criminal adjudication, and completed the “Research Report on Promoting Nation-wide ‘Three-in-One’ Adjudication of Intellectual Property Cases” and “Nation-wide Research Report on Criminal Adjudication in Chinese Courts”.

The above reports emphasised the need for the intellectual property tribunals of the different levels of courts to fully comprehend the inherent nature of the “three-in-one” mechanism for intellectual property adjudication, that the scope of intellectual property protection stems from a single intellectual property right, and that civil adjudication constitutes the core of the “three-in-one” model and the basis of administrative and criminal adjudication. In intellectual property disputes, civil adjudication determines the jurisdiction structure of “three-in-one” adjudication, in that the jurisdiction of civil cases must be the focal point, around which jurisdiction for administrative and criminal disputes aggregate. The reform of the “three-in-one” mechanism is the chokepoint but also the opening for the People’s Courts to become the main channel for protecting intellectual property in the new era. Therefore, full effort should be devoted to the implementing the “three-in-one” model, as decided by the Central Committee and as arranged by the Supreme People’s Court.

Currently, 17 high courts, 113 intermediate courts and 129 basic- level courts have implemented the “three-in-one” model. At the same

time, the Supreme People’s Court continues to give important priority to fighting infringement and counterfeiting to protect intellectual properties, and has been diligent and committed to this priority, having collaborated with the various authorities to follow through the decisions and arrangement of the CCP Central Committee and the State Council. Led by the office of the National Leading Group on the Fight against IPR Infringement and Counterfeiting, the Supreme People’s Court has participated in the drafting of various documents, compiling materials, jointly endorsing documents, supervising case operations and on-site appraisal. Its excellent performance of the various tasks has won it the accolade of “Outstanding Group Award for Combating Infringement and Counterfeiting”.

The Hunan courts developed comprehensive intellectual property protection regime comprising civil protection, administrative oversight on law enforcement and criminal sanctions. In the appeal by the Tianyuan People’s Procuratorate of Zhuzhou City, where defendants Xiang Fangxiang and Shangguan Zongshang were accused of illegally manufacturing and selling illegally produced registered trademarks and marks, the Hunan Zhuzhou Intermediate People’s Court amended the principal penalty from suspended prison sentence to prison sentence to effectively deter intellectual property crimes.

At the national symposium on fighting infringement and counterfeiting, the Shanghai Pudong Court shared its progress in driving the “three-in-one” adjudication model and was duly recognised. In the “three-in-one” reform initiative for intellectual property adjudication which all Chinese courts are pushing ahead, it is the “replicable and scalable” “Pudong experience” for general emulation.

• Unifying adjudication criteria and strengthening
  judicial supervision and guidance

Having unified adjudication criteria and ensuring a uniform approach to law-application for consistency and predictability is necessary for developing the intellectual property legal regime. In 2018, the People’s Courts have devoted much effort to unifying adjudication criteria and supervision of adjudicatory operations, and were able to correctly discern and manage the peculiarities and nature of intellectual property adjudication and align adjudication operations between the different levels of courts to improve adjudication quality and efficiency.

• Convening national adjudication work meetings to review and organise all aspects of the current operations

In July 2018, the Supreme People’s Court convened in Qingdao its 4th National Work Meeting on Intellectual Property Adjudication, for which Chief Justice Zhou Qiang gave important instructions. At the meeting, groups and individuals with outstanding performance were recognised and commended. Ten representatives from different courts shared their experiences. Vice President Tao Kaiyuan reviewed in depth the courts’ work for the past five years and the current situation and tasks, and organised intellectual property adjudication work for the near future. The meeting established the “three-step” development goal for intellectual property adjudication and specified the direction for the next five years. It also set forth nine major areas of increased emphasis, which are: establishing the courts as the key dispute resolution channel for intellectual property disputes to elevate the courts’ authority in the intellectual property legal regime; strict protection to increase the intellectual property rightsholders’ sense of gain; encouraging innovation to cultivate an innovative legal environment; maintaining competition to preserve an effective and healthy competition mechanism; values-driven to promote the core values of socialism; international perspective to continue elevating the international impact of judicial protection of intellectual property; reform and innovation to continue to modernise the intellectual

property adjudication system and adjudication capabilities; supervision and guidance to improve the quality and efficiency of intellectual property adjudication; capacity-building to develop a team of world-class judges. The principles established at the meeting were pertinently instructive for intellectual property adjudication in China for the near future.

• Greater focus on studying and publishing judicial interpretations

The Supreme People’s Court issued the “Provisions on Several Issues Concerning the Intellectual Property Tribunal” to expound details such as the nature of the organisation, scope of case acceptance, litigation procedures, working mechanism of adjudicatory powers and linking of procedures. Another judicial interpretation issued was the “Provisions on Several Issues Concerning the Application of Law in Examining Cases Involving Taking Preservation Measures against Infringing Acts in Intellectual Property Disputes'： which provided clarity on matters such as the applicants of preservation cases, review procedure, necessity of preservation, jurisdiction relating to the determination of erroneous applications and initiation of compensation action to redress an erroneous application, removal of preservation measures, application charges. It also drafted a judicial interpretation concerning the participation of technical investigators

in litigation, which was submitted to the adjudication committee for deliberation. Judicial interpretations concerning adjudication of administrative cases relating to the granting and validation of patent rights are continuously studied, and new problems that emerged are widely discussed.

By working on and publishing the above judicial interpretations, the Supreme People’s Court has put into effect the “Opinions on Several Issues concerning Strengthening Reform and Innovation in Intellectual Property Adjudication" issued by the CPC Central Committee, to ensure that the “Pilot Programme on Establishing Intellectual Property Tribunal" approved by the Central Committee and the National People’s Congress Standing Committee’s “Decision on Several Issues Concerning the Litigation Procedures in Patent and Other Intellectual Property Cases" are implemented and the desired results achieved, thereby helping to enrich and further develop the China-specific intellectual property litigation system. These efforts are critical for increasing the robustness of a specialised intellectual property adjudication system, elevating the quality and efficiency of adjudication, unifying adjudication criteria, and serving China’s innovation-driven development strategy and intellectual property strategy. The Supreme Court has also worked on the drafting of judicial interpretations concerning the application of the unfair competition law and protection of trade secrets to address

international concerns. Two legal seminars on the judicial protection of trade secrets were convened separately in Nanjing and Shanghai to clarify the legal thinking with regard to adjudicating trade secrets disputes, so as to prepare for the eventual promulgation of the judicial interpretation on trade secrets.

• Enhancing judicial policies to accomplish tasks assigned by the National People’s Congress

The Supreme People’s Court issued the “Notice on Strengthening Judicial Protection of ‘Red Classics’ and the Lawful Rights of Heroes and Martyrs to Promote the Core Values of Socialism”； drafted the “Letter from the Supreme Court’s General Office on Incorporating Content Relating to ‘Strengthening Judicial Protection of Red Classics and the Lawful Rights of Heroes and Martyrs to Promote the Core Values of Socialism* upon the Amendment of the Copyright Law” and the “Report on Matters Relating to the Strengthening Judicial Protection of Red Classics” to underline the importance of protecting the legacy of red classics and the lawful rights of heroes and martyrs according to law. The above documents also advocate the importance of paying attention to taste, style and responsibility, with the aim of educating and guiding the general public, especially the youth, to consciously resist being “lowly, crude and tawdry”； warn against historical nihilism, and regulate broadcasting activities to protect

social and public interests.

The Supreme People’s Court also submitted the “Report on the Study and Implementation of the National People’s Congress Standing Committee’s Report on the Audit of Copyright Law Enforcement and its Deliberations and Opinions” as assigned by the National People’s Congress’ law enforcement audit. Based on the problems as identified from the law enforcement audit and the judicial practice, the report proposed practical corrective measures and opinions pertaining to matters such as substantive reduction of the cost of defending rights, reducing the long litigation period, increasing the amount of infringement damages.

• Actively participating in the revision, compilation research and drafting of laws

The courts have been active participants of in revision of laws and regulations, such as the Civil Code, Patent Law, Copyright Law, Law Against Unfair Competition, Trademark Law, and the Regulations for the Implementation of the Trademark Law and Regulations on the Protection of New Plants Varieties. Judicial policies developed and experiences accumulated from adjudication practice were promptly and specifically studied and assessed, and recommendations for amendments proposed.

A national symposium for selected courts was convened in Beijing

to discuss the amendment of the Copyright Law. Extensive and in­depth discussion were carried out, focusing on the classification of works, the rights included in copyright, copyright agreements, collective management, provisions on related rights, legal liability and coordination and alignment with international treaties and other laws. After thorough discussion, the “Supreme People’s Court’s Opinions on the Amendments to the Copyright Law” was submitted to the Ministry of Justice, and the document was highly commended, and the opinions contained within were well-received.

• Strengthening adjudication research and case guidance

Thematic forums on current and hot intellectual property issues. In November 2018, the Supreme People’s Court convened in Hangzhou, a symposium to solicit opinions and recommendations for the “Several Provisions on Evidence for Civil Procedure for Intellectual Property Disputes (Draft)”. The meeting participants conducted an investigative study on judicial interpretation of evidence in intellectual property civil litigation and studied the use of special procedure in intellectual property litigation.

Several other research studies were also initiated. The research study on malicious trademark registration was a response to the problem that has attracted international attention and serious social displeasure. Another research was conducted jointly with the State

Administration for Market Regulation (SAMR) Trademark Office to provide recommendations on the possible measures to deal with trademark squatting. To develop a better civil justice system to deal with monopoly matters, a research study on civil procedural issues relating to anti-monopoly disputes was initiated, so that the Anti-Monopoly Law could be better leveraged to curb monopolistic behaviour expeditiously. To commemorate the 10th year of promulgation of the Anti-Monopoly Law, the Supreme People’s Court organised a symposium to review the experiences relating to the adjudication of civil cases involving monopoly disputes, so as to pave the way for the revision of the Anti-Monopoly Law and the drafting of judicial interpretations, and that a fair and effective mechanism that conduces to market competition can be maintained.

Other areas of research include the study of the conflicts between industrial design and copyright, for which seminars were held in Beijing and Kunming, and the “Study Report on the Conflicts between Industrial Design and Copyright” was drafted to elucidate the similarities and differences and the conflict of rights, and from which practical adjudication guiding opinions could be generated. The study on the judicial protection of outcomes from innovative business models was another interesting attempt. On April 2018, the Supreme People’s Court’s Intellectual Property Judicial Protection Research Centre convened an assessment conference to deliberate and evaluate

the outcomes of the “Study on the Judicial Protection of the Outcomes of Innovative Business Models”. Leaders from the relevant agencies and experts and academics attended the conference to deliberate and assess the research project’s outcomes, and provided feedback, adjustments and revisions for the report.

The local courts also actively carried out research studies in different areas. On 20 April 2018, the Beijing High People’s Court issued the “Beijing High People’s Court Bench Book on Adjudicating Copyright Infringement Cases'： which specifically sets forth that when adjudicating copyright cases, judges should adhere to the basic adjudication principles of providing greater protection, of encouraging creation, of promoting dissemination and of balancing interests. By summing up the thinking behind the hearing of cases involving copyright infringement, the bench book provides useful guidance for the hearing of internet-related copyright disputes by the Beijing Internet Court and the adjudication of copyright disputes by other Beijing courts. The bench book is a valuable contribution to advancing development and innovation in Beijing’s cultural sector. Again, on 20 September 2018, the court published the “Opinions on Providing Judicial Protection for Strengthening the Development of a National Technological Innovation Centre in Beijing”： which sets forth adjudication rules and requirements for disputes involving innovation-based technologies and relevant cases, and lays out specific measures for overcoming obstacles stemming from institutions and mechanisms that hamper development of intellectual property adjudication.

In April 2018, the Guangdong High People’s Court published the “Operational Guidelines on Adjudicating Standard Essential Patent Disputes'； which looked in to the adjudication thinking and methodology behind disputes involving standard essential patents. “China Intellectual Property (English Edition)' and world-renowned specialised intellectual property media reported on the publication in great detail, providing penetrating interpretations of the Guidelines. It was encouraging to see Qualcomm Technologies and Huawei Technologies Co. Ltd selecting Guangdong Province as the choice jurisdiction for standard essential patent disputes.

The Shanghai High People’s Court issued the “Several Opinions on Strengthening Judicial Protection of Intellectual Property' to implement measures that make production of evidence convenient for the parties, that increase the amount of compensation, and that shorten the adjudication cycle, which was highly regarded by the society at large.

The Sichuan High People’s Court published the “Guidelines on Adjudicating Disputes Relating to the Infringement of the Right of Information Transmission in Networks' and the “Bench Book on Adjudicating Trademark Infringement Disputes” unify the adjudication criteria for all courts in the province.

To address the inconsistent standards used in determining electronic evidence submitted during intellectual property litigation, the Zhejiang courts developed a manual entitled “Examination and Determination of Electronic Evidence Relating to Intellectual Property Rights”.

The Shandong High People’s Court was highly productive, having completed the Supreme People’s Court’s major research project entitled “Research on the Intellectual Property Protection of New Forms of Innovation”，the “Research on Strengthening Judicial Protection of Intellectual Property。the “Research Report on the Anti­Monopoly Law of the People’s Republic of China’” and the research study on “Standard of Proof for Trademark Infringement Cases”

The Tianjin High People’s Court completed the Supreme People’s Court’s major research project entitled “Research on the Judicial Protection Strategy of Intellectual Property in China” and the judicial practice-based thematic research project entitled “Case Study on the Legal Regulation of New Types of Unfair Competition on the Internet”.

Leveraging the role of research bases and bolstering case guidance and case studies: After years of searching and learning, the People’s Courts have developed a unique “four-in-one” intellectual property case guidance system underpinned by typical cases, guiding cases, annual case reports and case-guidance research bases.

In April 2018, Tao Kaiyuan, Vice President of the Supreme People’s Court convened and chaired the Work Symposium of the Supreme People’s Court’s Intellectual Property Judicial Protection Research Centre cum Seminar on Theories of Intellectual Property Judicial Protection. In his speech, Justice Tao stressed the need to unify thinking and forge synergies in promoting the continued innovation and practical application of intellectual property theories and research methods, research perspectives and outcomes. Representatives from different theoretical study bases and research bases spoke at the symposium. This enabled the research centre to contribute to theoretical research in the judicial protection of intellectual property in the new era, and to leverage its theoretical research capabilities to contribute advice and suggestions.

The Supreme People’s Court reviewed the classic cases relating to the judicial protection of intellectual property, and compiled and published the Chinese and English versions of the “Collection of Classic Cases on the Judicial Protection of Intellectual Property in China” to make known the court’s achievements. The work has attracted broad interest. Also publishing soon is the “Supreme People’s Court Guiding Cases for Intellectual Property Adjudication

(Volume 10)”. Other publications include the "Analysis of New Challenges in Intellectual Property Judicial Practice: Hot Issues on Patents, Trademarks and Copyright。"Analysis of New Challenges in Intellectual Property Judicial Practice: Intellectual Property Judicial Protection and Industrial Development, "Interpretations and Applications of Intellectual Property Judicial Interpretations (Updated Edition)”. Through its monthly publication "Trends in Intellectual Property Adjudication” and work reporting, the Supreme People’s Court has developed a regular guidance and communication mechanism with lower level courts.

In December 2018, the Chongqing High People’s Court edited and published the 7 th edition of its "Research on Intellectual Property Adjudication in China'； comprising 52 articles and totalling 650,000 words. As a continuous publication by the Judicial Theory Committee and an important series under the Chinese Judicial Theory series, this is a highly influential publication. The Chongqing High People’s Court also jointly organised with the Southwest University of Political Science & Law the "China Intellectual Property Judges’ Forum”. Four forums were held in 2018.

In March 2018, the Guangxi High People’s Court published the "Collection of Written Judgments on Typical Intellectual Property Cases by Guangxi High Court (2011 to 2016)” targeting at intellectual property judges, and developed the “Guidelines on Adjudicating Design Patent Infringement Disputes” to provide standard yardsticks for deciding disputes involving the infringement of design patents.

1. Increasing judicial transparency and promoting fair and
   efficient justice

In 2018, intellectual property adjudication for the People’s Courts implemented the CCP Central Committee’s decisions and plans to deepen reforms comprehensively and to govern according to law comprehensively, and to fulfil the important tasks of promoting open justice and developing an open, dynamic, transparent and convenient sunshine justice mechanism. The courts’ efforts produced positive results.

• Intensifying publicity for greater judicial impact

In conjunction with the World Intellectual Property Day’s theme of “Powering Change: Women in Innovation and Creativity” to celebrate the brilliance of the women who are shaping the world’s intellectual property landscape, the Supreme People’s Court organised the “Symposium on Intellectual Property for Women” on 27 April, which aimed to reflect on how women in the intellectual property sector of the new era could transform their intelligence and

sense of responsibility into the power of innovation. Discussions at the symposium revolved around Xi Jinping’s thoughts on Chinese socialism for the new era and the tenets of the Party’s 19th Congress, where NPC deputies, representatives from the All China’s Women’s Federation and Women’s Judges Association, women in technological innovation within intellectual property sector, women academics, female journalists and women judges from different courts gathered at the symposium to share insights and their aspirations and missions for their intellectual property careers of the new era. Vice President Tao Kaiyuan gave a key note speech entitled “Inner and Outer Cultivation, with gentle justice and judicial wisdom, give every passion and affection to the great journey of reform and innovation”. An MV of the “Intellectual Property Song" was played at the symposium. Written by Vice President Tao, the lyrics express the voice, mission and noble sentiments of the intellectual property fraternity and are deeply moving.

The Jiangsu courts continued to maintain and operate their WeChat official account, the “Jiangsu Intellectual Property Perspective (Jiangsu Zhichan Shiye^f)^ff to increase their influence within and outside the intellectual property adjudication sector. Special columns in professional intellectual property media, such as the Jiangsu High People’s Court’s Sina Weibo and WeChat official accounts were run, publishing regularly information on complex and difficult cases

heard and concluded by the different courts within the province for prompt dissemination of the latest news on intellectual property judicial protection and increase the courts’ impact in intellectual property adjudication within and outside the Jiangsu Province. Since establishing the “Jiangsu IP Vision (Jiangsu Zhichan Shiye)” on WeChat, more than 170 typical cases and nearly 10 articles were published in 182 editions, and the results were encouraging.

• Elaborating reports presented at the National People’s Congress (NPC) and Chinese People’s Political Consultative Conference (CPPCC) (“two conferences”)and live telecast of interviews by all media

During the period of the “two conferences'； to respond to the people’s interest and concern in intellectual property adjudication, the Supreme People’s Court participated in an interview which were telecasted live on all media on 16 March 2018, focusing on the key points noted in the “Supreme People’s Court Work Report''. The invited guests were chief judge Song Xiaoming and deputy chief judges Wang Chuang and Lin Guanghai, who spoke about issues relating to “leveraging the courts as the main channel for protecting intellectual property". Another invited guest was Justice Song Yushui, Vice President of the Beijing Intellectual Property Court, who was interviewed via online video-conferencing.

The interview focused on Chief Justice Zhou Qiang’s work report, revolving around five main points: the People’s Courts leveraging their intellectual property adjudicatory functions to serve and secure the national strategy of innovation-driven development; increasing oversight and guidance and ensuring consistency in law-application; deepening judicial reform of the intellectual property regime to build a more robust system of adjudication; increase judicial transparency and exchange to elevate China’s international influence in the judicial arena; strengthening development of the intellectual property adjudication team to raise their adjudication capabilities and standard. Detailed figures were quoted, and the observations of the guest commenters were enlightening. The comprehensive sharing of the progress of intellectual adjudication during the past five years and the extensive, multi-dimensional and thorough elaboration of what “leveraging the courts as the main channel for protecting intellectual property” indicated in the “Supreme People’s Court Work Report” means was telecasted live by more than 30 media, and generated positive and enthusiastic public response and social effect.

• Organising thematic activities for “26 April” World Intellectual Property Day and bringing the publicity campaign to a climax

The Supreme People’s Court has celebrated the "26 April” World

Intellectual Property Day since 2009. Its focus has always been on the theme of open justice, as it continues to draw attention to the latest topics and highlights of judicial protection of intellectual property. This is also an excellent opportunity to review and improve on the means and methods of doing publicity on the judicial protection of intellectual property. During the past nine years, our courts have learned and evolved in the way they organise intellectual property outreach programmes, which are now increasingly systematic and up-scaled, creating an excellent brand effect.

Vice President Tao Kaiyuan shared at the press conference of the 2018 Intellectual Property Outreach Week, the overall results achieved by the People’s Courts in 2017 in terms of intellectual property protection and the highlights of their innovative outcomes. Several publications were also released during this time, including the “Intellectual Property Protection by Chinese Courts in 2016” (Chinese and English versions), “Ten Major Intellectual Property Cases and Fifty Typical Cases Adjudicated by China’s Courts in 2016。and the “Supreme People’s Court Annual Report of Intellectual Property Cases (2017)” More than 20 media attended and reported the press conference, and enthusiastic responses and comments generated. The local courts also organised various “26 April” outreach activities based on local circumstances and needs.

• Enhancing open justice to ensure impartial justice

The courts have made significant efforts to publish written judgements, where they actively explored new avenues on the mobile internet environment to promote open justice, and have used extensively platforms such as China Judgements Online (wenshu. court.gov.cn), China Judicial Process Information Online (https:// splcgk.court.gov.cn/gzfwww/) and China Court Hearing Online (tingshen.court.gov.cn/) to build an information-based, data-driven and detail-oriented intellectual property open justice system and to increase the transparency of adjudication. Written judgements appropriate for public access are uploaded on the websites promptly and fully, and updates on their online availability announced regularly. Over time, the scope of such public access will increase and the efficiency of providing accessibility will improve. The written judgements of the Supreme People’s Court Intellectual Property Division are 100% available online.

Advancing public access of the hearing process and online case operations is another area of focus. The courts have improved their management of the adjudication process for intellectual property cases and furthered the development of technology courts to promote adoption of contemporaneous audio- and video-recording and live streaming of the hearing process. New and innovative ways

of open hearing are created, and the scope of open hearing expanded to ensure that the parties can exercise their right to know and right to supervise. Promoting greater use of smart technology has empowered open justice and improved adjudication and efficiency.

The Anhui courts have leveraged the three major open justice platforms to enable online access of written judgements and live streaming of court hearings as much as possible, where appropriate. The Haozhou Intermediate People’s Court have organised open hearings for ten thousand citizens, where people from different sectors were invited to observe the court proceedings when intellectual property cases were heard. For cases suitable for circuit court hearing, the Tongling Intermediate People’s Court would deploy judges to the location of the defendant’s principal establishment, shopping mall or places as such to conduct hearings and face-to-face legal outreach and education.

1. Organising exchanges and cooperation and serving
   broader national and international interests

The intellectual property legal regime draws strength from international commonalities and responses to interactive effects from different regimes. The People’s Courts must actively engage in

international and regional intellectual exchanges and cooperation, and must establish and improve its communication and exchange mechanisms for sharing information on judicial protection of intellectual property to facilitate deeper and objective understanding of the complete set-up of China’s intellectual property judicial protection regime by the different countries. China works to elevate its participation, discourse power and the flexibility to respond to its advantage to changes and challenges, and gives priority to building an environment conducive to trade and investment and creating the image of a responsible power.

• Strengthening international and regional collaboration and exchange

Strengthening international judicial cooperation and exchange: The People’s Courts attaches great importance to strengthening exchanges with international organisations and countries around the world, and to showcasing the results of judicial protection of intellectual property in China and the abilities and accomplishments of Chinese intellectual property judges.

In November 2018, at the invitation of WIPO Director-General Francis Gurry, Vice President Tao Kaiyuan led a delegation for WIPO’s inaugural Intellectual Property Judges Forum in Geneva and her first meeting of with the WIPO Advisory Board of Judges. Delivering the

only key note address at the forum, Justice Tao spoke on the topic “Steadfast in providing judicial protection of intellectual property; working together to create a great future for intellectual property”. Her inspiring address received a positive and enthusiastic response from the audience, and key excerpts of her speech is quoted on WIPO’s website. WIPO and Director-General Gurry expressed their strong support and great recognition for China’s work on intellectual property. The visit provided opportunity for China to share its historical achievements in the judicial protection of intellectual property and to respond to respond to issues of concern, and in doing so, garner maximum understanding and receptiveness of China’s specificities in intellectual property protection from the international community. It was also an excellent platform which China used to make itself heard, contribute the Chinese wisdom and Chinese formula.

The EU-China Anti-Monopoly Judicial Seminar convened in Beijing. Co-organised by the Supreme People’s Court and European anti­monopoly agencies, the seminar was attended by President of the General Court (EGC) of the Court of Justice of the European Union Marc Jaeger, Judge Schwarcz, European anti-monopoly agencies, and China representatives from the EU Commission. During this period, Vice President Tao Kaiyuan and Chief Judge Song Xiaoming met with EGC President Jaeger and his delegation. In addition, the European Union Chamber of Commerce in China today released its “European Business in China-Position Paper”； which highly commended China for establishing intellectual property courts.

The Supreme People’s Court also send representatives to participate in the Inaugural U.S.-China Digital Economy Forum, 140th Annual Meeting of the International Trademark Association, Symposium on Intellectual Property Advanced Seminar for ASEAN+3 2018, the 8th OECD/KPC Competition Workshop for Asia-Pacific Judges, 8th OECD/KPC Competition Workshop for Asia-Pacific Judges and the ICC Commission on Intellectual Property (Fall Conference). It also continued to participate in the negotiations of the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, and was involved in the 4th Special Commission meeting.

Cooperation with Europe continued to be very close, as the court also sent representatives to participate in the 21th meeting of the EU- China IP Working Group. Both China and Europe agreed to strengthen their intellectual property dialogue and to deepen cooperation in intellectual property protection. In November, under the China-EU IP Cooperation Project “IP Key China””, a delegation of intellectual property judges from China went on study visits to Germany, Belgium and Luxembourg. This was a programme aimed at fostering

exchanges with the intellectual property-related policy-makers and judiciaries of European authorities to help them understand the level of judicial protection given to intellectual property in China and China’s position of giving equal protection to local and foreign rightsholders, which will give China greater international influence. It will also help us learn and adapt advanced legislative and judicial experiences to further strengthen our intellectual property adjudication system and develop more robust intellectual property protection systems and mechanisms, which will elevate our professional competence in intellectual property adjudication.

Strengthening inter-judicial cooperation and exchange: First, mutual visits and exchange with Hong Kong and Macao. In October 2018, Vice President Tao Kaiyuan led a delegation of eight to visit the Hong Kong Court of Final Appeal and the Court of Final Appeal of Macau at their invitation. This was the first time that mainland and Hong Kong judges held a seminar on the topic of adjudication in Hong Kong. The discussions have enabled the judges from both sides to resonate in many areas as men of the law. The delegation also visited judiciaries in Hong Kong SAR and Macao SAR to confirm the mutual visit mechanism for their judges, as well as participated in intellectual property adjudication seminars in Hong Kong and Macao. The "Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the

Mainland and of the Hong Kong Special Administrative Region” signed with Hong Kong’s Legislative Council provides for the recognition and enforcement of intellectual property-related civil judgements and serves the development of the Guangdong-Hong Kong-Macau Greater Bay Area.

Second, mutual visits and exchange with Taiwan. Between 15 and 21 May, Chief Judge Song Xiaoming visited Taiwan in the capacity of executive director of the China Association of Judges under the invitation of the Taiwan Law Society. The 12-person delegation visited the Taiwan Intellectual Property Court to study the set-up and operations of the specialised court, and other systems relating to the judicial protection of intellectual property, such as “three-in-one” adjudication and technology investigators. With the joint efforts of all members of the delegation, the study visits and exchanges yielded positive results and met the objectives of the trip. On 13 December; Justice Song met with Justice Sung-Mei Hsiung from the Taiwan Intellectual Property Court, who was invited to visit by the China Association of Judges. Both sides discussed intensively on issues such as punitive damages, patent litigation agent, and the source and makeup of technology investigators.

• Organised master class on intellectual property adjudication to strengthen cooperation with WIPO

Organised as a collaborative effort between the Supreme People’s Court and WIPO, the inaugural “Master Class on IP Adjudication" was held on 21-23 August 2018 at the National Judges College in Beijing. This judicial training was the most important and the highest level, and where the discussion topics of which were the most in-depth. Chief Justice and President of the Supreme People’s Court Zhou Qiang specially met with Deputy Director-General of WIPO Wang Binying, Legal Counsel and head of the WIPO legal team Frits Bontekoe, and representative of the students and instructors of the master class. The class consisted of 7 lectures, 24 formal students and 15 observers from China, the United States, Germany, Australia, Belgium, Korea, Singapore, the Philippines, Vietnam, Thailand, Moldova, Brazil, Latvia, Malaysia and South Africa. More than 40 judges from 15 countries gathered here to learn and share, using English as the only language of communication.

Chief Justice Zhou noted that China’s courts engage closely with WIPO and collaboration between them has been fruitful. The success of this master class is a major outcome of this collaboration, and is instrumental in encouraging the judges from different countries to engage with each other more, and in facilitating judicial protection

of intellectual property in different countries. This success also marks the advancement of the cooperation between the Supreme People’s Court and WIPO to new heights, and opens up avenues for making known to the world China’s achievements in the judicial protection of intellectual property, and with widened international exposure, China’s intellectual property judges will truly become more international in their legal knowledge and perspectives.

1. Enhancing judicial capabilities and strengthening
   character-building for judges

Solid and sound training has always been the cornerstone of intellectual property adjudication for the People’s Court. The intellectual adjudication team of the courts of every level must have the initiative to adopt a higher political stance and to elevate their professional qualities and competence. The courts must also apply themselves to building an intellectual property adjudication team that is steadfast in political belief, that has the sense of totality, that is well-versed with the law and technically-skilled, and that possess an international perspective, so as to provide strong organisational underpinnings for the adjudication of intellectual property in the new era.

(1) Intensifying development of ideological and political thoughts to elevate the level of thinking and political calibre

The Party’s political development is a fundamental development. Intellectual property judges must appreciate the full importance of the Party’s political development to the People’s Courts’ development, uphold the absolute leadership of the party, and stay determined and unwavering in their political belief. They must develop greater political awareness, improve on their political qualities and capabilities, and strengthen their political conviction, and they must adhere strictly to political discipline and political rules.

In early 2018, a talkfest whose theme was “Glory and Dream, Mission and Responsibility" was held at the Beijing Intellectual Property Court. Vice President Tao Kaiyuan shared her emotion affinity, ideal and pursuit with regard to intellectual property rights, and elicited strong resonance among the cadre police officers.

In June 2018, a Party Day activity under the theme “In pursuit of Yan’an’s footprint, uphold the Yan’an Spirit" was held in the old revolutionary base of Yan’an. The party members felt deeply enlightened. Between October and December, the “Photography Exhibition Celebrating the 40th Anniversary of Reform and Opening- up" was held, where brilliant photo images gave vivid expression to the work of intellectual property judicial protection, the devotion of the adjudication team, and the inspiring ethos and energy.

(2) Strengthening training on adjudication operations to improve on the judicial capabilities of in adjudication

The “Opinions on Several Issues concerning Strengthening Reform and Innovation in Intellectual Property Adjudication" specifies the need to devote great effort to develop the intellectual property adjudication team into a “formalised, specialised, professionalised and internationally savvy" team. A high-calibre team of judges is essential for sustaining the development of intellectual property judicial operations. In 2018, the Supreme People’s Court organised more than thirty sessions of intellectual property training at the National Judges* College and the local courts. The court also organised three sessions of the “Expert Lecture Series for the Party Branch of the Intellectual Property Divisions'； focusing on topics such as the application of law in patent examination, criminal adjudication of intellectual property infringement, trademark protection in a digital environment, legal liability of network service operators, which was very well-received by the participants.

The local courts also conducted training. To improve the professional capabilities of intellectual property judges, for example, the Fujian High People’s Court, organised a training on adjudication skills for sixty trainees between 14 to 23 August 2018 at the East China University of Political Science and Law.

• Strengthening party ethics and government integrity to ensure that the team is clean and honest

In 2018, the intellectual property divisions of all the courts have followed through with the requirement to enforce strict governance on the party, the court, the division and in management, and has dedicated much effort to developing good conduct and discipline within the intellectual property adjudication teams, focusing on correcting the “four problematic habits (sifeng)^,f: formalism, bureaucratism, hedonism and extravagance, and on striking problems that elicit strong public reaction. Checks and corrective actions are taken promptly, regularly and persistently.

The different levels of adjudication divisions are also committed to educating and guiding cadre police officers on judicial conscience and to enforcing rigorous discipline on judicial behaviour as part of a continuous process to improve judicial conduct. Greater prevention and control measures have also been instituted to guard against the risks of judicial dishonesty. Another area that has been given urgent attention is the development and improvement of management and supervision mechanisms that accommodate the new mechanism for exercising adjudication powers, and that support the judicial accountability system. Finally, the courts also take rigorous action in investigating and punishing fraudulent and adjudication-for-gain behaviour. Strict and determined measures are imposed to eradicate rotten apples to ensure that the action and stringency are indeed genuine, undeterred and sustained.

Conclusion

In 2019, we celebrate the 70th year of the founding of the People’s Republic of China. But 2019 is also the critical year for achieving the building of a “complete xiaokang” society and the first Centenary Goal, and the first year of the People’s courts’ fifth Five-Year Reform Programme. As we usher in a new chapter in history, the People’s Courts face an exciting future with higher demands and a people with higher expectations. Enabling the courts to serve the larger good, and enabling justice to be done for the people and done impartially are tasks that are increasingly laborious and onerous.

The new era is for go-getters. And the answers are for us to give. Judicial protection of intellectual property by the People’s Courts will adhere to the path of Chinese socialism for the new era as propounded by President Xi Jinping. The courts will discern and manage the key social contradictions and changes in the new era,

and concentrate efforts on enhancing the judicial abilities and performance in intellectual property. They will reinforce the sense of crisis and of responsibility, and take effective precautions against risks and challenges. All are determined to transform and innovate, and to fulfil their undertakings to scale greater heights in the building of a law-based China, and to give rightsholders a greater sense of gain, of happiness and of security. These efforts will contribute to making China a global powerhouse in intellectual property and in science and technology, to providing effective judicial safeguards for the continued robust development of the economy, and to achieving notable results for the celebration of the 70th year of the founding of the People’s Republic of China.

Introduction

General Secretary Xi Jinping emphasized that innovation is the primary force propelling development, that protecting intellectual property rights (IPRs) protects innovation, and that the rule of law for intellectual property (IP) protection should be strengthened. In September 2021, the Central Committee of the Communist Party of China (CPC) and the State Council released The Outline for Building an Intellectual Property Powerhouse (2021-2035) for the purposes of advancing the building of an IP powerhouse in an overall manner, comprehensively improving IP creation, use, protection, management and services, and maximizing the critical role of the IP system in the socialist modernization.

In 2021, people’s courts adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and thoroughly implemented Xi Jinping Thought on the Rule of Law. The courts earnestly implemented General secretary Xi Jinping’s important elaboration of enhancing the IPRs protection, acquired a deep understanding of the decisive significance of the two establishments of both Comrade Xi Jinping core position on the Party Central Committee and in the Party as a whole and the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; boosted four consciousnesses of the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment with the central Party leadership; stayed four self-confidence in the path, the theory, the system, and the culture of socialism with Chinese characteristics; upheld General Secretary Xi Jinping’s position as the core of the CPC Central Committee and the whole Party, as well as the authority of the CPC Central Committee and its centralized, unified leadership. People’s courts were relentlessly in their pursuit of “Striving to Make People Perceive Fairness and Justice in Every Judicial Case”： accurately grasped the overall requirements for strengthening the IP adjudication in the new era. The professional adjudication system was largely established, the capacity for professional adjudication was significantly increased, and the level of judicial IP protection was substantially enhanced. People’s courts have provided strong judicial service in coordinating pandemic prevention and economic society development. Satisfaction with IP trials has increased in recent years, the entire society gradually strengthened an awareness of the importance of respecting and protecting IPRs. The global reach of China’s IP adjudication has continued to expand.

1. Significant Increase of Cases and Continuous
   Improvement in Trial Quality and Efficiency

In 2021, people’s courts adjudicated all types of IP cases in an impartial and efficient way in accordance with the law. A total of 642,968 IP-related cases were accepted by people’s courts, including first and second instance cases and as well as apply-for-retrial cases, and 601,544 cases were concluded (including carried over cases, ditto hereinafter) representing a respective year-on-year increase of 22.33% and 14.7%.

• Quantity of Each Type of Cases

The Supreme People’s Court of China (SPC) accepted 4,243 IP cases and concluded 3,557, up by 22.28% and 9.11% respectively on a year-on-year basis. Local people’s courts at all levels accepted 550,263 cases in the first instance and concluded 515,861, up by 24.12% and 16.52% respectively from 2020. Among them, 31,618 patent cases were accepted, with a year-on-year increase of 10.98%, 124,716 trademark cases, up by 59.62%, 360,489 copyright cases, up by 14.99%, 4,015 technology contract cases, up by 22.52%, 8,419 competition-related cases, up by 78.26%, and 21,006 other civil disputes over IPRs with a year-on-year increase of 38.01%. Local people’s courts at all levels accepted 49,084 cases of the second instance and concluded 45,468, up by 14.22% and 4.5% respectively on a year-on-year basis.

The SPC accepted 2,852 administrative cases on IPRs and concluded 2,487, up by 49.4% and 43.34% compared with those of 2020. Local people’s courts at all levels accepted 20,563 administrative cases of first instance on IPRs, and concluded 19,342, up by 11.37% and 7.80% compared with 2020 respectively. Among them, 1,810 administrative cases on patent were accepted, with a year-on-year increase of 27.73%; 18,734 administrative cases on trademark, up by 9.97%; and 19 on copyright cases with an increase of 7 cases. Local people’s courts at all levels accepted 8,215 administrative IP cases of second instance and concluded 7,418, up by 34.85% and 19.97% respectively from 2020. Among them, 5,636 cases were sustained, judgments of 1,597 cases were reversed, 1 case remanded for retrial, 145 cases withdrawn, 11 cases dismissed, and 28 cases resolved in other means.

Local people’s courts at all levels accepted 6,276 first-instance criminal cases of IPRs infringement and concluded 6,046, up by 13.2% and 9.53% respectively on a year-on-year basis. Among them, 5,869 trademark infringement and 333 copyright infringement cases were accepted, an increase of 12.8% and 9.54% respectively. Among these first-instance criminal cases, there were 2,558 cases of counterfeiting registered trademarks, up by 13.19%; 2,623 cases of selling goods with counterfeited registered trademarks (up by 3.76%); 476 illegally manufacturing or selling illegally manufactured logos of registered trademarks (up by 20.51%); 313 criminal cases of copyright infringement (up by 14.65%); 15 criminal cases of selling infringing copies (increase by 2); and 61 criminal cases of trade secret infringement (increase by 16). Local people’s courts at all levels accepted 1,050 second-instance criminal cases of IP infringement and concluded 997, up by 20.83% and 16.74% respectively.

• Features of Cases

The following are the primary characteristics of IP cases received by people’s courts.

Internet-related cases on a continuous rise. China’s Internet industry has developed rapidly. Internet has become one of the most predominant areas that IP infringement occurs, and therefore IP infringement violations on the Internet has become the focal point of the IP judiciary gradually. In 2021, the three Internet courts in Hangzhou, Beijing and Guangzhou accepted a total of 66,148 new cases involving various types of Internet IPRs, an increase of 6.64% over the previous year. The number of Internet cases has steadily increasing year by year, and more legal issues involved are novel, complex, and perplexing. In the Internet environment, infringements are easier to commit, which are more concealed and complicated. While the impact is greater; gathering and fixing evidence is harder. Consequently, the difficulty of right holders’ ability to defend their rights is also rising. Strengthening the rule of law in cyberspace and ensuring the protection of innovation and creativity on the Internet is critical for the judicial protection of IPRs for people’s courts.

New types of disputes in proliferation. Innovation is critical to China’s overall modernization development. In recent years, the booming new technologies, new business forms and models have injected new momentum into the economic and social development, brought new legal issues as well. The number of new- type cases involving core Internet technologies, gene technologies, communications, integrated circuits, artificial intelligence, Internet platform economy, etc., continues to grow, complicating the determination of complex technical facts and the application of laws, poses new challenges to judicial decisions on the boundary of rights and the determination of liability for the IPRs infringement in these new business fields and forms. However; people’s courts have actively responded to judicial demand for IPR protection in new technologies, new industries, new business forms and models, and proactively explored ways to strengthen the judicial IPR protection rules in relevant fields. In 2021, people’s courts have adjudicated a batch of new-type IP cases involving biomedicine, online gaming, live webcast, “Big data-enabled price discrimination against existing customers'： sharing economy, artificial intelligence, etc., and all of which sparked widespread public concern.

Cases Involving Public Interests Increased. The interests involved in IPRs are complicated and often closely related to the social and public interests. The trial of cases needs to balance the protection of individual rights and public interests, to accurately grasp differentiated value orientation and to properly handle the relationship between development and security even better. In 2021, in the areas such as administrative granting and reviewing, civil infringement and competition order maintenance, people’s courts heard a number of cases involving malicious trademark registration, the application of “Notice-and-Delete" Rule, fan works, etc. in order to keep the balance between private and public interests.

Expanding protection in criminal cases. In recent years, interlocked civil and criminal cases have brought up many problems in application of law, such as IP infringement crimes using technologies such as deep linking and game plug-ins are constantly emerging. The Criminal Law's Amendment (XI), effective as of March 1, 2021, has made major revisions for the crime of IP infringement and strongly supported further judicial IP protection improvement. By following the requirement of “improving criminal laws and judicial interpretations, intensifying criminal crackdown” put forward by General Secretary Xi Jinping, people's courts adhered to the principles of “No Penalty without A Law” and “Strict Protection。punished crimes such as counterfeiting registered trademarks, copyright infringement, trade secrets infringement, as well as producing and selling fake seeds in accordance with the law. By strongly protected the legitimate rights and interests of right holders and consumers, a sound market order is effectively maintained. In 2021, the number of criminal cases of IP infringement accepted and concluded by local people's courts at all levels rose rapidly, and the deterrent and preventive functions of criminal penalties in punishing IP infringement and counterfeiting became increasingly prominent.

1. Enhancing the Protection of Science and
   Technology Innovation to Serve the Innovation-driven
   Development

Innovation is the primary driving force for development and the essential condition for implementing new development concepts, establishing new development patterns and promoting high-quality growth. People’s courts have emphasized the role of IP adjudication in stimulating scientific and technological innovation, and stove to ensure that the protection of IPRs is proportional to the extent of its technological contribution. People’s courts are constantly synthesizing and refining rules governing the judicial protection of scientific and technological innovation in order to foster continuous innovation of technology and industrial upgrading.

• Improving Quality and Efficiency of Adjudication

People’s courts hearing numerous IP cases in accordance with the law. By formulating judicial interpretations and judicial policies, and issued guiding cases, gazetted cases and annual cases, the courts effectively strengthened trial guidance, standardized the criteria for adjuration, facilitated the unification of administrative law enforcement and adjudication standards, and maintained a consistently high level of trial competence. The SPC promulgated the Provisions on Several Issues concerning the Application of Law in Civil Cases of Patent Rights Relating to Pharmaceutical Products Applied for Registration, focusing on the procedural issues that must be resolved following the implementation of the patent linkage system for pharmaceutical products, particularly the interaction and cooperation between litigation procedures and administrative procedures of pharmaceutical products evaluation or approval, as well as the procedure of administrative decision. It established clear guidelines for the timely and impartial trial of relevant cases, as well as institutional incentives and judicial guarantees for the pharmaceutical industry’s independent innovation and high- quality development. The SPC also issued the Several Provisions on the Specific Application of Law in the Trial of Cases Involving Disputes over Infringement upon Rights of New Plant Varieties (II), and released the first series of typical cases of judicial IP protection in the seed industry tried by people’ s courts. The SPC summarized recent judicial practices in recent years, effectively implemented the Seed Law, strengthened the protection of plant variety rights, stimulated innovation in breeding and safeguarded the scientific and technological self-reliance of the seed industry. These initiatives have enhanced the judicial protection of IPRs in China’s seed industry, and created a sound legal environment for the revitalization of the seed

industry.

After three years of pilot operation, the SPC’s IP Court accepted 9,368 technical cases and concluded 7,625, which involving patent, new plant variety and layout design of integrated circuit. 4,335 were accepted and 3,460 were concluded in 2021. Among them, over a quarter of cases involved strategic emerging industries such as new generation information technology, biomedicine, high-end equipment manufacturing, and energy conservation and environmental protection. In January 2022, the China Association for Science and Technology, the China Society of Law, respectively completed the third-party assessments of the SPC’s IP Court pilot program. Each assessment concluded that the pilot program was properly focused and effective in achieving the CPC’s stated objectives of its establishment, further improving the appellate trial mechanism for IP cases at the national level, and vigorously promoting unification of adjudication standards and improvement of trial quality and efficiency of technology-related cases. On 27 February, 2022, Justice Zhou Qiang, President of the SPC, briefed the Standing Committee of the 13 ^th National People’s Congress on the implementation of the Decision on Several Issues concerning Judicial Procedures for Patent and Other Intellectual Property Cases, which got the full affirmation by the Standing Committee after deliberation.

• Reinforcing the Protection of Original Innovation

People’s courts strengthened the review of legality of administrative acts over patent grant and confirmation in order to improve the quality. People’s courts correctly adjudicated IP cases of high-tech fields such as 5G technology, biomedicine, high-end equipment manufacturing, new materials and new energy, and thereby sparked scientific and technological innovation. Additionally, the courts strengthened IP protection in emerging fields, fairly adjudicated cases involving the sharing economy, artificial intelligence, big data, cloud computing and other new-type IP cases, clarifying protection rules and rights boundaries, guiding the healthy and orderly development of new technologies, new forms and models of business along the rule of law’s path. The SPC, in the invalidity cases of invention patent involving “magnetic resonance imaging” and “traditional Chinese medicine (TCM) sorting machine”, interpreted the claims in a scientific and reasonable manner, upheld the validity of the patent, serving and safeguarding the fight against COVID-19 according to the law; in patent ownership cases involving “high-temperature microwave expanding furnace'： “fingerprint identification'： the criteria for determining disputes over the ownership of on-duty inventions were clarified to stimulate innovation and creativity among scientific researchers and protected the legitimate rights and interests of scientific and technological innovation subjects in accordance with the law; in the variety rights cases involving rice “Jinjing 818” and corn “Longping 206'； the SPC strengthened the IPR protection and promoted self­reliance and self-improvement of the seed industry; the SPC also studied and formulated the guiding opinions on strengthening the criminal trial involving seeds, punishing seed-related crimes in conformity with the law, and accelerating the revitalization of the seed industry. Furthermore, the SPC hosted a symposium on the judicial protection of IPRs in TCM in terms of preserving rightfulness, innovation and inheritance. Jiangsu High People’s Court and five provincial authorities jointly selected top 34 enterprises from key development industry chains, and provided help to them in the technology research. Henan High People’s Court issued 20 measures aimed at comprehensive strengthening the judicial protection of IPRs, particularly in emerging fields such as artificial intelligence and biomedicine. Fujian Fuzhou Intermediate People’s Court issued the Implementing Opinions on Strengthening the Judicial Protection of Intellectual Property Rights of Key Enterprises in Technology-Intensive Industries (for Trial Implementation), responding actively to the judicial demand for IPRs of high-tech enterprises.

• Strengthening Registered Trademark Protection to
  Assist the Construction of Brand Power

People’s courts have strove to improve the quality of the administrative cases of trademark granting and reviewing, resolutely crack down on malicious trademark registration not for the purpose of trademark use, and promote a normal and regulated trademark application and registration order. People’s courts also have strengthened the protection of well-known trademarks, and severely punished trademark attachment, counterfeiting and other “free­riding^ activities. The courts scientifically and reasonably defined the boundary of trademark rights and the scope of protection, enhanced the role of trademark usage in determining the protective scope of trademark rights, and actively guided the right holder to consistently and practically use the trademark to bring into play the identification function of the trademark and protect the legitimate rights and interests of consumers.

• Safeguarding the Trademark Registration

The SPC and several local people’s courts collaborated with the National Intellectual Property Administration to hold seminars on trademark registration and reviewing cases to exchange views with the goal of quality improvement. The SPC resolved a number of administrative trademark cases according to the law, and further consummated the recognition standards for “distinctiveness” in trademark registration applications. Based on the actual circumstances, Beijing IP Court formulated the Implementing Plan for Promoting the Reform of Split-flowing Simple and Complex Administrative Proceedings (for Trial Implementation), which made an attempt to improve the rules on the application of simplified procedures for trademark administrative proceedings and the application of electronic litigation to split-flow the trademark administration cases in respect of the complexity, significance and duration of trial. Jiangsu Suzhou Intermediate People’s Court advocated for the establishment of a whole-process mechanism to combat malicious trademark registration in trademark infringement cases.

• Regulating the Use of Registered Trademarks

People’s courts continued to intensify the punishment on trademark infringement and strengthen the judicial protection for well-known trademarks, traditional brands and time-honored brands. Zhejiang High People’s Court organized special campaigns and released typical cases on brand protection. Xinjiang Tacheng Intermediate People’s Court coordinated the Municipal Administration for Market Regulation to strengthen inspection and regulation to fundamentally curb the highly frequent trademark counterfeiting crimes from the source. Sichuan Chengdu Intermediate People’s Court transferred relevant trademark infringement clues to administrative authorities, and promoted the practice of determining the administrative penalties in trademark infringement cases by referring to the civil infringement case standards to reduce the quantity of similar IP disputes. Local people’s courts of different jurisdictions also emphasized the deterrent effect of punitive damages and criminal sanctions on trademark infringement. Courts in Guangdong Province awarded treble punitive damages in 2 trademark infringement cases, with damages of RMB 10 million and RMB 30 million respectively; and a court in Guizhou Province and a court in Heilongjiang Province imposed a fine of RMB 21 million and RMB 21.25 million respectively in two trademark counterfeiting cases.

• Actively Responding to Social Concerns

With the increasing judicial protection of registered trademarks, in particular the increasing amount of damages awarded the abuse of trademark rights, in a malicious or fraudulent manner, often occurred. These incidents have caused serious disturbances to the normal production and operation of micro, small and medium enterprises (MSMEs) and self-employed individuals which have aroused great social concern. The SPC timely held a question-and- answer session on the judicial protection of geographical indications of Tongguan Roujiamo (the brand of the steamed meat roll named after Tongguan) and Xiaoyao Town Hulatang (the brand of the spicy soup originally made in Xiaoyao Town), and resolving ambiguities to guide judicial practice, protect geographical indications, and severely punish malicious litigation, thereby achieving positive social effects. The Sichuan courts handled the “Green Pepper” trademark disputes expeditiously and in accordance with the law, preserving the order of trademark usage, clarifying the boundary of trademark rights, and ensuring legitimate use and honest operation.

1. Improving Copyright Protection to Accelerate the
   Construction of Strong Cultural Power

Based on judicial function, people’s courts have vigorously promoted core socialist values while fully executing the leading and guiding function of copyright adjudication for outstanding culture. The courts have strengthened the protection for culture creators* rights and interests, safeguarded the legitimate rights and interests of those who distribute their works legally, and continuously improved the copyright protection in respect of traditional culture and traditional knowledge to boost the healthy development of cultural industry.

• Carrying forward Socialist Core Values

People’s courts at all levels protected the inheritance of red classics and the legitimate rights and interests of heroes and martyrs, regulating the order of cultural dissemination, guiding the public to consciously resist historical nihilism, incivilization, vulgarity and kitsch, strengthening IPRs protection such as genetic resources, traditional culture, traditional knowledge and folk literature, and promoting the collation and utilization of intangible cultural heritage and the creative transformation and innovative development of Chinese excellent traditional culture. Beijing IP Court concluded the copyright infringement dispute over acrobatic works to strengthen the protection of traditional acrobatic works. Shijingshan Primary People’s Court in Beijing conducted a special research on 4 types of disputes over IPRs which involved the infringement of the Winter Olympic Games logos to contribute to the success of Winter Olympic Games and the Winter Paralympic Games in Beijing. A court of Quanzhou in Fujian province promulgated the Implementing Opinions on Strengthening the Judicial Protection of World Heritage Properties, which established a circuit court for the protection of Maritime Silk Road Historical Sites to strengthen the protection of intangible cultural heritage and promote the protection and utilization of historical relics as well as the protection and inheritance of cultural heritage. Jiangxi Jingdezhen Intermediate People’s Court established an IP division to provide judicial guarantee for the construction of the National Ceramic Culture Inheritance and Innovation Pilot Zone.

• Improving the Regulated Development of Emerging Business Forms

In recent years, copyright infringement cases increased in the domains of online games, sports events and live webcasts, and relevant judicial decisions have continued to improve the rules for the practical recognition and protection of works. In 2021, the amended Copyright Law of the People’s Republic of China came into force. People’s courts at all levels conducted researches on the amendment to ensure that copyright cases were heard in accordance with the law and to promote the healthy and sustainable development of the cultural industry. The SPC held a series of symposiums to conduct in-depth discussions on legal issues about the copyright protection of game live-streaming footage and the audio-visual work clips, and concluded a series of cases on the latter one. Courts in Tianjin convened deliberate discussion on issues such as ICP filing, application market, short videos, IPTV infringement and the amount of compensation involved in the Internet copyright cases, and formulated the Answers to Issues Concerning the Trial of Internet Copyright Cases to guide the resolution of complicated issues in judicial practice.

• Regulating Adjudication of Rights Protection Cases

With the rapid development of cultural industry and the increased awareness of copyright holders, the copyright protection litigation has continued to grow. Protecting creators* rights and interests in conformity with legal provisions, keeping a balance between encouraging creativity and safeguarding people’s cultural rights and interests, and promoting the creation and dissemination of intellectual works are all critical issues that must be addressed in copyright protection. In a series of cases involving copyright infringement by KTV operators, the SPC clarified the issues of electronic evidence determination, lowering the burden of proof for the parties, and effectively protected the legitimate rights of right holders. Chongqing High People’s Court and Sichuan High People’s Court researched and drafted the Minutes of the Judges' Meeting on Determining the Compensation Amount for Cases Involving Copyright Infringement of Audio-visual Works by KTV Operators, in response to the issues including heavy caseload of copyright infringement in audio-visual works and the ambiguous standards for determining the amount of compensation awarded in their jurisdictions, guided the healthy development of relevant industries according to law.

1. Strengthening the Protection of Fair Competition
   and Protecting a Law-based Market

The IPR protection and the promotion of fair competition are the necessary preconditions for establishing a market-oriented and law-based international business environment, as well as for constructing a modern economic system and improving the socialist market economic system. In 2021, people’s courts intensified the crackdown on unfair competition activities such as infringement of trade secrets, strengthened on judicial regulation for monopolies by Internet platform enterprises. Acts that disrupted fair competition or market order such as “Either-Or Choice” of the Internet platform or “Big data-enabled price discrimination against existing customers” have been severely punished, so as to effectively protect the lawful rights of consumers and the interests of public. By maintaining and promoting fair market competition, the disorderly capital expansion was prevented.

(I) Strengthening Anti-monopoly and Anti-unfair competition Adjudication

People’s courts have properly adjudicated anti-monopoly and unfair competition cases. Judicial decisions fulfilled the functions of rule guidance and value orientation in maintaining fair competition in the market, increasing enterprise awareness of fair competition, and guiding the creation of a market environment that respects, protects and promotes fair competition. In the horizontal monopoly agreement case of “joint operation of driving schools”, the joint venture agreement and self-discipline convention were declared null and void, putting an end to monopolistic practice at their sources. People’s courts also actively explored and improved the standards for defining the monopolistic acts of Internet platforms. The practices of excessively collecting and using personal information, the use of algorithms to commit price discrimination and fraud were also severely punished, which regulated the market competition order. The courts heard cases including data rights, transactions, services and privacy protection, explored and improved the rules for data right protection, and promoted the development of an open, healthy and safe digital environment. The unfair competition practices such as imitating, confusion, false publicity, and commercial defamation were forbidden through the judiciary’s efforts to purify the market environment, and guide business operators to join in positive competitions through technological innovation. The protection of trade secrets was further tightened. Efforts have also been made to deal with the relationship between the protection of trade secrets and freedom of employment, as well as the relationship between the non-compete restraints and the flow of talents to promote the reasonable mobility of talented personnel. The specific measures for protecting trade secrets in litigation were clarified, assuaging right holders’ misgivings about “secondary disclosure" and encouraging them to defend their rights in accordance with the law. To address the issues including inadequate compensation and high costs, the court effectively increased the support for damages and reasonable expenses for rights maintenance, awarding RMB 159 million in the “Shannon" technical secrets infringement case.

(II) Vigorously Promoting the Unification of Adjudication Criteria

The SPC reported to the NPC Standing Committee on the study and implementation of the Report on the Law Enforcement Inspection of the Anti-Unfair Competition Law and its Deliberations. The SPC issued the Interpretations on Several Issues Concerning the Application of the Anti-unfair Competition Law of the People's Republic of China after research, which, in accordance with the newly amended Anti-Unfair Competition Law, focused on refining the provisions of Article 2 of the Anti-Unfair Competition Law, as well as counterfeiting and confusion, false publicity and unfair competition on the Internet, etc.. The Interpretation is a timely response to the judicial needs of emerging fields and new business forms which is critical in strengthening the adjudication of anti-unfair competition cases, consolidating the fundamental position of competition policy, and promoting the formation of a domestic unified market that is efficient, well- regulated and fully open. The SPC published 20 model cases on Internet IPRs protection, anti-monopoly and anti-unfair competition, indicating the judiciary’s unwavering commitment to fostering a fair and competitive law-based environment.

1. Deepening the Adjudication Reform and
   Promoting Comprehensive Protection

In 2021, people’s courts emphasized the importance of resolving difficult problems through reform thinking and protecting innovation in novel ways. The Plan for Judicial Protection of Intellectual Property by People's Courts (2021-2025) and the Opinions on Strengthening the Trial of Cases Involving Intellectual Property Rights in the New Era to Provide Effective Judicial Services and Support for Building China into an Intellectual Property Rights Power were issued, which promoted the judicial protection capability and standard in IPR protection steadily. It has made significant strides towards improving the professional trial system and promoting litigation standards. Simultaneously, people’s courts have actively strengthened the mechanism for judicial adjudication and administrative enforcement, improved coordination and cooperation with IPRs administrative departments, promoted the unification of administrative enforcement and judicial adjudication standards, and made efforts to promote a sound pattern of IPRs protection.

(I) Optimizing the Specialized IP Trial System with Chinese Characteristics

China has established a specialized IP adjudication system, with the SPC’s IP judicial departments serving as the anchor, 4 IP courts serving as the model, 27 IP divisions in local intermediate people’s courts serving as the focal points, and IP divisions of the local courts at all levels serving as the support. The appellate trial mechanism for IP cases at the national level was advanced, the building of specialized IP organs was reinforced, and the function of the Internet courts and IP divisions in local courts at various levels were under improvement. The SPC formulated the Several Provisions on Jurisdiction over Intellectual Property Civil and Administrative Cases of First Instance, which strengthened the judicial protection system through scientific jurisdiction, rationally positioned the trial functions of courts at all four levels, further optimized trial resource allocation, facilitated parties in litigations, effectively resolved disputes, and resolved current inconsistency problems in the standards, systems and inconvenience of IP cases jurisdiction of first instance. The SPC has continued to improve mechanism for the “3-in-T integrated trial of civil, criminal and administrative IP cases, and effectively guide the promotion of reform. Tibet High People’s Court issued the Implementing Plan for Integrated 3-in-1 Trial of Intellectual Property Cases to ensure consistent and unified adjudication. Hainan High People’s Court’s Opinions on Several Issues of Designated Jurisdiction over Criminal Cases Involving Intellectual Property Rights clarified the scope of IP-related criminal cases.

Diversified technical facts investigation mechanism has been improved. “The National Court Technical Investigator Talent Database” included a list of over 450 technology experts covering more than 30 technology fields, effectively alleviating the difficulties of fact-finding in technical cases by dispatching experts on demand nationwide. Shanghai IP Court initiated a mechanism of entrusting technical fact investigation to other professional agencies, which could meet the technical investigation demands on IP adjudication for courts at various levels in Shanghai. Based on the part-time technical investigators, Shenyang Intermediate People’s Court explored the establishment of a full-time technical investigators system on the basis of the improvement in the selection of part-time technical investigators.

(II) Improving the Litigation System Compatible with IP Adjudication

The SPC actively conducted researches and studies on litigation rules consistent with IP practice, and promoted the improvement of the IP litigation system. The SPC issued the Interpretation on the Application of Punitive Damages in the Trial of Intellectual Property Infringement Civil Cases, which improves the regulations on punitive damages that were compatible with the provisions of the Civil Code. Guided by the principle of Comprehensive and Equal Protection, the interpretation clarified the applicable conditions, improved the operability of the judicial application of punitive damages, ensured unified criteria for punitive damages application, punished serious infringement upon IPRs, and worked to resolve the difficult problem of “low compensation and high costs”. The SPC issued 6 model cases on punitive damages for infringements of IPRs. Approximately 895 cases in 2021 resulted in punitive damages being awarded to infringers. The SPC issued the Official Reply on Issues concerning the Defendants' Request for Reasonable Expenses in Intellectual Property Infringement Litigation on the Ground of Plaintiff's Abuses of Rights to uphold the bona fide doctrine, fully exploit the role of reasonable expenses such as attorneys* fees in regulating parties’ litigation behaviour; support claims for reasonable expenses from abusive litigants, guide parties in exercising their rights in good faith, and prevent right abusement in the meantime. The SPC also summarized the judicial practices, and in collaboration with the Supreme People’s Procuratorate, examined the formulation of supporting judicial interpretations to ensure the effective implementation of the Criminal Law's Amendment (XI). The amended eighteen judicial interpretations on IPRs entered into force on January 1, 2021, concurrently with the Civil Code, promoting greater uniformity in the scale of adjudication of IP cases.

Local people’s courts at all levels also carried out pilot programs in small claims IP litigation and single-judge trials, classifying cases based on their complexity, significance, and duration of trial. They actively used modern technologies such as 5G, Augmented Reality, and Artificial Intelligence to conduct online litigation, consolidate and enhance smart court construction achievements to overcome the impact of COVID-19 pandemic, and comprehensively promote the modernization of the adjudication system and expertise. Beijing High People’s Court formulated the Guidelines on the Evidence Rules for Intellectual Property Civil Litigation in an attempt to address issue of the difficulty in adducing evidence. Zhejiang High People’s Court promoted the application of copyright examination by AI to check image duplicate, identifying the innovative points and evaluate similarities. The AI assistant has been put into practice in 173 cases, with an effective duplicate check rate of 43%. Hulunbuir Intermediate People’s Court in Inner Mongolia piloted the use of the judicial block-chain platform to provide efficient and convenient technical support for IP protection before and during the trial. Ningxia Yinchuan Intermediate People’s Court formulated the Guidelines for the Fast Trial Mechanism for Typed Intellectual Property Cases, which effectively reduced the average term of IP case trial.

• Actively Participating in Establishing an Overall Protection Framework for IPRs

Protecting IP rights is a systematic endeavour. People’s courts have always laid stress on coordination and cooperation, actively participating in the development of a comprehensive protection system and bolstering systemic protection capacity. The SPC was a positive participant in the work to crack down IP infringement and counterfeiting, as well as the formulation of significant IP protection documents. It established communication and liaison mechanisms with the State Intellectual Property Office and the State Anti-Monopoly Bureau to facilitate an effective interface between administrative enforcement and the judiciary. It signed a memorandum of cooperation with the Ministry of Agriculture and Rural Affairs and jointly hosted a symposium on IPRs protection in the seed industry, established an expert consultation mechanism for judicial protection of IPRs in seed industry, actively promoted the revitalization of the seed industry. Additionally, the SPC bolstered coordination with the National Administration of Traditional Chinese Medicine and the State Intellectual Property Office in order to promote the establishment of special rules and protection mechanisms in patent granting for TCM. The SPC continued to advise courts in the Yangtze River Delta and other regions to establish cross-regional and inter-departmental collaboration mechanisms with administrative authorities in order to foster regional collaborative innovation. As a furtherance to the Notice of Establishing an Online Litigation and Mediation Connecting Mechanism for Intellectual Property Disputes jointly issued by the SPC and the National Intellectual Property Administration, an online platform that connects litigation and mediation by incorporating mediators and mediating organizations at all levels was established to enable the whole-process online IP dispute mediation. There were 289 mediation organizations and 1,635 mediators in the platform, and over 20,000 IP cases were assigned to this platform by local courts for pre-litigation mediation. Qinghai High People’s Court and the Qinghai Administration for Market Regulation signed the Memorandum of Cooperation on Joint Punishment of Seriously Dishonest Entities in Intellectual Property (Patents) Domain which was intended to jointly punish the dishonest entities in respect of IP infringement. Xinjiang High People’s Court and the Xinjiang Administration for Market Regulation signed the Framework Agreement on Intellectual Property Protection Cooperation to promote cross-departmental coordination. Courts in Hebei Province have actively participated in special actions such as the campaign against counterfeiting agricultural materials and the joint action of IP protection in e-commerce by providing legal services and judicial support. Anhui Huaibei Intermediate People’s Court, on the basis of the Framework Agreement for Coordinated Judicial Protection of Intellectual Property in Huaihai Economic Zone, built itself into a model for inter-provincial coordinated IP protection. Liaoning High People’s Court, Liaoning Provincial People’s Procuratorate and Liaoning Provincial Public Security Department jointly issued the Minutes of the Conference on Several Issues concerning the Handling of Criminal Cases of Intellectual Property Infringement Cases, which standardized law enforcement and adjudication, comprehensively enhanced the crackdown of IP crimes. Shandong Qingdao Intermediate People’s Court and Qingdao Municipal People’s Procuratorate signed the Framework Agreement on the Connection and Cooperation between the Court and Procuratorate on Intellectual Property Protection to resolve jurisdiction issues and advance coordination. Courts in Shanxi, Jilin, Hunan, Guangxi, Yunnan and other regions and provinces were actively organized the delivery of laws to enterprises and communities, conducted public court hearings and law enforcement activities, implemented “whoever enforces the law is responsible for promoting the law”： enhanced judicial disclosure, and raised the general public’s awareness of the importance of respecting and protecting IP rights.

• Impartial Trial of Foreign-related Cases and
  Actively Engaged in International Cooperation

People’s courts have adhered to coordinate efforts to advance domestic and international rule of law, equally safeguarded the legitimate rights and interests of Chinese and foreign parties and all types of market entities in accordance with the law, maintaining the market order of fair competition, and serving the new development paradigm featuring dual circulation, in which domestic and overseas markets reinforce each other with the domestic market as the mainstay. The courts actively engaged in international cooperation in IPRs protection, and contributed China’s judicial wisdom to global IP governance.

(I) Equally Protecting the Legitimate Rights and Interests of Chinese and Foreign litigants

By fairly adjudicating foreign-related IP cases and properly resolving major IP disputes relating to international trade, people’s courts implemented the TRIPs Agreement, the Madrid Agreement, the Berne Convention and other international treaties ratified and acceded to by China. The courts actively promoted an open, fair; just and non-discriminatory environment for science and technology development, as well as a market-oriented, law-based and international business environment, which demonstrates China’s confidence and determination of protection innovation, openness and inclusiveness. The SPC ruled in favour of the full amount of RMB 20 million in damages claimed by the foreign right holder in the case of patent infringement for the “locking intramedullary nail” invention based on the refusal of submitting account books from the infringer. Therefore, the legitimate rights and interests of the foreign litigants were fully protected. China has increasingly become a reliable and trustworthy choice for international IP litigation.

(II) Participating in International Cooperation in IPRs Protection

People’s courts maintained a high level of international judicial exchanges and cooperation, actively participated in global IP governance through the World Intellectual Property Organization (WIPO), and promoted the development of a more just and rational global IP governance system. The SPC hosted the Sino-European Forum on the Comparison of Intellectual Property Litigation Systems, participated in international conferences such as the 7 ^th BRICS International Competition Conference, the 18^th Shanghai International Intellectual Property Forum, the 2 ^nd International Symposium on Judicial Protection of Intellectual Property Rights, the 2021 WIPO Intellectual Property Judges Forum, the China-EU Judicial Forum Seminar on Standard Essential Patents, the International Association for the Protection of Intellectual Property (AIPPI) China Youth IP Seminar. The SPC also held an online exchange with the UK IPR Enterprise Court and co-wrote the WIPO Global Judicial Guide to Patent Case Management. Chinese courts have actively promoted China’s voice, told the story of China’s legal protection of IPRs, and contributed Chinese wisdom to the global IP governance system. Shanghai High People’s Court established the IP Innovation Award after signing a Memorandum of Understanding with the WIPO Arbitration and Mediation Centre.

• Strengthening Capacity Building for Judges to
  Serve and Guarantee Fairness

In 2021, people’s courts concentrated their efforts on developing an IP trial team capable of meeting the demands of a new era. The courts conducted an in-depth research and education on the Party’s history, as well as team education and rectification, adhered to Party Building in order to promote team building and trials, strengthened political construction, developed political loyalty, and increased the IP trial team’s awareness and ability to serve the overall situation. Professional training and judge selection were strengthened, and the mechanism for IP judge reservation and selection was also improved. The courts sought to develop an IP trial team that was politically committed, cognizant of the broader context, well-versed in the law, knowledgeable about technology, and with an international perspective.

(I) Carrying out the In-depth Education of CPC’s History

The year 2021 marks the 100^th anniversary of the founding of the CPC. People’s courts diligently implemented the Party Central Committee’s major decisions, conducted an in-depth research and implementation of the spirits of General Secretary Xi Jinping’s important speeches on the Mobilization meeting of the study and education of the Party’s history and delivered on July 1, 2021, and continuously strengthened their understanding of the spirit of the 19^th CPC Central Committee’s Sixth Plenary Session, focusing on promoting Party history learning through the education with high standards and high quality, with the core of learning history to understand the reasoning, boost self-confidence, respect morality, and promote practice. At all levels, people’s courts used the “I do practical work for the public” campaign as a powerful tool to exercise their judicial functions fully and to meet the public’s judicial needs for IP protection. The SPC organized seminars on issues concerning the copyright infringement in the use of other people’s works on university campus networks, with the goal of establishing a communication channel and promoting consensus among education authorities, video companies, and research universities to resolve disputes.

(II) Carrying out Education and Rectification

By resolutely implementing the spirits of important instructions on the education and rectification of political and legal team elaborated by General Secretary Xi Jinping as well as the decision-making and deployment of the Party Central Committee, people’s courts have educated and corrected their teams, resolutely completing the “four tasks” of building political loyalty, eliminating vicious members, resolving persistent and chronic problems, and promoting the spirit of heroism, in order to develop a reliable team with firm belief, responsibility, incorruptibility and people-centered awareness. People’s courts at all levels have worked to achieve the unification of delivering one-time judgment and ensuring long-lasting peace, and in consideration of practice of IP trials, improved the mechanism for the exercise and supervision of judicial power; and taken the achievements of rectification education to push forward high-quality development of IP trial in the new era.

• Improving Talent Training Model

People’s courts at all levels endeavored to enhance the professionalism of IP talents in handling new, complex and highly technical cases by cultivating their comprehensive trial abilities. The SPC actively coordinated the training of specialized IP talents nationwide by convening professional meetings and seminars, organizing professional training, improving judicial databases, publishing trial guidelines, carrying out human resource exchanges and other methods, the capability and quality of IP trial team were well promoted. Meantime, the court continued to increase support for the construction of court talent teams to the primary courts as well as the courts in the western region. Shaanxi High People’s Court, taking advantage of the abundant resources in scientific and technology education, signed a comprehensive strategic cooperation agreement with Northwest University and Xi’an Jiaotong University, and built court-university cooperation platforms such as the Intellectual Property Case Study Center. High People’s Courts in Jiangxi, Hubei, Gansu and other regions and provinces gave professional training courses on IP trial for the judges, judge assistants and clerks specialized in IP adjudication.

Closing Remarks

The year of 2022 is of great significance for starting the new journey to build China into a modern socialist country in all respects and achieve the Second Centenary Goal. Facing new developments and tasks, people’s courts at all levels must follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and implement Xi Jinping Thought on the Rule of Law. The courts should fully act on the guiding principles from the Party’s 19th National Congress and the plenary sessions of the 19th Party Central Committee. The courts should acquire a deep understanding of the decisive significance of the establishment of both Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole and the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and boost our consciousness of the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment with the central Party leadership. The courts should stay confident in the path, the theory, the system, and the culture of socialism with Chinese characteristics. The courts should firmly uphold Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole and uphold the Central Committee’s authority and its centralized, unified leadership. The courts should carry forward the great founding spirit of the Party, remaining true to our original aspiration and keeping our mission firmly in mind. The courts will closely follow the requirements of “standing grounded in the new development stage, applying the new development philosophy in full, creating a new pattern of development, and promoting high- quality development”. The courts should firmly establish the concept of IP protection as a means of protecting innervation, and comprehensively deepen the reform and innovation in the field of IP adjudication. What the courts have gained from the initiatives to study the history of the CPC and the team education and rectification will be consolidated. All of us in the Courts will strengthen our role in IP trials, enhancing their quality, efficiency, and judicial credibility, and optimizing the rule of law environment conducive to innovation, creativity, and entrepreneurship. Efforts will be taken to increase the international influence of China’s IPR judiciary, as well as provide judicial services and a guarantee for China to become a major player in IPRs. These efforts will enable the courts to pave the way for a successful 20 th National Party Congress.

Introduction

2019 was the 70thyear of the founding of the People’s Republic of China. The same year saw theunfolding of the People’s Courts’ Fifth Five-Year Reform Programme (2019–2023).Guided by General-Secretary Xi Jinping’s thought on Chinese socialism for thenew era, the courts implemented the decisions and essential values of the 19thNational Congress of the Communist Party of China (“Party Congress”) and of thesecond, third and fourth plena of the 19th CCP Central Committee. They havealso continued to foster the “four aspects of consciousness”, the “four mattersof confidence” and the “two pillars to safeguard”, never losing sight of theiroriginal aspirations and mission. They pursued the national goal of building acomplete xiaokang society, discharged adjudication duties based on thelaw and the constitution, and intensified reform of the adjudication system toimprove adjudication efficiency, effectiveness and judicial credibility. Theyhave also ensured efficacious discharge of their adjudication duties. Havingdedicated significant effort to building an effective team, the courts rebootedand renewed the intellectual property adjudication regime to further elevatethe credibility and impact of China’s intellectual property adjudication at theinternational level. By continuing to modernise the intellectual property adjudicationregime and capacity, the courts have also enabled the delivery of robustjudicial services and enactment of judicial safeguards to underpin thecountry’s innovation-driven development and creation of a pro-businessenvironment.

I. Leveraging the adjudicationprocess for more effective protection

The 19th CCP Central Committee’s fourth plenary session issuedimportant directives to advance Chinese socialism and modernise the nationalgovernance system and governance capabilities. The session also gave instructions forthe country to improve systems and mechanisms to encourage technologicalinnovation, redouble efforts to build an innovation-based country andstrengthen national strategic technologies. To elevate China’s technologicaland innovation capabilities, drive quality economic growth and implement ourinnovation-driven development strategy, we need greater protection and utilisationof intellectual property to fashion an effective incentive structure. As thecourts “strive to make the people feel fairness and justice in every judicialcase”—a goal that centres on the people and fair justice—intellectual propertyadjudication has become an important means to incentivise and protectinnovation.

In 2019, the courts have accepteda total of 481,793 cases, including first instance and second instance casesand applications for extraordinary legal remedy to reopen cases.475,853 cases(including carried forward cases) were concluded, representing a respectiveyear-on-year increase of 44.16 % and 48.87%.

(I) More effective adjudication ofcivil disputes

Given the essential role ofintellectual property adjudication in protecting innovation and in levellingthe competitive playing field, adjudication has focused on encouragingtechnological innovation, promoting cultural transmission and maintainingmarket order to provide clear, consistent and predictable rules to guideadjudication and instil confidence among entrepreneurs and innovators.

In 2019, the Supreme People’s Court accepted2,504 new civil intellectual property cases and concluded 1,976 cases, respectively174.26% and 260.97% higher than the previous year. In the same year, the localcourts accepted 399,031 and concluded 394,521 first instance civil cases, wherethe respective year-on-year increases were 40.79% and 44.02%. Among the newlyaccepted cases, 22,272 were patent cases (2.64% year-on-year increase); 65,209 trademark cases (25.41% year-on-year increase); 293,066 copyright cases (49.98% year-on-year increase). There were also 3,135 cases ontechnology contract disputes, (16.98% year-on-year increase) and 4,128 unfair competitioncases, including 70 monopoly cases, (49.71% year-on-year increase). Other civil intellectualproperty disputes constituted 11,221 cases, or 49.71% more than last year. Forsecond instance cases, 49,704 were accepted and 48,710 concluded, translatingto a year-on-year increase of 79.95% and 85.29% respectively.

High profile civil disputesinvolving intellectual property heard and concluded by the courts during theyear include:

French automotive parts manufacturer Valeo Systemes D’Essuyage(plaintiff- appellee)vs. Lukasi Car Accessories(Xiamen) Co. Ltd (respondent-appellant) and Fuke Car Accessories (Xiamen) Co. Ltd. (respondent-appellant)et al. involving a utility patent infringement dispute; HondaMotor Company (plaintiff-appellee- petitioner) vs. Hengsheng Xintai (Chongqing) Trade Company (respondent-appellant-petitionee), Hensim (Chongqing)Group et al. (respondent- appellant-petitionee) involving a trademarkinfringement dispute; Hemujia Medical Management Consultancy(Beijing) Co., Ltd (plaintiff,-appellant-petitioner)vs. Hemujia Obstetrics andGynaecology Hospital (Fuzhou)(respondent-appellee- petitionee) involving unfair competition; Cai Xinguang (plaintiff-appellant) vs. RunpingCommerce (Guangzhou) Co., Ltd(respondent-appellee) involving infringement of new plant variety; and copyrightinfringement case of ShanrenSculpture (Hebei) Co., Ltd(plaintiff-appellant) vs.Zhongding Garden Sculptures (Hebei) Co., Ltd et al. (respondent-appellant) and the People’s Government of Sanhe Township, Bozhou District, Zunyi Cityet al. (respondent-appellee).

(II) More rigorous legality review ofadministrative actions

The courtshave strengthened legality review of intellectual property granted andvalidated by administrative authorities and of administrative enforcementactions. In 2019, the Supreme People’s Court accepted1,066 intellectual property cases involving administrative disputes andconcluded 884 cases. Compared to last year, the number of cases has risen by70.83% and 52.15% respectively. The same year saw local courts accepting 16,134first instance administrative cases (19.11% increase year-on-year), 1,661were patent cases (8.14% increase year-on-year), 14,457 trademark cases (20.56%increase year-on-year) and 16 copyright cases. 17, 938 first instance caseswere concluded (89.74% increase year-on-year). Local courts also accepted 7,304(104.88% increase year-on-year) second instance administrative cases, and 5,942cases were concluded (84.71% increase year-on-year), of which, decision wasupheld for 4,791 cases, first instance judgement was amended for 1,026 cases; 4cases were remanded for retrial, 613 cases withdrawn, and 132 cases overruled.

High profileintellectual property-related administrative disputes heard and concluded bythe people’s courts during the year include Huawei. Technologies, Co, Ltd(plaintiff-appellee) v. Samsung Electronics Co, Ltd (Thirdparty-appellant) and CNIPA (respondent) involving an administrative overthe invalidation of a patent; and Kangzhi Lesi Network Technology (Beijing)Co., Ltd (plaintiff-appellee-petitionee) v. Meiyou InformationTechnology (Xiamen) Co., Ltd (third party-appellant-petitioner) and CNIPA(respondent-appellant) involving an administrative dispute over theinvalidation of a trademark.

(III) Stricter sanctions onintellectual property crimes

Intellectualproperty crimes were subject to more rigorous adjudication   toclean up the market, therefore better defend intellectual property fromcriminal infringement.

In 2019, thelocal courts accepted 5,242 first instance intellectual property-relatedcriminal cases, 21.37% higher than last year, including 4,982 cases relating toinfringement of registered trademarks ( 21.01% increase year-on-year), and 210 oncopyright infringement (34.62% increase year-on-year).

At the locallevel, 5,075 first instance cases were concluded during the year (24.88%increase year-on-year), including 2,134 cases involving counterfeiting ofregistered trademarks (15.23% increase year-on-year), 2,279 cases involvedselling goods bearing counterfeit registered trademarks (32.19% increaseyear-on-year), 423 were cases of illegal manufacturing or sale of goods bearingillegally produced registered trademarks (38.69% increase year-on-year); 1 caseinvolved counterfeiting patents, 191 were criminalinfringement of copyright, (40.44% increase year-on-year), 8 involved sellinginfringing reproductions (33.33% increase year-on-year), and 39 involved trade secret infringement crime (no changefrom last year).

For second instance intellectual propertycases involving criminal offences, the local courts accepted 808 cases (18.30% increaseyear-on-year), and 807 cases were concluded (23.70% increase year-on-year).

High profile criminal cases involvingintellectual property heard and concluded by the people’s courts during theyear include: Yang Fengming, Yang Maogang et al. for counterfeiting aregistered trademark; Lin Yixiang et al. involving infringement of tradesecrets; Xu Zhenwei et al. involving counterfeiting of registeredmark; and Chen Li et al. involving trademark infringement.

Intellectual property adjudication has madesteady progress in the year, and has scored higher in quality andeffectiveness. The key features for 2019 are:

New highs in caseload. Withincreased social awareness of intellectual property right and greatercredibility of the courts in adjudicating intellectual property disputes, thecourts have faced a spike in caseload. The total number of accepted andconcluded cases for the year 2019 were at historic high, both recording a year-over-yearincrease of more than 40%.

By geographical location, Beijing accepted80,165 cases, Shanghai 23,580 cases, Jiangsu Province 20,249 cases, ZhejiangProvince 27,706 cases and Guangdong Province 157,363 cases, totalling 309,063cases. This constituted 64.15% of China’s total case number and the greaterpart of the country’s intellectual property caseload. The areas that experiencedmore than 50% year-on-year increase in caseload were Hebei Province (53.53%),Anhui Province (60.30%), Fujian Province (64.88%), Guangxi Autonomous Region(98.49%) and Chongqing Municipality (173.66%). Despite facing manpowershortages, the courts have managed to dispose of a large number of cases duringthe year, with the total disposal number reaching historic high. Other thanbeing the most active regions, the courts in Beijing, Shanghai, JiangsuProvince, Zhejiang Province and Guangdong Province have also achievedcommendable disposal rates of more than 90%.

Continued emergence of new case genres. As the newround of technological revolution and industrial transformation rapidlyemerges, legal boundaries are increasing tested and pushed by new technologies,new products and new forms of business. New intellectual property issuesinvolving cutting-edge technology relating to the Internet, big data,artificial intelligence, standard essential patents, biomedicine have also continuedto emerge, requiring detailed examination of complex technological solutionsand creative application of the law, based on the merits of each case. Someexamples are:

The Supreme People’s Court: Heardpatent cases involving mechanics, material science, electrical engineering,communications, biopharmaceuticals, and fine-tuned the adjudication rules baseon the derived insights.

Beijing Intellectual Property Court: Heard andconcluded many significant and complex cases, including the first case relatingto the infringement of cloud servers, and preservation of evidence duringpre-trail for a case involving the infringement of a patent relating to the productionof stable lyophilised pharmaceutical composition.

Shanghai High People’s Court: Concluded Nokiavs. Shanghai Huaqin Communication Technology Co., Ltd involving the infringementof a utility patent. The case provides reference for tryingcommunications-related SEP disputes in the future.

Guangdong Province: The courtshave heard 63 patent cases, each involving a jurisdictional amount of more thanCNY 10 million, the aggregate amount of which was approximately CNY 8.18billion.

Continued to augment protection. The courtshave implemented the “Opinions on Improving the System of Property RightsProtection to Protect Property Rights According to Law” to provide more timelyand accessible judicial relief for intellectual property disputes, as well as tobalance the damages awarded with the market value of the intellectual propertyin question. Some exemplary efforts include:

Beijing: TheHaidian District People’s Court awarded damages of more than CNY 20 millionbased on discretionary valuation when Motion Scene (which operates UC browser)sued Sogou for using its Sogou Input Method to redirect the user to Sogou’ssearch website.

Inner MongoliaAutonomous Region High People’s Court: Increased the amountof damages from CNY 50,000 to CNY 1 million in the Guangdong Landai GroupBeijing Lanbao Beer Co., Ltd vs. Henan Honghuo Food Co., Ltd et al.trademark infringement case to sanction infringers more severely.

Zhejiang High People’sCourt: Ordered the respondent to pay CNY 8 million in damages for the Aupu ElectricalAppliances (Hangzhou) Co., Ltd and Aopu Home Furnishing Co., Ltd vs. Zhejiang FashionBuilding Materials Co., Ltd and Zhejiang New Energy Co., Ltd case involvingtrademark infringement and unfair competition. The court’s decision has protectedthe “AOPU” brand value.

Fujian Province: The courtsimposed punitive damages in the “JIU MU WANG (lit. ‘King of Nine Herds’)”trademark dispute and the “BOLIMO” trademark and unfair competition disputewhen the damages awarded were either doubled or trebled the amount forcompensatory damages.

Effects of judicial efforts were recognised. The courtshave done well in a series of complex and novel cases that attractedconsiderable public attention. The precedence would serve as classic cases thatare demonstrative and could guide future adjudication. Exemplary effortsinclude:

SPC IP Court: Issued decision forits first case immediately after the hearing, and the determination criteria forfunctional features were detailed in the written judgement. The hearing wasbroadcasted live and was widely reported by the media. Live streaming of thehearing—a case that took only 50 days to conclude from the date it was acceptedto service of judgement—attracted more than 18 million viewings. Opening up thecourtroom for public scrutiny has ensured fairness, transparency andefficiency.

Gansu High People’s Court: Concludeda new plant variety dispute involving a foreign party, thereby protecting thelawful rights of the plant breeder.

Shanghai Intellectual Property Court: Concluded aseries of cases, which include the utility patent dispute between NetacTechnology (Shenzhen) Co., Ltd and Transcend China (Shanghai) Co., Ltd. Thedisputes, which involved cutting-edge technology used in mobile storage and ajurisdictional amount of more than CNY 24.7 million, has attracted widespreadattention and much recognition.

Hunan Province: Adjudicated trademarkinfringement and unfair competition cases involving a wide range of servicesectors such as food and beverage, creative photography and department-storesales. The decisions provided direction for the regulated and reasonable use oftrademark by players in the food & beverage, department store and creativeindustries, which in turn supported the healthy growth of the service sector.

Remarkable ADR outcomes. The courtshave continued to turn to non-litigious alternative dispute resolution as theprimary means to settle dispute, and on promoting the new era FengqiaoExperience—a way of community-level social governance whereby public effortwas harnessed to maintain social stability. By actively encouraging the broaduse of ADR, parties were encouraged to resolve disputes through non-litigiousmeans by working together to find mutually agreeable and beneficial ways tosettle intellectual property disputes efficiently. Exemplary efforts include:

The Supreme People’s Court : Successfully mediated the trademark infringement case of Henan DukangInvestment Group vs. Shaanxi Baishui Dukang Company, and permanentlyresolved all cases relating to the “DUKANG” (believed to be a minister underthe mythological Yellow Emperor and originator of winemaking) trademark issue. Thecourt’s efforts have contributed to improving the stability of the local marketand providing protecting local businesses. It established a nation-widewhole-of-system coordinating mechanism to explore a circuit adjudication modelcombining the workings of an IP court and a circuit court, and an adjudicationmechanism combining onsite examination (kanyan) and hearing, and hassince facilitated the unified settlement of 48 related cases nationwide. Italso enabled the efficient resolution of 80 patent infringement cases at thepre-trial stage. The court’s efforts have made litigation easier and enabledthe Fengqiao Experience to enrich the intellectual property sector.

Beijing: Continued to drivereform of the “ADR + expedited procedure” as part of the city’s effort tomodernise the capital city’s social governance system and governance approach.

Jilin Province: The courts focused onusing mediation to resolve disputes. Total mediation rate for intellectualproperty disputes was 75%.

Anhui High People’s Court: Succeededin mediating the dispute between China Broadcasting Satellite TV and ChinaTelecom Anhui Branch concerning the infringement of broadcasting right, with ajurisdictional amount exceeding CNY 100 million.

Shandong Province: The courts implementedthe “Regulations to Promote Use of Alternative Dispute Resolution for ShandongProvince” and worked at developing a platform to align litigation withmediation.

Hubei Province: The courts coordinatedresources and established mediation platforms comprising administrative organs,lessors of the site where infringement occurred, industry associations, attorney-mediationorganisations to facilitate mediated settlement of disputes.

Sichuan Province: The courts enteredinto a cooperation agreement with the China (Sichuan) Intellectual PropertyProtection Centre to develop a mechanism to provide coordinated protection ofintellectual property. Under the agreement, the centre was appointed to mediateintellectual property-related disputes.

Yunnan Province: The courts establisheda pre-trial mediation system for intellectual property cases to enable theprompt resolution of a certain proportion of intellectual property disputes.

Liaoning Province: The courts beefed upexisting ADR mechanism by using pre-trial mediation for copyright, trademarkand unfair competition cases if the facts are clear and minimally disputed. Themechanism has enabled the courts to align litigation with mediation.

Xinjiang Autonomous Region: The courtsfocused on using mediation to settle dispute, translating to a rather highpercentage of post-mediation withdrawal rate.

II. Intensified supporting measuresfor judicial reform and built a more robust intellectual property justicesystem

In 2019, the courts leveraged the “Opinions on Several Issues on Reformand Innovation Relating to Intellectual Property Adjudication” to develop moreinnovative theories and institutions and adopt more innovative practices. Asuite of relevant reforms was also instituted as part of the courts’ effort tocontinue building better systems and mechanisms for intellectual property.

(I) SPC IP Court off to a flyingstart

Creatingthe Intellectual Property Court (SPC IP Court) within the Supreme People’sCourt was an important move by the Party Central Committee, with Xi Jinping asthe core, based on the strategic vision of building an intellectual propertypowerhouse and a high-tech global superpower. It was an important milestonemarking a major breakthrough and innovative step in our intellectual propertyadjudication system.

2019 isthe SPC IP Court’s first year of operation. As an agency tasked to hear all appealcases of technology-related intellectual property disputes, the SPC IP Courthas overcome the early difficulties to drive comprehensive progress bylaunching copious reform initiatives that have scored preliminary successes.

First, it unified adjudication standards . Unificationof adjudication standards was the primary objective of creating the SPC IPCourt. The “Rules of Implementation of a Unified Adjudication Standard for the IntellectualProperty Court of the Supreme People's court”, among others, was developed toensure that the entire process, from preliminary analysis to mid-processcontrol, final review and approval and stringent management of important cases,were well- administered. Also, the “Minutes of the Conferences of Judges” werecompiled and “Guidelines on Case Operations” prepared and distributed to unifyadjudicative standards and methods for handling similar cases.

Second, it explored combining the hearing of administrative andcivil disputes. Disputes relating to civil infringement andadministrative validation involving the same patent was heard by the sameadjudication panel to ensure alignment of the civil and administrativeprocedures and consistency of adjudicative standards.

Third, it optimised the mechanism for adjudicatingtechnology-related intellectual property disputes. Living by itsmotto of people-centredness and being dedicated to delivering optimaladjudication management, the court leveraged its advantage as the centralcoordinating authority and the “1+76” hierarchical structure to resolve linkeddisputes within the country.

Fourth, it continued to develop the multiprong technicalfact-finding mechanism. By coordinating technical investigationresources in the country, including more than 360 technical investigators frommore than 30 technical fields, the SPC IP Court worked at alleviating theproblems faced by the courts, including inadequacies in technical investigationfor the less-developed regions and the lack of specific technical expertise in developedregions.

Fifth, it strengthened informatisation and adoption of smarttechnology. The court has built case and adjudication rules databases,and created smart platforms such as the "Big Data Intellectual PropertyAnalysis Platform". It also explored the creation of an "IP CourtCloud". These were endeavours to meet the demands of parties for onlinesubmission of evidence and online reading of case files, and would become the technologicalbedrock for adjudicating technology-related intellectual property disputes.

(II) Steady progress in development ofintellectual property courts

Toimplement the National People's Congress (NPC) Standing Committee’s reviewopinions on the progress of local intellectual property courts, the SupremePeople's court continued to provide more guidance for the Beijing, Shanghai andGuangzhou intellectual property courts, which have continued to make smooth progressand achieve remarkable outcomes.

Sincetheir establishment at the end of 2014, the intellectual property courts haveaccepted more than 100,000 cases and heard intellectual property cases of internationalimpact and which are important basis for crafting adjudication rules. They werealso instrumental for improving the quality and efficiency of hearings,ensuring consistency in decisions, and facilitating innovation-drivendevelopment. The courts have also leveraged their functional positioning toexplore bold and innovative initiatives to drive judicial reform thatengendered a new intellectual property adjudication landscape. The reforms alsoenabled specialisation, an important feature that has helped buttress judicialprotection for intellectual property.

(III) Continued optimisation ofmechanism governing trans-regional jurisdiction

Since2017, specialised judicial organs (IP divisions) were established within 21intermediate courts, such as the Nanjing Intermediate People’s Court, to facilitatecentralised jurisdiction over certain categories of trans-regional firstinstance intellectual property cases and enable specialised intellectualproperty judicial organs to be rationally distributed. The IP divisions havededicated themselves to exploring innovative initiatives and to improving thelevel of specialisation, an important effort that would drive the co-ordinateddevelopment of the Beijing-Tianjin-Heibei (Jing-Jin-Ji) region, and the developmentof the Yangtze River Economic Belt and the Guangdong-Hong Kong-Macao GreaterBay Area (Greater Bay Area). Exemplary work by several local IP divisionsinclude:

Nanjing:Conducted circuit trials, implemented specialised and centralised adjudication,and responded to the demands of high-tech industrial parks to protect theintellectual property of business innovations.

Hangzhou:Leveraged internet technology and established a trans-regional cooperationmechanism to facilitate access to online hearing and standardised applicationof the law.

Zhengzhou:Digitised processes such as introduction of online filing and acceptance ofcases, electronic service of documents and WeChat mediation to overcome timeand spatial constraints, as part of its effort to provide easy access and to increasethe level of informatisation.

Shenzhen:Capitalised on the city’s geographical advantage to strengthen judicialprotection of intellectual property by participating in the development of theGuangzhou-Shenzhen Science and Technology Innovation Corridor and the PearlRiver Delta National Demonstration Zone for Home-Grown Innovation.

Haikou: Tookthe initiative to protect intellectual property by establishing circuit-courtstations and contact points for judicial services within different parts of theprovince.

(IV) Continued rolling-out of moremeasures for the “three-in-one” intellectual property adjudication system

In 2019, the courts implemented the “Supreme People's ‘s Opinions onPromoting ‘Three-in-One’ Adjudication of Intellectual Property-Related Civil,Administrative and Criminal Cases” to further consolidate the results of the"three-in-one" reform.

SupremePeople's Court: Reviewed case files relating to intellectualproperty crime to distil first-hand information on criminal adjudication. Thiswill allow more in-depth examination of the norms of adjudicating intellectualproperty criminal offences, based on which, the relevant judicial interpretationscould be revised and improved.

JiangsuHigh People’s Court: Initiated a study relating to the sentencingof intellectual property crimes to provide reference for standardising the useof sanction discretion and in sentencing.

ZhejiangProvince: Since 1 November 2019, all the courts in Zhejiang Province haveimplemented the “three-in-one” adjudication procedure. 260 criminal offencesand 41 administrative disputes were heard during the year.

HainanHigh People’s Court: Initiated research studies on using designatedjurisdiction for intellectual property criminal offences, and clarified the jurisdictionmechanism for "three-in-one" adjudication for intellectual propertycases.

(V) Continued improvement oflitigation procedures

The People’sCourts worked on improving the rules of procedure based on the merits ofindividual intellectual property cases and on developing an optimaladjudication approach to overcome institutional obstacles.

First, giving reasonable guidance in evidenceproduction. The courts have developed innovative measures tostrengthen the burden of proof by enabling ex-officio investigation andcollection of evidence to effectively reduce the costs borne by right-holders.

Shanghai High People’s Court: Explored the use of an evidenceproduction order such that any behaviour that obstructed the production ofevidence would be punished under the law.

Hunan High People’s Court: Regulated policies and proceduresrelating to investigation orders for lawyers.

Hainan High People’s Court: Parties were encouraged to make fulluse of third-party means such as notarisation and electronic data platforms tocollect and preserve evidence.

Second, building a more robust fact-findingmechanism. The courts have elaborated the ways which differentpersonnel could participate in the investigation of technical facts, and have mobilisedmanpower and resources to develop a dynamic and coordinated system for fact-finding.

Supreme People's Court: Created a pool of experts comprisingtechnical investigators and technical advisory experts employed and appointedby the courts, and established a national mechanism for sharing oftechnical-investigation resources among the courts. It also launched the"Work Manual for Technical Investigators (2019)" to guide the courts intechnical fact-finding and regulate their technical fact-finding activities.

Beijing Intellectual Property Court: Established a"four-in-one" technical fact-finding mechanism, comprisingspecialised people's assessors, technical investigators, expert assessors andforensic institutes.

Jiangsu High People’s Court: Entered into a framework agreementwith the Jiangsu Province Collaborative Innovation Centre for BiomedicalFunctional Materials, where the parties would cooperate on intellectualproperty-related technical fact-finding. The cooperation enabled the court toengage technical experts to assist in intellectual property cases.

Production and Construction Corps Branch of the Higher People's Court ofXinjiang Uygur Autonomous Region: When preserving evidence,  professionals were engaged to survey thelocation and the planting area of infringing seeds, and to collect samples of infringingplants .

Hubei, Hunan, Sichuan and Shaanxi High People’s Courts: Formedexpert pools to tap professional expertise and improve the accuracy oftechnical fact-finding.

Third, optimisation of adjudication approach. Giventhe diverse judicial needs, the different levels of courts have sought tooptimise their adjudication approaches through a diversion mechanism that separatesthe complicated cases from simple ones, and that applies a unified standard whenapplying the law.

Beijing Intellectual Property Court: Implemented thespeedy trial mechanism, and introduced a pilot that judges would issue"abridged written judgments" for trademark review cases. Averagedisposal time was reduced by 30%.

Xi'an IP Division: Formed an adjudication team to conductspeedy trial, an approached that required only 20% of the manpower to hear 70%of the cases.

Chengdu IP Division: Explored the use of speedy trialmechanism for intellectual property disputes to better allocate adjudicationresources. The outcomes were encouraging.

Haikou IP Division: Implemented an integrated model ofoperations that combined case acceptance, adjudication and enforcement underone operational framework to improve adjudication quality and effectiveness.

Changchun IP Division: Introduced speedy and simplifiedtrials for copyright and trademark disputes. 84.8% of the cases were concludedwithin five months, and the adjudication cycle was substantially shortened.

III. Broadened judicial functions andcontinued improvement of research quality and effectiveness to guideadjudication

Always vigilant ofhot button issues, the People’s Courts have leveraged the Supreme People’sCourt’s Intellectual Property Judicial Protection Research Centre and itstheoretical research base to strengthen development of intellectual propertyprotection-related innovative theories and research of the relevant judicialpolicies. They have also actively participated in the revision of intellectualproperty-related laws and provided effective judicial supervision and guidance.

(I) More focus on providing legislativerecommendations

The courts haveactively participated in the revision of laws and regulations such as the CivilCode, Patent Law, Trademark Law, Anti-Unfair Competition Law, Copyright law,Regulations on the Implementation of the Trademark Law, and Regulations on theProtection of New Plant Varieties.

Other legislativeendeavours include participating in thefourth forum on Patent Law amendment, and CPPCC’s meeting on folkliterature and artistic works relating to the drafting of the amendments to theCopyright Law. The courts also initiated researches on a special procedure lawfor intellectual property litigation, established the general direction, basicframework and key content of the research.

(II) Intensified drafting of judicialinterpretation

The Supreme People's Court issue the “Provisions on the Participationof Technical Investigators in Intellectual Property Litigation” setting forththe procedure, responsibility, validity, liability relating to theparticipation of technical investigators in intellectual property litigation.It also researched on topics such allocation of the burden of proof,investigation and collection of evidence, exchange of evidence, and examinationand determination of electronic evidence. The court also organised variousseminars on the drafting of judicial interpretation for punitive damages forintellectual property infringement, application of the Trademark Law and LawAgainst Unfair Competition, trade secrets, and national defence patentdisputes.

(III) More in-depth study of judicialpolicies

The courts participated in the drafting of the “Opinions onStrengthening the Protection of Intellectual Property”, allowing specialisedintellectual property adjudication organs such the Guangzhou IntellectualProperty Court and the Shenzhen Intellectual Property Division to play biggerroles, and stepped up cooperation in GBA-related intellectual propertyprotection and professional training. For Guangzhou Knowledge City (GKC), thecourts also pressed ahead with the national comprehensive reform pilotprogramme to better utilise and protect intellectual property.

To better serve the free trade zones, special studies on theprotection of intellectual property were conducted, based on which, 38initiatives relating to the judicial protection of intellectual property forthe development of free trade zones and free trade ports were proposed.

(IV) Leveraged the role of caseguidance

As part of its annual activities, theSupreme People’s Court published the “Annual Report on Intellectual PropertyCases (2018)’” and the “Top Ten Intellectual Property Cases Decided by ChineseCourts and Fifty Typical Intellectual Property Cases”. The publicationsindicate Supreme People’s Court’s priority in distilling universally applicableadjudication standards to guide judges. The court also organised a “JudgementWeek” during which the decisions of benchmark cases were issued in an opencourtroom so as to use new genre, difficult and complex cases to shape rulesand regulations. The endeavours of other courts include:

Shenzhen IP Division: Reviewed its experience from the reformfor speedy hearing of design patent disputes and selected 19 typical cases foranalysis.

Inner MongoliaAutonomous Region High People’s Court: Held a briefing to update on intellectual property adjudicationand to launch the compilation of typical cases heard by the court to regulateand guide market players. The court hoped to influence market players tooperate in good faith and ensure that the economic order of the market respectsfair competition.

Henan HighPeople’s Court: Published typical casesrelating to trademark and brand protection .

Sichuan HighPeople’s Court: Published for the firsttime a white paper on the judicial protection of the intellectual property of non-stateenterprises (minying qiye) and typical cases. The paper expounded the problemswith intellectual property protection that non-state enterprises have faced,the underlying causes, and provided recommendations.

(V) Intensified judicial researches

Diverse research methods. The SupremePeople's Court collated big data relating to trademarks registered and usedduring the past five years, studied the measures regulating trademark squatting,and gave recommendations. It also convened discussions on image copyrightinfringement to examine the pronounced issues and addressed social concerns byproviding clear adjudication standards.

Liaoning Province: The courts conducted intellectual property-related studies on topicssuch as the Belt & Road Initiative and pilot free trade zones to find outwhat companies need in terms of judicial protection.

Zhejiang High People’s Court: Surveyed more than 20 companies within theprovince to effectively address the judicial protection needs ofinnovation-based businesses.

Heilongjiang Province: The courts conducted in-depth studies on non-state enterprises anddeveloped manuals to educate the public to better protect the intellectualproperty of private enterprises and drive the development of the privateeconomy.

Hunan Province: The courts took the initiative to meet the judicial needs ofenterprises and tech parks, and enhanced awareness among businesses ininnovation-based development.

Productive research studies. The Supreme People's Courtinitiated  surveys relating to revisionof the Patent law, patent linkage, and business model innovation. The surveysculminated in research outcomes such as the “Recommendations on Reforming and ImprovingLegislation for Patent Invalidation Procedure”, “Recommendations on Legislatingfor Patent Linkage”, and “A Study on the Judicial Protection of Business Model Innovations”.Other research efforts include:

Beijing High People’s Court: Reviewed the guidelines for adjudicating administrativedisputes relating to the granting and validation of trademarks to guidelitigation behaviour.

Zhejiang High People’s Court: Conducted studies on adjudication rules forintellectual property disputes involving e-commerce platforms to share judicialexperiences relating to e-commerce business.

Fujian High People’s Court: Provided opinions on how the courtscould improve judicial protection of intellectual property to better serve and fosterinnovation, entrepreneurship and creation.

Jiangsu High People’s Court: Proposed more rigorous judicialprotection of intellectual property to underpin the province’sinnovation-driven economic development.

IV. Increased transparency of thecourts to augment credibility of intellectual property adjudication

The courts are fully aware of the need for transparency, and have maderemarkable progress in developing a judicial mechanism that upholds justicethrough enhanced transparency and that champions credibility, openness,dynamism, transparency and accessibility.

(I) A more open court system

The courts have opened up further to allow public access to courthearings. This is in line with the directive that open courts should be therule and closed courts the exception. They have also found innovative ways forthe public to access court hearings and expanded the types of hearing permittedfor public observation. Some exemplary practices are:

Guangdong High People’s Court: Held a public hearing on the dispute between Shenzhen-basedJiedian Technology Co., Ltd and Laidian Technology Co., Ltd over theinfringement of utility models. About 100 people attended the hearing. Livestreaming over the internet was also accessed by nearly 10,000 viewers.

Sichuan High People’s Court: Heard a trademark infringement dispute and issued decision withinthe same hearing session. People’s Congress deputies and members of the People’sPolitical Consultative Conference  wereinvited to the observe hearing.

Inner Mongolia Autonomous Region High People’s Court: Launched "On-Campus Hearing" where approximately 300teachers and students attended the hearing for a dispute over copyrightinfringement.

(II) Greater use of cases for publiclegal education

The Supreme People’s Courtparticipated in a production by the China Central Television’s (CCTV) entitled“Judge Talk (Dafaguan Shuo)” in the third season of “China Rule of Law (FazhiZhongguo Shuo)”. It was involved in the planning, scriptwriting, productionand recording, and broadcasting of the programme. This was an important joint-publicityeffort by the Supreme People’s Court and CCTV-12 in celebration of the 70thanniversary of the founding of the People’s Republic of China. Vice President ofthe Supreme People’s Court Justice Tao Kaiyuan gave a talk in one episode. Accordingto statistics, nearly 50 million viewers watched the live telecast of theprogramme. There were also 1,357 online news articles relating to theprogramme, 78 news articles published in newspapers and magazines, 151microblog comments, 99 blog articles, 2,238 WeChat articles, and 294 apparticles. The public applauded the court for its outstanding work inintellectual property protection.

The “WIPOCollection of Leading Judgments on Intellectual Property Rights: People’sRepublic of China (2011–2018)” was launched at the Second Annual WIPOIntellectual Property Judges Forum. WIPO's legal counsel Frits Bontekoe spokeat the launch event. The forewords of the volume were written by WIPO DirectorGeneral Francis Gurry and Justice Tao Kaiyuan. This casebook of judgments givesthe global intellectual property community access to landmark judgments fromChina and allows China’s leading cases to play their demonstrative role and Chinesejudgements to create greater impact. Other key endeavours include:

The Supreme People’s Court:Organised a series of activities, including a Judgement Week and a “Judges Goon Campus” to make better use of cases to educate the public on the law, and instilgreater respect for knowledge and awareness of protecting intellectual property.When hearing important cases, the court also ensured that it invited NPCdeputies, CPPCC members, and SPC’s special supervisors and advisors as well as fellowsof the Chinese Academy of Sciences, lawyers and representatives of industryassociations to observe the proceedings and share their insights.

Beijing Xiong’an New AreaIntermediate People’s Court : Organised the “ProtectIntellectual Property Outreach Event” to educate businesses newly establishedin the area, such as Baidu, Tencent, JD and Huawei, on intellectual propertylaws and regulation.

Zhejiang High People’s Court : Established the “Zhejiang Balance (Zhejiang Tianping)” WeChat OfficialAccount, the “IP Converge (Zhi Zhi Hui)” website, and the “Zhejiang IPLaw Connect (Zhe Zhi Xi Fa)” column to lay the ground for regularoutreach activities. During the year, the court published 85 articles, and madeavailable live streaming of 26 hearings which boast of 900,000 visits.

Jiangsu High People’s Court : Organised a walkabout for the People’s Congress deputies and members of theCPPCC committee cum media event. The effort was effective and well-received.

(III) Joint outreach

The Supreme People’s Court organised the “IP JudicialProtection-Anhui Expedition”, for which selected NPC deputies, SPC’s specialsupervisors and Anhui Province’s leaders, together with the centralgovernment's media agencies, visited some Anhui courts and key hi-tech companies.During their visits, the delegation learnt about the state of intellectualprotection in Anhui Province, innovative outcomes, and focused on discoveringthe judicial needs of commercial entities to better serve the development of innovation-basedbusinesses. Other outreach activities include the “IP Courtroom Open Day” and“IP Protection Judgement Week” during which many major cases involving advancedtechnology such as medical equipment, internet data mining and opticaltechnology were heard. The court also launched the “Faxin-IP” online project tocreate a unified big data intellectual property service platform by integratingand upgrading the existing intellectual property case guidance platform and throughresearch and development. The platform aims to provide free retrieval andconsulting services for intellectual property judges nationwide. Otherendeavours include:

Hebei High People’s Court : Combined 26-April outreach activities with the publicity campaign to promotethe “Regulations on the Protection of Olympic Symbols” to publicise extensivelythe relevant laws and regulations. It was a successful event.

Shanxi High People’s Court : Visited the province’s Comprehensive Reform Pilot Zone to find out the needs ofbusinesses and set forth requirements on how the courts should provideinnovative services to better serve businesses and create an environment thatconduces to innovation.

Tibet Autonomous Region HighPeople’s Court : Organised legal outreach activities in theChinese and Tibetan languages based on local folk customs and religious beliefsin interesting formats.

Ningxia Autonomous Region HighPeople’s Court: Organised outreach activities andconsultations, including providing on-site legal advice.

V. Greater cooperation and exchangefor greater impact in the intellectual property judicial landscape

Given the increasingly open andinclusive world, intellectual property adjudication should be based on China'snational circumstances, a global mindset, and an international vision. Itshould also promote the sharing of China’s experience and wisdom.

(I) Serving the needs ofinternational relations for the larger good

The Supreme People’s Courts has intensified thestudy of intellectual property issues emerging from foreign trade and economicnegotiations, and strengthened its adjudication guidance and supervision of thelower courts according to law.

Judges fromthe Supreme People’s Courts participated in bilateral and multilateraldialogues and exchanges, including negotiations on the “Convention on theRecognition and Enforcement of Foreign Judgments in Civil or CommercialMatters” adopted by the Hague Conference on Private International Law (HCCH). SPChas made important contributions to the satisfactory resolution of intellectualproperty issues relating to the Convention.

(II) Increasing China’s impact in theworld

In June2019, the Supreme People’s Court and WIPO co-organised the Seminar onApplication of WIPO Mediations Service in Intellectual Property Litigation,during which participants from WIPO, Singapore, the Supreme People’s Courts andour local courts shared their insights on WIPO’s alternative dispute resolutionmechanism. Director of the WIPO Arbitration and Mediation Centre Erik Wilberscommended China for being the organisation’s close partner. SPC alsoparticipated in the International Cooperation in Fighting against IntellectualProperty Right Infringement at the second China International Import Expo inShanghai, during which it shared the importance of using punitive damages todeter and prevent repeat and malicious infringing behaviour, as part of aneffort to engender a legal environment that fosters protection of intellectualproperty, that makes the infringer pay for its wrongdoing, and that sanctionsoffences.

JusticeLuo Dongchuan, Vice President of the Supreme People’s Court, held more than 20 constructivemeetings and discussions with representatives  from WIPO, AIPPI, AIPLA, ICJ, the SupremeCourt of Cuba and High Court of Justice in London. Francis Gurry,director-general of the WIPO, spoken favourably of the establishment of the SPCIP Court, and said that the court embodies China’s commitment to protectingintellectual property and its determination to provide fairer and moreefficient protection for intellectual property. Abdulqawi Ahmed Yusuf, Presidentof the International Court of Justice, commended that China’s achievements inthe legal sector was not only reflected in the country’s overall effort todevelop a robust legal system, its achievements in specific areas in field ofintellectual property also deserves admiration.

(III) Widened channels of foreigncooperation

In response to the global interest in how judicial protection ofintellectual property works in China, the People’s Courts have actively engagedin dialogues through different platforms to build understanding of China’ssituation and create greater impact at the international level.

To support WIPO’s collaborativeprogrammes, our judges participated in the Roundtable on WIPO-China Cooperationand Major Intellectual Property Developments in China. We havealso send representatives to participate in WIPO'sMaster Dialogue on IP Adjudication. A delegation of patent judges visited theEuropean Union. These were occasions at which our judges shared China’s latestdevelopment and historic achievements in intellectual property adjudication.Other international activities in the year include participating in the SecondAnnual WIPO Intellectual Property Judges Forum, 9th OECD/ Korea Policy Centre(KPC) Competition Law Seminar for Asia-Pacific Judges, AIPPI Annual WorldCongress, 2019 Annual Meeting of the International Trademark Association(INTA),and the European Communities TradeMark Association (ECTA) Annual Conference, and the Japan-China-Korea IPSymposium.

VI. Capacity-building for judges aspart of an incessant effort to improve adjudication capability

Political cultivation has always been the guiding light for the People’sCourts. By continuing to develop the judges’ political awareness and by takingbig strides to revolutionise the judiciary and putting together a team offull-time, professional and specialised judges, the courts have been working atbuilding a team of intellectual property judges that have a firm politicalstand, a holistic view and international perspective, and extensive legal expertiseand technical know-how. Organisational- and people-building are key to standingthe courts in good stead for intellectual property adjudication in the new era.

(I) Ideological and politicaleducation

Given that political cultivationis our priority, the courts have organised educational activities to remind everyoneof the motto: “Do not lose sight of our original aspirations; be mindful of ourmission (buwang chuxin, laoji shiming)”. Various institutions governingintraparty political activities were also harnessed to awaken judges to theneed to guard their original aspirations and to buttress their ability to fulfiltheir mission. Platforms such as the "New Knowledge Forum" and "Forumon Intellectual Property Court" were established to enable online andoffline education and management for party-development. The courts have also adopteda party-development approach for round-the-clock online and offline educationand management. The SPC IP Court’s party branch has also won the “100 Model ofExcellence” accolade presented by Banner (“qizhi”), a magazinepublished by the State Organs Work Committee of CPC Central Committee, for the secondParty-building Innovative Outcomes Award. It was the sole recipient of theaward within the court system.

(II) Developing a sense of honour andself-discipline

The courts have managed court and partyoperations based on rigorous standards, having implemented the “Eight-PointFrugality Code (‘ba-xiang gui-ding’)” and its rules of implementation.They have also stamped out "the four forms of decadence" (i.e.formalism, bureaucratism, hedonism and extravagance) or si feng, and havedeepened the development of party ethics and clean governance and their fightagainst corruption.

(III) Building judicial capabilities

By focusing on the overallrequirements of the "five excellences (wuge guoying)", i.e.excellence in belief, political stance, sense of responsibility, ability andbehaviour, the courts have strengthened people development at every turn. Theyhave focused efforts at building a quality team of effective, loyal, incorruptand responsible individuals to helm the courts of the new era and drive newdevelopments. The Supreme People's court has also increased its involvement incoordinating and guiding the lower courts, and encouraged the courts to planfor the training and creation of a pool of professional intellectual propertyjudges, and the establishment of different of personnel exchange mechanisms. Toelevate judicial capabilities, the courts have also adopted many differentapproaches, including special training, thematic seminars, on-the-job training, exchanges and secondment, andobservation of court proceedings. These efforts will help build an adjudicationteam that believes in perpetual learning, which will in turn enable the courtsto adapt to new circumstances and the demands of intellectual propertyadjudication, and judges to continue building their professional capabilities.

Conclusion

Today’s world is defined by unprecedented changes which quicken the paceof reform of the global governance system and the international order. As thenext wave of technological revolution and industrial reform arrives withastonishing force, protection of intellectual property is confronted with newissues, new tasks and new challenges. As the People’s Courts discharge theirduties and responsibilities, they will discern new trends and circumstances,and will leverage their judicial powers to protect intellectual property. They willalso strive to provide effective judicial service and safeguards to achieve sustainedand robust economic development and social stability, build a comprehensive xiaokangsociety, and bring the 13th five-year plan to a successful completion.

Introduction

In the Report to the 20th National Congress of the Communist Party of China, it was emphasized that pursuing high-quality development is one of the essential requirements of the Chinese path to modernization; it was clearly defined that innovation will remain at the heart of China’s modernization drive; and special deployment was made to strengthen the legal protection of intellectual property rights. In 2022, Chinese courts adhered to Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, put the guiding principles from the 20th National Congress into action, and fully implemented Xi Jinping Thought on the Rule of Law, while keeping in mind the top priorities of the country. In order to make the people feel justice has been served in each and every judicial case, Chinese courts enhanced the sense of responsibility and mission in improving the trial of intellectual property (hereinafter “IP”)cases in the new era and continued to improve judicial protection of IP rights.

1. Fully Utilized Trial Functions to Support Innovation-
   Driven Development

In 2022, Chinese courts focused on bolstering their trial functions, while trying various IP cases fairly and efficiently in accordance with the law. The courts newly accepted 526,165 IP cases of first instance, second instance, and remanded for retrial, and concluded 543,379 cases (including carried over cases, ditto hereinafter), a year-on-year decrease of 18.17% and 9.67%, respectively.

In 2022, local people’s courts at all levels newly accepted 438,480 civil IP cases of first instance and concluded 457,805, a year- on-year decrease of 20.31% and 11.25%, respectively. In these newly accepted cases, the number of patent cases increased by 23.25% to 38,970 respectively from the previous year; trademark cases dropped by 9.82% to 112,474 year on year; copyright cases decreased by 29.07% to 255,693; technology contract cases grew by 5.55% to 4,238; competition cases increased by 11.51% to 9,388; other cases of civil IP disputes fell by 15.66% to 17,717 year on year. In 2022, local courts newly accepted 46,524 civil IP cases of second instance, down 5.22% year on year; and concluded 46,563, up 2.41% on a year-on-year basis. The Supreme People’s Court newly accepted 3,786 civil IP cases and concluded 3,073, a year-on-year drop of 10.77% and 13.61%, respectively.

In 2022, local courts newly accepted 20,634 administrative IP cases of first instance and concluded 17,630, a year-on-year increase of 0.35% and decrease of 8.85%, respectively. Among those newly accepted cases, the number of patent cases increased by 3.65% to 1,876, trademark cases grew by 4 to 18,738, and copyright cases fell by 7 to 12. In addition, local courts newly accepted 5,897 administrative IP cases of second instance and concluded 7,285 , down 28.22% and 1.79% respectively compared to 2021. Of those cases, 5,518 were sustained, 1,650 were reversed, 3 were remanded for retrial, 78 were withdrawn, 10 were dismissed, and 26 were resolved in other means. The Supreme People’s Court newly accepted 1,456 administrative IP cases, a drop of 48.95% compared to 2021, and concluded 1,542, down 38% year on year.

Local courts newly accepted 5,336 criminal IP infringement cases of first instance and concluded 5,456, down 14.98% and 9.76% respectively. In particular, 4,971 trademark infringement criminal cases were newly accepted, and 5,099 were concluded, a year- on-year drop of 15.3% and 9.86%, respectively; 304 copyright infringement criminal cases were newly accepted, and 302 were concluded, down 8.71% and 7.93%. Other criminal cases newly accepted reached 61, and 55 were concluded, down 13 and 6 respectively compare to the figures of 2021. Local courts newly accepted 979 criminal IP cases of second instance and concluded 977, a decrease of 6.76% and 2.01% compared to 2021, respectively.

In 2022, IP cases accepted by Chinese courts are mainly characterized by the following features:

The number of technology-related cases continued to increase, the demand for IPR protection in central and western China was high, and the importance of IPR judicial services to high-quality development was emphasized further. In 2022, the IP Court of the Supreme People’s Court continued to accepted a significant number of new civil non-procedural cases in second instance involving technical IPRs. Significantly more case of first instance involving patent and technology contract were accepted by local people’s courts at all levels. Courts in Jiangsu province newly accepted 1,817 new cases of disputes over ownership and infringement of technical IP rights, a 17.61% increase from the previous year. Year-on-year; the number of new IPR cases received by the courts in Shanxi province and Hainan province rose by 22.21% and 72.58%, respectively. In Hebei province, the number of IP cases newly accepted and concluded by local courts increased by 45.94% and 106.01% year on year. The number of new civil IPR cases received in courts of Liaoning province increased by 61% annually. The number of new civil IPR cases of first instance accepted by courts in Jiangxi province increased by 22% compared to 2021. In addition, the number of cases accepted by the courts in Hunan province, Heilongjiang province, and the Xinjiang Production and Construction Corps (hereinafter; referred to as “XPCC”)also continued to grow steadily.

The Internet online trial mechanism for IP cases continued to see innovations, the development of smart court architecture was fostered, and the mechanism for convenience and benefit of the judiciary improved. Online trial platforms were leveraged by local courts to facilitate online court hearings, services, and other legal processes of IP cases, which shortened the duration of litigation and reduced litigation costs. For instance, courts in Shanghai accepted 38,505 IP cases online, with over 20,000 online court hearings and meetings and more than 170,000 electronic services. Courts in Henan province recorded an online filing rate of over 90%, with 16,023 IP first instance cases were filed online. In Qinghai, the online filing rate for IP cases reached 62.7%, with 898 electronic services were conducted via the service platform. In Guangxi, the Intermediate People’s Court of Guigang utilized digital technology to have approximately 70% of all accepted IP cases filed online annually. The Qingdao Intellectual Property Court developed an online asynchronous evidence cross-examination system, which enabled relevant parties to upload electronic evidence online and complete cross-examination, thereby streamlining pre-trial procedures.

The substantive resolution of disputes by Chinese courts continued to be strengthened, and the protection of the rights and interests of rights holders became more comprehensive, increased public satisfaction with the judicial protection of IP rights. Local Chinese courts mediated and resolved 44,155 civil IP cases of first instance, a mediation and resolution rate of 9.64%, up 0.78% compared to 2021. Additionally, 2,894 civil IP cases of second instance were mediated and resolved at a rate of 6.22%, an increase of 0.57% from the previous year. Notably, the rates of mediation and withdrawal of IP cases recorded by courts in Tianjin, as well as Hebei, Guangdong, and Heilongjiang provinces were particularly high, reaching 75.51%, 73.48%, 52.94%, and 66.6%, respectively. The high rates of withdrawal reflect the effective reduction of the burden on litigants and the complete maintenance of social stability and harmony. Courts in Jiangsu province heard 97 IP cases in which punitive damages were applied, up 21.25% year on year; the Primary People’s Court of Pudong New Area of Shanghai applied punitive damages in 25 cases; a total of 169 million yuan was awarded as punitive damages for 29 IP cases heard by the Intermediate People’s Court of Shenzhen; local courts in Hunan province conducted a special judicial campaign and concluded 3,796 cases involving IP rights, with 60.4315 million yuan awarded; in Guangdong province, less than 20% of civil IP cases accepted by local courts resulted in forced enforcement, with a 98% enforcement and closing rate. In response to IP infringement in critical areas influencing people’s livelihoods, such as food and drug production, courts in Jiangsu province issued nearly one hundred orders prohibiting the relevant entities from engaging in the specified industry. According to the relevant applications, the Intermediate People’s Court of Guiyang in Guizhou province heard 25 IP preservation cases and froze properties worth 40.1 million yuan last year. The cost of IP infringement increased dramatically, and rights holders were effectively compensated for their losses.

More cases were accepted by courts at lower levels. The quality and effectiveness of IP case trials have improved as a result of jurisdiction diversity of intermediate and high courts. In Jiangsu province, primary people’s courts heard 65.25% of all IP cases in the province, an increase of 10.52% year on year. Meanwhile, the proportion of cases heard by intermediate and high courts dropped to 31.56% and 3.19%, respectively. Similarly, in Chongqing, the number of IP cases newly accepted by primary people’s courts accounted for 75.2% of all IP cases in the city, up 28.1% compared to 2021; the proportion of cases heard by intermediate and high courts, in contrast, decreased by 29.9% to 21.3% and increased by 1.8% to 3.5%, respectively. This demonstrates the gradual formation of a “pyramid” pattern with respect to the trial of IP cases. Of the first- instance civil IP cases concluded by local courts, 320 cases were concluded under the elevated jurisdiction of higher courts, more than three times the figure in 2021. 63 civil IP cases were submitted to a higher-level court in Jiangxi province, and 15 such cases that were submitted to a higher court in Guangdong province due to their novelty, complexity, or guiding significance in law application, thus effectively promoting the uniformity of judicial rules.

1. Encouraged and Assured Scientific and Technological
   Innovation to Promote Self-reliance and Strength

Speeding up efforts to achieve greater self-reliance and strength in science and technology is the path China must take to advance high- quality development. Chinese courts maximized the role speeding up efforts to achieve greater self-reliance and strength in science and technology is the path China must take to advance high-quality development. Chinese courts maximized the role of IP trials in

fostering and safeguarding scientific and technological innovation. Chinese courts provided high-quality judicial services to support basic research, protected original and pioneering scientific and technological advances, and eliminated obstacles that impeded high- quality development.

1. The Chinese Judiciary Continued to Promote the Unification of Judicial Standards in Technology-Related Cases

Concentrating on bolstering IP protection, Chinese courts conducted a more stringent examination of the legitimacy of administrative acts pertaining to patent granting and rights reexamination and promoted the application of unified administrative and judicial standards, thereby enhancing the quality of patent granting and rights reexamination. In 2022, Chinese courts maximized their responsibilities in rule-setting and value guidance for protecting achievements of scientific and technological innovation, summarized and proposed new judicial protection rules, and encouraged the continuous innovation and upgrading of technologies and industries. the Supreme People’s Court reasonably defined the trial functions of courts at four levels and specified that cases involving ownership and infringement disputes related to invention patents, utility model patents, new plant varieties, integrated circuit layout designs, trade secrets, and computer software shall be centrally adjudicated by the intellectual property courts, intermediate people’s courts of provincial capitals, and intermediate people’s courts designated by the Supreme People’s Court. This effectively promoted the nationwide application of consistent judicial standards in technology-related cases and improved judicial protection of significant scientific and technological innovations. The Supreme People’s Court released the Top 10 Intellectual Property Cases and 50 Typical Intellectual Property Cases in 2021, including 11 technology-related cases involving infringement of technology secrets, plant variety rights, and invention patents, which provided useful guidance for trial practices. In addition, the Supreme People’s Court conducted research on the implementation of judicial interpretations such as Provisions on Several Issues Concerning the Application of Law in the Trial of Civil Cases involving Patent Disputes Related to Drugs Applied for Registration in order to quickly summarize the trial experience. In the trial of the patent right ownership dispute over the “dust removal device and system for gasification furnaces'： the Supreme People’s Court defined the right basis for the source party and the technology improvement party. In the trial of the administrative dispute over the invalidity of the patent rights between Qilu Pharmaceutical and Sihuan Pharmaceutical, the judicial standards for the creativity of drug patents and adequate disclosure in specifications were clarified. In the trial of the infringement dispute over the utility model patent rights of the “integral geocell”, it was determined whether the defense concerning a legitimate source complied with reasonable diligence requirements.

2. Chinese Courts Committed to Facilitate and Protect Basic Research and Original Innovation

Based on the requirement that the frontier science and technology in the world should be integrated with the major national strategic needs, economic and social development goals and the livelihoods and wellbeing of the people, Chinese courts intensified IP protection in key areas, core technologies, and emerging industries. Meanwhile, the courts worked to ensure the legitimate rights and interests of innovators and provided judicial services to achieve breakthroughs in core technologies. The Supreme People’s Court implemented the arrangements of the Party Central Committee on the revitalization of the seed industry and issued the Guiding Opinions on Protecting the Intellectual Property Rights of the Seed Industry, Combating Infringement of Counterfeit and inferior goods, and Creating a Good Environment for the Revitalization of the Seed Industry jointly with the Ministry of Agriculture and Rural Affairs and other departments. In addition, the Supreme People’s Court released the second group of model cases from Chinese courts regarding judicial protection of IP rights in the seed industry, supported the establishment of the Base of Chinese Courts for the IP Protection in Germplasm Resource Research (Hainan), and held the Seminar of Judicial Protection for IP Rights in Germplasm Resource for the first time in the name of the Base. The case of the “Jinjing 818” rice plant variety infringement was selected as one of the “Top Ten Cases of Promoting the progress of the Rule of Law in the New Era in 2021.” The Supreme People’s Court concluded China’s first drug patent linkage lawsuit, which was nominated as one of the “Top Ten Cases of Promoting the progress of the Rule of Law in the New Era in 2022” and accelerated to shape and improve the drug patent linkage system. During the two related cases of patent and technology secret infringement involving “melamine,” the defendants were ordered to compensate the rights holders for a total of 218 million yuan in economic losses with several and joint liabilities, which reflects the judicial goal of vigorously protecting technological innovation. During the trial of the technology secret infringement case of “oil and gas microorganism exploration'； the Supreme People’s Court delivered a strong signal to improve the protection of technology secrets. The High People’s Court of Jiangsu Province, along with the competent provincial departments, signed a memorandum of understanding on “Building Strong Industrial Chains via IP Protection and Developing an Independent and Self­controlled Modern Industrial System,” which established a working mechanism to develop the key industrial chains. The Suzhou Intellectual Property Court facilitated a package settlement between the parties in a invention patent infringement dispute involving a US corporation, effectively protecting the legitimate rights and interests of innovators. The Hefei Intellectual Property Court met with administrative and law enforcement agencies as well as companies based in Anhui Province, to solicit and respond to commercial innovators for rights protection.

• Increased the Judicial Protection of Trademarks to
  Enable the Growth of Successful Brands

Chinese courts continued to strengthen the judicial protection of trademark rights, improved the trial quality of administrative cases on trademark registration and review, as well as civil cases on trademarks, and upheld the order of trademark application, registration, and use. They directed rights holders to register trademarks in compliance with the law, regulated the use of trademarks, and upheld the rule of law on the market, thereby encouraging the growth of successful Chinese brands in the new era.

1. Chinese Courts Improved the Quality of Trademark Registration and Review

In order to improve the trial quality of administrative cases involving trademark registration and review, steps have been taken to crack down on malicious trademark registration for the non-purpose of use. The boundaries and protective scopes of trademark rights were reasonably defined, and normalized, standardized procedures for trademark application and registration were promoted. The Supreme People’s Court and China National Intellectual Property Administration co-hosted a symposium to solicit opinions from courts across the country and provide sound suggestions and references for legislation work such as the revision of trademark laws and the legislation of geographical indications, as well as to promote the continuous improvement of the legal system for trademark regulations, which further improved the rules for trademark registration and review. The administrative case concluded by the Supreme People’s Court regarding the invalidation of the trademark “Chen Mahua” was selected as one of the “Top Ten Cases of Promoting the progress of the Rule of Law in the New Era in 2022'； which provided effective guidance for rulings of trademarks lacking distinctive features. The criteria for determining the distinctiveness of English trademarks were clarified during the retrial of the denied “BIODERMA” trademark application. In the case regarding the invalidation of the “Youlian” trademark, it was stated that trademarks violated the principle of good faith and failed to reasonably avoid prior registered trademarks should not be registered. Beijing High People’s Court established two distinct teams to try administrative trademark rejection review cases and administrative cases proceeding involving regular trademarks. This facilitated the intensive case management and reduced the average review time for administrative trademark rejection review cases to 35 days, making it possible to “quickly try simple cases, and scrutinize complicated cases.”

2. Chinese Courts Strengthened the Judicial Protection of Trademarks

People’s courts continued to strengthen the role of trademark using in determining the scope of trademark right protection and encouraged trademark owners to use trademarks in practice continuously to give full play to the identification function of trademarks, while protecting the legitimate rights and interests of consumers. In accordance with the law, the judicial protection of well-known trademarks, traditional brands, and time-honored brands was strengthened, and the development of brands was encouraged. The rules and regulations for protecting geographical indications were improved, and infringement on geographical indication rights were curtailed. During the trademark infringement case trial of the “Nanmiao” tofu, the Supreme People’s Court protected the legitimate use of the geographical name in the registered trademark by other operators. In the “Yipinshi” trademark infringement case trial, the abusive use of rights by maliciously obtaining trademarks and initiating infringement lawsuits was halted in accordance with the law. The organizing committee of the Beijing Winter Olympics and Paralympic Winter Olympics sent a letter of appreciation to Beijing High People’s Court and the Beijing Intellectual Property Court for supporting the protection of Olympic brands. The High People’s Court of Sichuan Province heard the “Qinhuajiao(green pepper)” trademark infringement case in accordance with the law, maintained the order of trademark usage, and safeguarded ethical business practices. To enhance judicial protection of geographical indications, the High People’s Court of Zhejiang Province launched a major research project initiative on the judicial protection of trademarks with geographical indications to enhance judicial protection of geographical indications. The Intellectual Property Court of Hainan Free Trade Port conducted research to develop a guide for judicial protection of geographical indications, exploring the integration of IP protection and rural revitalization. Beijing Xicheng District People’s Court visited time- honored brands within its jurisdiction and established a IP cases trial supervisory mechanism to promote time-honored brands rejuvenation.

1. Strengthened Copyright Trials to Contribute to the
   Building of a Country with a Strong Culture

People’s courts fully leveraged the guiding role of copyright trials in promoting outstanding culture, strengthened protection of copyright and related rights, promoted the development of culture and science, and contributed to the building of a socialist country with a strong culture.

1. Chinese Courts Vigorously Promoted Advanced Socialist Culture

Chinese courts continued to be dedicated to promoting advanced socialist culture based on their functions in judicial trials. They also facilitated the creative transformation and innovative development of fine traditional Chinese culture, and sparked the creative vitality for cultural innovation and creation, thereby bolstering the cultural- ethical driving force necessary to realize the great rejuvenation of the Chinese nation. Chinese courts heard cases involving the inheritance of classic Chinese revolutionary works and the protection of the legitimate rights and interests of heroes, heroines and martyrs according to the law, while vigorously promoting the core socialist values. Copyright protection for genetic resources, traditional culture, traditional knowledge, and folk art was intensified to promote the consolidation and utilization of intangible cultural heritage. Chinese courts prioritized copyright protection in new areas such as live streaming, short videos, animation and games, and cultural creativity, clamping down on piracy and plagiarism while promoting the prosperous development of cultural undertakings and industries. To improve the market environment for digital culture, courts in Beijing, Tianjin, and Shanghai, issued injunctions against behaviors such as the piracy of the Beijing Winter Olympics and the Qatar World Cup. The Suqian Intermediate People’s Court of Jiangsu Province analyzed the characteristics of local book piracy cases and submitted judicial recommendations to the administrative authority, which effectively reduced book infringements and piracies. The Intermediate People’s Court of Qinzhou, Guangxi, concluded a cross­provincial copyright infringement crime case involving the sale of pirated textbooks and reference books , which was selected as one of the Top Ten Typical Cases of Youth Copyright Protection in 2022. The Beijing Internet Court has released version 2.0 of the Tianping Blockchain-Copyright Chain co-governance platform, which achieved full coverage of digital copyright rights confirmation, authorization, transaction, and protection, thereby promoting the development of the copyright market in a healthy and orderly manner. The Quanzhou Dehua People’s Court in Fujian province established a “1-2-3-4” protection mechanism targeting ceramic IP rights to address 4 main challenges: evidence preservation, law enforcement & supervision, social recognition, and dispute resolution, which was formally acknowledged by the World Intellectual Property Organization (WIPO).

2. Chinese Courts Enhanced Judicial Protection of Copyright in the New Era

People’s courts fully implemented the Copyright Law to protect copyright and related rights. The Supreme People’s Court continued to summarize judicial experiences and conducted researches jointly with local courts, and drafted judicial interpretations of the Copyright Law to solve challenging legal issues in the field of copyright trials. The Supreme People’s Court heard and reversed the judgment on the copyright infringement case of the “Big-Headed Kid” artwork, which clarified the rules for determining copyright ownership and achieved positive social effects. In a case involving the jurisdiction query for the infringement of the right to disseminate works over the Internet, the Supreme People’s Court specified the jurisdiction of civil cases involving such infringement and the judicial interpretation application standards, providing sound guidance for copyright trial practices. Beijing High People’s Court provided a reply on determining the royalty standards for image infringement cases, which promoted the adoption of consistent judicial standards concerning similar cases in its jurisdiction. In Hubei province, local courts promoted the use of standardized table judgment in copyright cases, which significantly shortened the trial term. Sichuan High People’s Court and Chongqing High People’s Court jointly issued minutes to unify the judicial standards concerning infringement cases of the right to disseminate information over the Internet in their jurisdictions. Heilongjiang High People’s Court, along with 9 other government departments included the Heilongjiang Provincial Copyright Administration, jointly signed a notice to crack down on violations of the Copyright Law to strengthen criminal protection of copyright. Beijing Intellectual Property Court made well-coordinated efforts and mediated a series of lawsuits between companies regarding copyright infringement of Chinese academic literature network databases, settled over 1,000 cases in the city and properly resolving potential disputes.

1. Maintained a Sound Legal Environment for
   Competition to Stimulate Innovation and Creativity

People’s courts continued to enhance anti-monopoly and anti-unfair competition judicial efforts. By strengthening the fundamental status of competition policies, maintained a sound legal environment for fair market competition, optimized the business environment, in order to make contribution to the development of a sound system of socialist market economy.

1. Anti-Monopoly and Anti-Unfair Competition Judicial Efforts Improved

In 2022, People’s courts continued to improve the application rules in the field of competition, strengthened judicial trials concerning unfair competition, and maintained the rule of law in market competition. The Supreme People’s Court issued the Interpretation of Several Issues Concerning the Application of the Anti-Unfair Competition Law of the People's Republic of China, which provided detailed rules regarding the Anti-Unfair Competition Law, including its General Provisions and articles on counterfeiting and confusion, false publicity, commercial defamation, and unfair competition on the internet, etc. Furthermore, the document also unified the relevant judicial standards and responded to the judicial needs arising from new fields and new business practices. The Supreme People’s Court researched and drafted new judicial interpretations on anti-monopoly civil litigation, solicited public opinions, and improved judicial rules for anti-monopoly cases, while clarifying the judicial standards for determining monopolistic behaviors. The Supreme People’s Court held a press conference on Chinese courts’ strengthening judicial practice of anti-monopoly and anti-unfair competition, The Court released 10 typical cases for each category to enhance the public legal awareness for respecting and protecting fair competition. Additionally, the press conference also guided courts at all levels to punish monopolistic behaviors and maintain the market order for fair competition. People’s courts at all levels enhanced judicial efforts in key fields and critical junctures such as platform economies, core technologies, medicine, and communication, cracked down on monopolistic agreements, as well as exclusive and restrictive competition behaviors with the abuse of market dominance. Chinese courts also refined the criteria for identifying monopolistic behaviors involving internet platforms, specified the rules for determining unfair competition behaviors such as traffic hijacking and interference, and regulated and directed capital operation in healthy manner in accordance with the law. During the trial of the “Zhang Bainian” case of trademark infringement and unfair competition dispute and the Bairui Runxing case of unfair competition dispute, the Supreme People’s Court clearly stated the responsibilities of sellers in disputes related to unfair competition. In the "kindergarten” case concerning horizontal monopoly agreements and the case involving the abuse of market dominance by public utility companies in relation to water supply and drainage, the Supreme People’s Court responded to public concerns regarding market competition behaviors that affect people’s livelihood and promptly forbidden exclusive and restrictive behaviors in competition, ensured that the public benefit from fair competition.

2. Healthy Development of the Digital Economy Promoted in Accordance with the Law

Efforts were made to explore and strengthen judicial protection of IP rights in the digital economy field, provide robust judicial services and guarantees to fully leverage the function of data, and improve the efficiency of data governance, thereby promoting high-quality development of the digital economy. Chinese courts improved hearings of cases involving data cloud storage, open-source data, data ownership, data trading, data services, and unfair competition in data markets to effectively maintain data security. In addition, research was carried out on IP rights judicial protection of data rights, as well as fair competition in the era of the digital economy, and local courts were guided to explore trial models catering to the demand of the digital economy and promote the judicial protection of innovative achievements in the digital economy. During the trial of the “web crawler platform data” case of technology secret infringement, the Supreme People’s Court specified that platform data can be protected as technology secrets, which strengthened the protection of data rights and interests with competitive advantages and values created by platform operators through legitimate business operations. Jiangxi High People’s Court produced opinions on IP judicial services to safeguard the development of the digital economy and proposed 13 measures of services and guarantees. Shenzhen Intermediate People’s Court of Guangdong province issued implementation opinions on enhancing judicial protection of IP rights in the digital economy, contributing to the high- quality development of the digital economy within the city. Beijing Intellectual Property Court concluded research including Research on Judicial Rules Regarding Competition Behaviors in New Business Practices and Models in the Digital Economy, properly closed multiple data infringement cases, continued to explore judicial rules where the Anti-unfair Competition Law is applied to protect data.

1. Deepened Judicial Reforms to Improve Efficiency
   and Quality of IPRs Protection

The judicial reform in IP domain was deepened by people’s courts, by continuing to improve the specialized trial system for IP cases, strengthening the IP litigation system, and deepening the “three- in-one” reform of IP trials. These efforts helped unify the legal application standards, enhanced diversified resolution of disputes, and improved the coordination between administrative enforcement and judicial practice, thereby enabling the comprehensive improvement of judicial protection for IP rights.

1. Promoted the Modernization of the Trial System to Boost Judicial Capacity

Led by the IP trial department of the Supreme People’s Court and backed by IP divisions of local courts, China’s specialized IP trial framework with 4 demonstrating IP courts and 27 IP divisions of local intermediate people’s courts as the focuses, saw further improvement. The Supreme People’s Court issued Several Provisions on the Jurisdiction of Civil and Administrative Intellectual Property Cases of First Instance, as well as its associated documents: Notice of Issuing the Standards for Civil and Administrative Intellectual Property Cases of First Instance under Jurisdiction of Primary People's Courts, and Notice Regarding Issues Concerning the Appellate Jurisdiction of Cases Involving Disputes over Invention Patent and Other Intellectual Property Contracts. The documents established a judicial protection system with sound jurisdictional rules, reasonably defined the trial functions of courts at four levels, and optimized the allocation of trial resources. Currently, 558 primary courts, including Internet courts, have jurisdiction over civil IP cases. Meanwhile, the Supreme People’s Court continued to improve the appellate mechanism of IP cases at the national level, upgraded the retrial application procedures of IP cases, and intensified supervision and guiding to ensure the consistent application of the relevant laws and regulations. Local courts leveraged trial resources and jurisdictional mechanisms by elevating jurisdiction in accordance with the law to enable the efficient trial of IP cases and fully safeguard the rights and interests of the parties involved.

The Supreme People’s Court strengthened its guiding efforts to promote the “three-in-one” trial mechanism reform of civil, administrative, and criminal IP cases across 25 high courts, 236 intermediate courts, and 275 primary courts nationwide. In particular, 10 courts have achieved full coverage of the “three- in-one” trial mechanism for IP cases within their jurisdiction. the Supreme People’s Court conducted research to formulate normative documents on IP cases and issued the Interpretation on Several Issues concerning the Application of Law in the Handling of Criminal Cases Involving Infringement on Intellectual Property Rights (SOLICIT OPINION DRAFT) jointly with the Supreme People’s Procuratorate to solicit opinions from the public. Working with the relevant departments, Heilongjiang High People’s Court named the divisions which receive IP cases as IP divisions in the intermediate and primary courts, distributed implementation plans which guidelined the practical effect of the “three-in-one” reform. High courts in provinces including Anhui, Zhejiang, Henan, and Qinghai jointly issued guiding documents with the relevant provincial procuratorates and public security departments to improve jurisdiction over criminal IP cases, which established clear procedures and sound coordination mechanisms, thereby fully implementing the “three-in-one” reform target.

Chinese courts continued to improve the diversified technical fact­finding mechanism, and improved the “Database of Technical Investigation Talent for Chinese Courts”，with more than 500 technical investigators added to the Database. Additionally, the nationwide on-demand deployment and talent sharing mechanism saw continued improvements, effectively addressing the difficulties in ascertaining the facts of technology-related cases. High courts in regions such as Guangxi and Tibet introduced regulations on the engagement of technical investigators in IP cases and improved their institutional mechanisms according to local realities. Moreover, the IP courts in Nanjing and Suzhou fully leveraged the function of technical investigators by participated in the fact­finding investigation of 751 technology-related cases, conducted 66 inspections and preservations, and attended 490 trials and court hearings, with 388 technical investigation reports issued.

People’s courts enhanced judicial protection of IP rights. The Supreme People’s Court issued the Opinions on Strengthening Judicial Pro tection of Intellectual Property Rights of Traditional Chinese Medicine to facilitate the inheritance and innovative development of traditional Chinese medicine. Focusing on the characteristics of IP litigation, Chinese courts conducted researches to formulate specialized procedures law for IP lawsuits. Efforts were made to curb the abuse of rights and strengthen the protection of rights holders through specialized research on regulating malicious IP litigation and the accurate application of punitive damages. Shanghai High People’s Court issued opinions on handling IP cases involving small amounts to optimize and adjust the procedures for IP litigation and to try simple cases quickly and tough ones delicately. Guidelines for the application of punitive damages were drafted or issued by high courts and intermediate courts in Beijing, Shandong, Guangdong, XPCC, Inner Mongolia, and other regions, with typical cases published to promote the accurate implementation of the punitive damages system in accordance with the law.

2. Contributed to the Building of an Overarching IP Protection Framework

Chinese courts continued to improve the coordination between judicial trials and administrative law enforcement to enable the unification of judicial and enforcement standards. The Supreme People’s Court, jointly with government departments including the Supreme People’s Procuratorate, Ministry of Agriculture and Rural Affairs, Ministry of Commerce, Ministry of Culture and Tourism, State Administration for Market Regulation, China National Intellectual Property Administration, and National Administration of Traditional Chinese Medicine, improved coordination mechanisms and promoted institutional exchanges, data exchange, and information sharing. Additionally, the Supreme People’s Court released the Opinions on Strengthening Intellectual Property Appraisal jointly with departments including China National Intellectual Property Administration and the Supreme People’s Procuratorate to deepen cooperation between law enforcement departments and judicial organs in the field of IP identification. The Supreme People’s Court and China National Intellectual Property Administration co­released the Opinions on Strengthening the Coordinated Protection of Intellectual Property, including 13 specific measures to improve the coordination between administrative protection and judicial protection of IP rights. The High People’s Court of Shaanxi Province led the establishment of the Qinchuangyuan Intellectual Property Judicial Protection Center; involving 13 provincial-level government organs and academic institutions. The Center features a joint meeting system and offers a platform for cooperation. The Guangzhou Intellectual Property Court, Shanghai Intellectual Property Court, worked with China National Intellectual Property Administration, to explore the synchronization of administrative patent re-examination and infringement disputes hearings, shortening the trial cycle of patent infringement cases to improve patent protection.

Chinese courts accelerated the building of a diversified settlement mechanism for IP disputes, fully implemented the “head office to head office” working mechanism for the online connection between litigations and mediations, improved the system for the judicial confirmation of administrative mediation agreements, and built a joint force for protecting IP rights. Mediation organizations focusing on IP cases achieved full coverage in 30 regions across the country, with continued growth in the number of mediation organizations and mediators. People’s courts entrusted more than 90,000 IP disputes to pre-litigation mediation organizations, with a success rate of over 80%, effectively resolving IP disputes in China. The Supreme People’s Court intensified communication with departments including the National Copyright Administration, China Writers Association, and China Federation of Literary and Art Circles to promote the establishment of a “head office to head office” mechanism for the online connection between complaints and mediations in the field of copyright protection. Notably, the High People’s Court of Hebei province and Hebei Provincial Admiration for Market Regulation signed the Memorandum of Cooperation on the Judicial Confirmation of Administrative Mediation Agreements for Intellectual Property Disputes, which facilitated the resolution of 5 patent disputes through the mechanism. Courts in Shandong province handled 146 cases involving the judicial confirmation of administrative mediation agreements for IPRs disputes. The High People’s Court of Liaoning Province and the Liaoning Intellectual Property Office, co-issued the Notice on Establishing a Mechanism for the Online Connection Between Complaints and Mediations Involving Intellectual Property Disputes. After 11 mediation organizations set up, 110 mediators stationed and successfully mediated 2,834 IP disputes, a success rate of 96.29%. Heilongjiang High People’s Court and the Department of Justice of Heilongjiang Province co­founded an intellectual property arbitration court and issued the Notice on Properly Handling Arbitration and Preservation Cases in Accordance with the Law, which facilitated the integration of litigation, arbitration, and mediation, while strengthening well- coordinated governance.

The Supreme People’s Court endeavored to build regional mechanisms for IP protection, strengthen the development of IP integrity systems, and expand the promotion of the rule of law for the judicial protection of IP. The Court continued to guide relative courts to empower the coordinated development of the Beijing-Tianjin- Hebei region, the development of the Yangtze River Economic Belt, the integrated development of the Yangtze River Delta, the building of the Guangdong-Hong Kong-Macao Greater Bay Area, the full revitalization of Northeast China, and the building of the Hainan Free Trade Port, and the development of the Chengdu- Chongqing Economic Circle, thereby enabling well-coordinated regional innovation. The high people’s courts of Hunan, Hubei, and Jiangxi province established a cooperative working mechanism for trials in city clusters along the middle reaches of the Yangtze River. Under their guidance, intermediate courts in cities including Yueyang, Xianning, and Jiujiang signed cross-regional IP protection agreements with the competent market regulation departments to explore solutions to new challenges in cross-regional, large- scale, and collective IP infringement. The high people’s courts of Sichuan province and Chongqing jointly held the 2022 Sichuan- Chongqing Intellectual Property Protection Seminar to enable the integrated protection of IP rights in both regions. Beijing Intellectual Property Court, the Third Intermediate Court of Tianjin, and the Intermediate Court of Xiong’an New Area signed the Cooperation Framework Agreement on Strengthening Judicial Protection of Intellectual Property, a move that promoted cooperation including talent training, trial collaboration, and experience sharing. The Intellectual Property Court of the Hainan Free Trade Port sent judicial recommendations to the Hainan Administration for Market Regulation and the Intellectual Property Office of Hainan Province, publicly listing 12 individuals involved in 9 criminal cases of IP infringement as serious violators of IP laws. The Intermediate Court of Dalian in Liaoning Province sent judicial recommendations to the local administration for market regulation, publicly disclosing the information of 4 entities involved in intentional IP infringement. The People’s Court of Binhai New Area in Tianjin adopted new regulations to report persons subject to execution in IP cases who failed to fulfill their obligations to departments for market regulation, financial institutions, and industry associations. During Intellectual Property Promotion Week, the Supreme People’s Court held a press conference and planned a series of events to showcase the achievements of Chinese courts in providing judicial protection for IPRs from all angles, perspectives and depths. Courts in regions including Jilin, Gansu, Qinghai, Ningxia, and XPCC released well- planned typical cases and conducted events such as public hearings and public enforcement to encourage the general public to respect and protect IP rights.

• Upheld the Legal Equality in IPRs Protection
  and Promoted International Communication and

Cooperation

Chinese courts made greater efforts to establish China as a preferred venue for international IP litigation, properly tried major IP disputes related to international trade, and created an open, transparent judicial environment, as well as a sound market environment for fair competition, thereby contributing to a greater degree of opening up. In 2022, Chinese courts concluded nearly 9,000 IP cases of first instance involving foreign parties. During the trialing of administrative dispute case between Manolo Blahnik and China National Intellectual Property Administration regarding the invalidity of trademark rights, the Supreme People’s Court equally protected the prior rights of the foreign party and received a letter of appreciation from the Spanish Embassy in China. Courts in Jiangsu newly accepted 527 IP cases involving foreign parties, with a trademark infringement and unfair competition dispute involving a well-known foreign brand concluded in which punitive damages was awarded in accordance with the law, and upheld the foreign rights holder’s claim for compensation of 50 million yuan. In Guangdong, courts resolved a series of standard essential patent disputes involving foreign parties and assisted the parties reach global package settlement via mediation. The People’s Court of Siming in Xiamen, Fujian province, and the International Commercial Mediation Center for BRI established the “Intellectual Property Mediation Room of the Maritime Silk Road Central Legal District”, expanding the channel for mediating IP disputes involving foreign parties jointly.

Committed to building a community with a shared future for humanity, Chinese courts actively engaged in global IP governance under the framework of the WIPO in 2022, deepened judicial IP cooperation with other nations and regions, and pushed for the improvement of international rules and standards on IP rights. The Supreme People’s Court sent judges to participated in the Third China-ASEAN Justice Forum and the Fourth Session for the China-Singapore Supreme Courts Joint Working Group, and co­organized with the European Union the Seminar on Specialized Litigation Procedures for IP Cases. Judges were also sent to attended conferences including the 2022 WIPO Intellectual Property Judges Forum, the WIPO Assemblies Side Event: WIPO ADR for IPOs and Courts, the Fifteenth Session of the Advisory Committee on Enforcement (ACE), as well as the 13th Meeting of the Russia- China Working Group on Cooperation in Protection of IPRs, which was organized by the Ministry of Commerce of China. In addition, the Supreme People’s Court co-organized the Seminar on the Legal Application and Judicial Cooperation in IP Cases between China’s Mainland and Hong Kong jointly with the HKSAR Department of Justice, participated in the drafting of the China chapter of the WIPO International Patent Case Management Judicial Guide, and offered advanced courses through the WIPO Distance Learning Courses in Chinese. Fujian High People’s Court and the WIPO Arbitration and Mediation Center signed the Agreement on Strengthening Communication and Cooperation on Alternative Dispute Resolution for Intellectual Property Rights and formulated the corresponding coordination and working mechanisms.

• Leveraged the Guiding Role of Party Building to
  Build a First-Class Judicial Team

Committed to the political development of the Party, Chinese courts strengthened political loyalty, engaged in impartial and honest judicial practices, and endeavored to build an IP trial team of law and technology-savvy professionals with political integrity, big-picture thinking, and a global outlook.

The 20th National Congress of the Communist Party of China is a meeting of great importance. It takes place at a critical time as the entire Party and the Chinese people of all ethnic groups embark on a new journey to build China into a modern socialist country in all respects and advance toward the Second Centenary Goal. The 20 th National Congress draws a grand blueprint for advancing the great rejuvenation of the Chinese nation on all fronts through Chinese modernization, while making arrangements for improving the legal protection of IP rights. Chinese courts adhered to the absolute leadership of the Party on judicial work concerning IP. Gained a deep understanding of the decisive significance of establishing Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole and establishing the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; Chinese courts endeavored to fully study, understand, and implement the guiding principles from the 20th National Congress. They have relied on Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era to enhance cohesion and forge the judicial soul. Upholding Xi Jinping Thought on the Rule of Law in judicial practices involving IR Chinese courts extensively conducted the “Two Establishes" themed education program to consolidate the progress made in learning the Party’s history and the education and rectification of political and legal teams. Furthermore, Chinese courts continued to promote the high-quality development of judicial work on IP.

Chinese courts strictly adhered to stringent prohibitions such as the “Three Provisions" and the “Ten Prohibitions" for political and legal officials in the new era. In 2022, Chinese courts implemented the “list of prohibited industries" to regulate the post-employment behaviors of the relevant officials, fully implemented the judicial accountability system, standardized the exercise of judicial power; and established the mechanism for the exercise of judicial power and supervision in the field of IP rights, thereby guaranteeing impartial and honest judicial practices. Last yea。Chinese courts continued to intensify education and training in an effort to enhance the political, theoretical, and practical competence of judicial officers, carry forward their fighting spirit and build up their fighting ability. The Supreme People’s Court held a press conference on the new judicial interpretations and judicial policies pertaining to IP rights to facilitate the accurate application of laws by local courts. In addition, the Court mobilized efforts to compile the IP and competition volume of the Application of the Civil Code of the People's Republic of China and compiled summaries of judicial opinions to guide their trial practices. The high people’s courts of Sichuan and Chongqing jointly organized a training course on judicial protection of IP. Under their guidance, the Chengdu Intermediate People’s Court and the Chongqing No. 1 Intermediate People’s Court co-hosted a forum for IP judges. The High People’s Court of Yunnan Province and the

Yunnan Administration for Market Regulation jointly held a training course on administrative enforcement and judicial protection of IP rights to broaden the judicial horizons of IP judges. Focusing on the characteristics of border port cities, the Dandong Intermediate People’s Court of Liaoning Province collaborated with the customs department to enhance trial officials* knowledge of international brand protection.

Conclusion

2023 marks the first year for fully implementing the guiding principles of the 20th National Congress of the Communist Party of China. In IP trials, Chinese courts will continue to follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and fully acted on the guiding principles from the 19th CPC National Congress and the plenary sessions of the 19th Party Central Committee and thoroughly implemented the guiding principles from the Party’s 20th National Congress and the first and second plenary sessions of the 20th Central Committee. Chinese courts will practice Xi Jinping Thought on the Rule of Law across the board, gain a deep understanding of the decisive significance of establishing Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole and establishing the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; enhance their consciousness of the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment with the central Party leadership; stay confident in the path, theory, system, and culture of socialism with Chinese characteristics; and uphold Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole and upheld the Central Committee’s authority and its centralized, unified leadership. Under the absolute leadership of the Party, Chinese courts will adhere resolutely to the path of socialist rule of law with Chinese characteristics and endeavor to ensure that the people perceive fairness and justice in every judicial case. Chinese courts will strive to increase their political awareness, consider the big picture, enhance judicial fairness and efficiency, prioritize self-discipline and team building, and provide impartial judicial services to the people on a consistent basis. This year; Chinese courts will “ strengthen legal protection of intellectual property rights in order to establish a foundational system for all- around innovation”； create an open, fair; just and non-discriminatory environment for the development of science and technology, as well as a world-class business environment that is market-oriented, law­based, and internationalized, thereby laying the groundwork for the construction of a fully modern socialist country.

Major Points of the Draft China Trademark Law Amendments (2023)

by Yan Zhang, Miao Tian, & Austin Chang

China Trademark Law, enacted in 1982, has been amended four times (1993, 2001, 2013, and 2019). Yet there are still issues of bad faith trademark applications, redundant and repeated registrations, improper use and abuse of trademark rights, etc. in trademark practice. On 13 January 2023, less than four years after the 2019 amendment, the China National Intellectual Property Administration (CNIPA) released a new Draft Amendment to the Trademark Law (“Draft”) for public comment.

The Draft expands the current Trademark Law to 10 chapters and 101 articles, among which, there are 23 newly added articles, 6 new articles split from existing articles, 45 articles with substantive updates, and 27 articles basically remain unchanged.

In light of such drastic revisions, this newsletter is prepared with major points that we believe are most noteworthy.

I. Strengthen Measures to Crackdown on Bad Faith Trademarks

1. Clarify specific circumstances of bad faith trademarks

Article 22 of the Draft lists specific circumstances of bad faith marks, including: (1) applying for trademarks in bulk with no intent to use, which disrupts the order of trademark registration; (2) applying for trademarks using fraudulent or other improper means; (3) applying for trademarks that are detrimental to the interest of the country or of the public, or that have other significant unhealthy effects; (4) copying, imitating, or translating other’s well-known mark; (5) pre-emptively applying by the trademark owner’s agent, representative, or interested party; (6) pre-emptively applying for other’s trademarks by unfair means, which damages other’s existing prior rights or interests; and (7) other actions in bad faith.

The Draft clarifies that "applying with no intent to use, or filing applications in bulk," and "applying using fraudulent or other improper means" could be used as absolute grounds for trademark refusals, oppositions, and invalidations. This has broadened the application scope of the Article 44 of Trademark Law 2019, which is mostly applicable only against registered trademarks in invalidation actions.

2. Add more restrictions on signs that can be used and registered as trademarks 

- those in violation of public order or morality (Article 14)
- those contrary to core socialist values, or detrimental to excellent Chinese traditional culture (Article 15)
- both domestic and foreign geographical names known to the public (Article 15)
- those consisting of only generic names, designs, model numbers or technical terms of the goods concerned can neither be registered as trademarks, nor acquired distinctiveness through use (Article 16)

The Trademark Law 2019 stipulates that "geographic names of administrative divisions above the county level or foreign geographic names known to the public shall not be used as trademarks." On this basis, Draft further adds "domestic geographic names known to the public" into the scope of signs that are prohibited from using and registering as trademarks.

In addition, review of trademark distinctiveness is more stringent, that is, generic names, designs, model numbers or technical terms are prohibited from securing registration by obtaining distinctiveness through use.

3. Prohibit repeated registrations

Article 21 of the Draft clarifies that a trademark application shall not be identical to the applicant’s previous applications, registered trademarks, or trademarks that have been revoked, cancelled, or declared invalid within the prior year for the same kind of goods or services. The purpose is to regulate improper acts of trademark squatters such as repeated bad faith applications, and re-application for registration immediately after their squatted trademarks are invalidated or cancelled. And there are some exceptions for right holders who have legitimate need, such as: (1) due to production and operation needs, the trademark application bears minor modifications to the prior trademark which has been in actual use, and the applicant can illustrate the differences; (2) for reasons not attributable to the applicant, the prior registered trademark was not renewed; (3) due to the failure to timely submit trademark use statements, the prior registered trademark that has been in actual use was cancelled; (4) for reasons not attributable to the applicant, the prior registered trademark that has been in actual use was cancelled due to failure to provide evidence of use in response to a non-use cancellation; (5) the prior trademark was declared invalid due to conflicts with prior rights or interests of others, but the prior rights or interests in question no longer exist; (6) there are other legitimate reasons to justify repeated applications for trademark registration.

4. Establish transfer mechanism of bad faith trademarks in invalidation proceeding

Articles 45 to 47 of the Draft stipulate that not only may prior right holder request the CNIPA to declare a registered trademark invalid, but prior right holder may also request to transfer such registered bad faith trademark under his name. This amendment creates a new mechanism favorable to right holders whose marks were pre-emptively registered by squatters. It enables the right holder to obtain earlier registered trademarks while avoiding repeated applications and refusal reviews in line with its trademark enforcement actions. Meanwhile, the Draft sets limitations on transferring registered trademarks by the CNIPA, that is, if there are no other reasons to declare the registered trademark invalid, and the transfer is unlikely to lead to confusion or other adverse effects, the CNIPA shall approve the transfer of the registered trademark. Such limitations, however, lack necessary details for actual implementations. If these particular imitations are to be included in the final version of the amended Trademark Law, we expect the Trademark Implementation Regulations and relevant regulative documents would provide further details and clarifications.

5. Increase penalties against bad faith trademarks

- Increase fines against bad faith registrations (Article 67)
- Civil compensations shall be ordered against bad faith trademark registrations that caused damages to others (Article 83)
- Bad faith trademark registrations that damage national interests, or social public interests, or cause major adverse effects, the Procuratorate shall, in accordance with the law, file a lawsuit in the Court against the bad faith trademark registrations (Article 83)

Articles 67 and 83 of the Draft provide a trinity of administrative, civil, and criminal punishment mechanism to effectively protect the legitimate rights and interests of right holders and crack down on bad faith squatting. A bad faith trademark application can be fined up to RMB250, 000 and any illegal gains shall be confiscated. If losses are caused to a specific entity, such entity may sue in a Court and request monetary compensation for the loss. If a bad faith trademark application damages national interests, social public interests or causes other major adverse effects, the Procuratorate may file a lawsuit.

II. Improve Trademark Examination Proceedings

1. Shorten the timeline for opposition

Article 36 of the Draft shortens the opposition period from three months to two months, which in turn shortens the time needed to obtain a trademark registration.

2. Cancel review of disapproval of trademark registration

Article 39 of the Draft cancels the review of disapproval of trademark registration. Where a trademark is disapproved in opposition, the applicant no longer has the right to appeal such decision with the CNIPA, but it may appeal to the Court. This amendment avoids the same dispute going through three proceedings (substantive examination, opposition, review of disapproval) all before the CNIPA, while still providing remedy for the applicant before the Court.

The Draft does not, however, amend the proceeding where an opposed trademark is approved for registration and where the opponent can file an invalidation with the CNIPA, then still have the remedy to appeal an unfavorable decision to the Court.

How can the two proceedings be harmonized in practice or whether consistency of review is applicable deserves further discussions.

3. Restrict application of the change of circumstances rule in court proceedings

Article 42 of the Draft stipulates that for court proceedings on refusal reviews, registration disapproval reviews, and invalidation actions, “If the status of the relevant trademarks changes after a CNIPA decision is made, it shall not affect the trial of the decision by the Court, except when the principle of fairness is clearly violated.” According to the Draft, change of circumstances shall not be applicable to administrative trademark litigations, except “when the principle of fairness is clearly violated.” However, the circumstances of “when the principle of fairness is clearly violated” remains unclear. Such amendment would greatly impact rights holders’ current practices of obtaining their own trademark registrations by removing prior obstacles via invalidations or cancellations.

III. Strengthen Trademark Use Requirements

1. Strengthen trademark use obligations

- Add use or intent to use requirement when applying new trademarks (Article 5)
- Establish regulations to require trademark owners voluntarily explain trademark use 5 years after registration (Article 61)

Article 5 and 61 of the Draft adds use or intent to use requirement when applying trademarks, and establishes regulations to require trademark owners to voluntarily explain trademark use 5 years after registration. Additionally, a random inspection system for explaining use and provisions for cancelling registered trademarks after random inspections is also added. This amendment will impose higher requirements on the use and maintenance of trademarks by trademark owners. Accordingly, defensive filings may face problems for providing evidence of use 5 years after registration. However, the Draft does not provide for specific review standards and implementing rules. According to the CNIPA statement on the Draft, "a simple and easy-to-implement method such as a use undertaking letter or a use description form is likely to be adopted."

2. Regulate trademark use

For “unauthorized alteration of registered trademarks, name or address or the registrant and other items,” the Trademark Law 2019 only imposes liabilities “to make corrections within a time limit,” otherwise “the registered trademark shall be cancelled.” Article 64 of the Draft adds “a fine up to RMB100, 000” on top of the said provisions and imposes corresponding administrative and criminal liabilities and compensations for those infringing others’ trademark rights.

3. Broaden the applicable circumstances for cancellation

- Cancellation due to causing confusion among relevant public as to quality, source, or origin or other features of the goods by the use of a registered trademark, or seriously harming public interests and cause significant adverse effects by the use and exercise of exclusive rights of a registered trademark (Article 49)
- Cancellation due to untruthful statement of trademark use during random inspections (Article 61)
- Cancellation due to unauthorized alteration in the process of using the registered trademark (Article 64)

The Draft improves the cancellation system by adding more applicable circumstances and specifies that the CNIPA may cancel ex officio a registered trademark that damages public interests. Meanwhile, Article 49 adds a provision that cancellation "shall not damage the legitimate rights and interests of the trademark registrant or disrupt the order of trademark registration" in order to further regulate repeated three-year non-use cancellations or bad faith three-year non-use cancellations.

In addition, the Draft also expands the scope of cancellation ex officio. The CNIPA may cancel a registered trademark ex officio if an improper use of trademark right seriously damages the public interest and causes major adverse effects. If a trademark registrant alters the registered trademark without authorization in the process of using such registered trademark and fails to make correction within a time limit, that registered trademark shall be cancelled. The CNIPA shall conduct random inspections on a trademark registrant’s statement of the use of the trademark, and if necessary, require the trademark registrant to supplement relevant evidence. Where such statement is found to be untrue, the registered trademark shall be cancelled.

4. Clarify the applicable circumstances and the beginning and end of trademark registration “isolation" period

Article 50 of the Draft stipulates that, within one year from the date when a registered trademark is published as canceled or expired, any application for a trademark that is identical or similar to the said mark shall not be approved.

Regarding this one-year “isolation” period, which aims to avoid market confusion, the Draft improves the applicable circumstances by deleting the current provision of applying the isolation after a registered trademark is invalidated, and only retains applicability after a registered trademark is cancelled or expired.

In practice, prior right holders usually file a trademark application while filing an invalidation against a squatted trademark. If the one-year isolation is applicable to such squatted registration, it will lead to prior right holders’ repeatedly filing new trademark applications or incur new trademark disputes. This amendment, in comparison, is closer to the legislative intent in assuring that prior right holder’s trademark application will be approved timely.

IV. Strengthen Trademark Protection

1. Strengthen well-known mark protection

Article 10 of the Draft amends the current expression of “recognition of a well-known mark” into “confirmation of well-known status of a trademark,” which helps to weaken the administrative tint in the well-known mark affirmation. The amendment further specifies that the protection shall follow the principle of case-to-case confirmation, passive protection, and need-basis confirmation, and provides that the scope of protection of a well-known trademark shall be appropriate to the trademark’s distinctive features and reputation.

Meanwhile, Article 18 extends the scope of protection to circumstance that “is likely to cause the relevant public to believe that a trademark is closely connected with a well-known trademark, thus diminishing the distinctive features of that well-known trademark, or disparaging or improperly free-riding on the market reputation of the well-known trademark.”

2. Improve trademark infringement damage calculation method 

The order of calculating trademark infringement damages in the Trademark Law 2019 is actual loss of the right holder, infringer's infringement profits, and reasonable multiples of royalties. In judicial practice, however, said damage calculation order is not the basis for calculating infringement profit when rights holder cannot prove its loss after exhausting his burden of proof. Therefore, Article 77 of the Draft lists right holder’s actual loss or infringer’s infringing profits as the first priority in damages calculation methods, which more streamlined with legal practice. Moreover, the Draft clarifies that damages should include right holder’s reasonable costs.

3. Introduce public interest trademark infringement lawsuit

Article 78 of the Draft introduces public interest trademark infringement lawsuit, where the infringement of trademark rights harms national interests or social public interests, and the trademark owner or interested parties does not file a lawsuit, and the department responsible for trademark enforcement does not deal with the infringement, the Procuratorial may file a lawsuit before the Court.

V. Clarify Administrative Power Boundaries 

1. Introduce a principled provision where trademark rights shall not be abused to damage national interests, social public interests, or the legitimate rights and interests of others

Article 9 of the Draft stipulates that the principle of good faith shall be upheld in the application for trademark registration and in the exercise of trademark rights. Trademark owners shall not abuse trademark rights to the detriment of national interests, public interests, or the legitimate rights and interests of others.

2. Improve descriptive use regulations and add fair use scenarios

Article 62 of the Draft introduces trademark fair use that includes (1) using one’s name and address in good faith; (2) for the purpose of indicating the kind, nature, quality, functions, purposes, weight, quantity, value, geographic origin or other features of the goods, using the geographical name, generic name, graphics, models, technical terms or other symbols relating to such indication of goods; (3) using its registered trademark for the sole purpose of indicating the purpose of use, target or scenario of use of goods, except where such use misleads the public.

3. Introduce malicious lawsuit compensation system

The Trademark Law 2019 sets a regulatory path for malicious lawsuit to be imposed of a sanction by the Court, which provides a legal basis against trademark right abuse. Article 84 of the Draft further stipulates a compensation system for malicious lawsuit. Where a malicious trademark lawsuit causes losses to others, compensation shall be ordered. The amount of compensation shall at least include the reasonable costs paid by the other party in responding to the malicious trademark lawsuit.

Follow us on LinkedIn! Email: trademark@beijingeastip.com Tel: +86 10 8518 9318 | Fax: +86 10 8518 9338 Address: Suite 1601, Tower E2, Oriental Plaza, 1 East Chang An Ave., Dongcheng Dist., Beijing, 100738, P.R. China

CNIPA’s Amended Trademark Examination and Adjudication Guideline on Article 4 of the Chinese Trademark Law regarding bad faith filing without an intent to use the trademark 

by Yan Zhang & Austin Chang

Bad faith trademark filings have been one of the most notorious pains for rights holders in the PRC and worldwide. The amended Chinese Trademark Law 2019 (“Trademark Law 2019”) was adopted with provisions to tackle down on bad faith trademark filings and registrations. Article 4 states that “[a]ny natural person, legal person, or other organizations that needs to acquire the exclusive right to use a trademark in the production and operation activities shall file an application for trademark registration with the Trademark Office. Trademark applications that are filed in bad faith and not filed for the purpose of use shall be refused.” This is the first time the language “purpose of use” is seen in the Chinese Trademark Law.

The legislative intent of Article 4 of the Trademark Law 2019 is to refuse bad faith applications filed without an intent to use from registration, clear sleeping trademark registrations obtained without an intent to use, and to encourage trademark applicants to perform their obligation by using their trademarks. Bad faith applications and trademark hoarding can usually be found in applicants who file in excess of regular business needs and in large quantities, because such filings may indicate that the applications are “not filed for the purpose of use,” which means that the applicant filed the applications either without actual purpose to use the trademark, or without anticipation to use the trademark in the near future, or there is no actual possibility the applicant will use the trademark based on the facts, background information, and evidence submitted. Article 4 specifically target bad faith applications and trademark hoarding because these applications will damage the public interests by depleting public trademark resources and disturbing trademark registration order. Hence, Article 4 does not apply to 1) applicants who file for defensive purpose or 2) applicants who file for use in foreseeable future business. As for trademark filings that only damage a particular entity’s civil rights, other provisions, but Article 4, of the Trademark Law 2019 should be applied.

In determining whether an application constitutes as a bad faith one filed not for the purpose of use, the Trademark Examination and Adjudication Guideline (“Guideline”) specified that in preliminary examination, examiners should pay attention to the facts discovered while examining the application. In oppositions and other adjudication proceedings, examiners should pay attention to the evidence submitted. The Guideline further provided the following six factors to be considered when examining or adjudicating whether an application constitutes as a bad faith application filed not for the purpose of use.

1. Basic information of the applicant that is an entity such as duration of existence, actual capital paid upon registering the entity with the local Administration for Market Regulation, whether there are any unusual signs of the entity’s status, for example, revoked, cancelled, or suspended business license, liquidation in process, etc.

2. Overall status of the applicant’s trademark applications including the accumulative numbers of applications filed and the classes of designated goods and services, the time span among the applications filed, and the trademark applications filed and the classes of designated goods and services in a short time.

3. The composition of the applied trademark, for example, whether the applied trademark is identical or similar to other famous or highly distinctive trademark, whether the applied trademark includes public resources such as administrative district names, names of mountains, rivers, scenic spots, industry terms, etc., whether it contains the names of well-known people, corporate names, business terms, etc., whether the applied trademark includes other famous individual’s name, trade name, e-commerce name, well-known advertising slogans, works of art, designs, etc.

4. The applicant’s behaviors during trademark registration proceedings and after issuance of trademark registration certificate, for example, selling or assigning the trademark to a third-party without evidence proving it had intent to use the trademark before selling or assigning the trademark, actively offering the trademark for sale to others or in public, threatening others to cooperate in business, or demanding high fees to assign the trademark, high license fee, high compensation fee for infringement, or high settlement for litigation.

5. Evidence submitted in opposition and other adjudication proceedings such as the applicant lacked actual intent to use the trademark upon filing, or the applicant did not actually use the trademark after issuance of the trademark certificate and no preparatory work was done towards using the trademark, and the applicant failed to prove its intent to use or explanations for not using the trademark, or the applicant had used the trademark in dispute in an infringement lawsuit to claim for unjustified gains.

6. Other factors to be considered in opposition and other adjudication proceedings include but not limited to 1) effective administrative rulings or judgements or judicial decisions that the applicant was found to have engaged in bad faith trademark filings or infringed upon other’s trademark right, 2) the applicant has been listed in the list of serious violations of law and dishonesty by the National Enterprise Credit Information Publicity System, 3) the cumulative number of trademark applications and the classes of designated goods and services owned by individuals, legal persons, or other organizations that have a specific relationship with the applicant, and 4) actual trademark transactions, offers, and invitations for offers of natural persons, legal persons, or other organizations that have a specific relationship with the applicant.

The Guideline also listed 10 circumstances that would constitute as trademark applications “filed in bad faith and not filed for the purpose of use” as stipulated in Article 4 of the Trademark Law 2019, unless the applicant or other interested party proves otherwise. Note, point 3 and 9 should be primarily applied in oppositions and other adjudications, while the rests can be both applied in examinations, oppositions, and other adjudications.

1. The number of trademark registration applications is large, which obviously exceeds the requirements of normal business activities, lacks real intention to use, and disrupts the order of trademark registration.

2. A large number of copies, imitations, or plagiarisms of multiple entity’s prior trademarks with a certain degree of fame or strong distinctiveness, disrupting the order of trademark registration.

3. Repeated applications for registration of a specific trademark with a certain degree of fame or strong distinctiveness owned by the same entity, disrupting the order of trademark registration. If such repeated applications for registration fall under the circumstances of bad faith registrations regulated by other provisions of the Chinese Trademark Law, these other provisions shall apply.

4. A large number of applications that are identical to others’ business names, abbreviations of business names, e-commerce names, domain names, product names, packaging, decorations that have a certain influence, and identical or similar marks to other well-known and identifying slogans, designs, and other commercial logos.

5. A large number of applications that are identical or similar to public cultural resources such as the name of a well-known person, a well-known work or character name, and a well-known artwork of others that have gained distinctiveness.

6. A large number of applications that are identical or similar to the names of administrative districts, mountains and rivers, scenic spots, and buildings.

7. A large number of applications that are generic names, industry terms, or indicators that directly indicate the quality, main raw materials, functions, uses, weight, and quantity of the goods or services, etc., which lack distinctiveness.

8. The applicant submits a large number of applications, and assigns a large number of trademarks, and the assignees are scattered, which disrupts the order of trademark registration.

9. The applicant has sold in large quantities for the purpose of seeking unjustified interests, demanding commercial cooperation from the prior user of the trademark or others, high assignment fees, license fees, or infringement compensation, etc.

10. Other circumstances that can be deemed as bad faith in applying for trademark registration.

Although the Guideline listed the 10 circumstances for the examiners to consider when determining whether a trademark application “filed in bad faith and not filed for the purpose of use” as stipulated in Article 4 of the Trademark Law 2019, these factors are not limited to bad faith trademark applications filed by the applicant. It also applies to natural persons, legal persons, or other organizations that have a specific relationship or connections with the applicant or have colluded with the applicant to filing the applications. Finally, simply assigning a registered trademark to a third party does not affect the determination of whether an application was filed in violation of Article 4 of the Trademark Law 2019..

Follow us on LinkedIn! Email: trademark@beijingeastip.com Tel: +86 10 8518 9318 | Fax: +86 10 8518 9338 Address: Suite 1601, Tower E2, Oriental Plaza, 1 East Chang An Ave., Dongcheng Dist., Beijing, 100738, P.R. China

Protection of Chinese Equivalents of Foreign Trademarks

by Yan Zhang & Austin Chang

When an oversea brand enters China market, selecting a Chinese equivalent of the oversea brand is crucial because native Chinese pronounce and remember the Chinese language much easier than any foreign language. This is precisely why nearly all famous international brands have and use its Chinese equivalent names in China. For example, the well-known tech company APPLE has its Chinese name of “PING GUO in Chinese (苹果)” and MICROSOFT uses “WEI RUAN in Chinese (微软).” Both APPLE and MICROSOFT used literal translation as their Chinese equivalent. Literal translation is one of the three ways in selecting a Chinese equivalent. The famous hotel brand HILTON uses “XI ER DUN in Chinese (希尔顿)” and the fashion brand ARMANI uses “A MA NI in Chinese (阿玛尼).” Hilton and Aermani used transliteration, which is another popular way of creating a Chinese equivalent that could be highly distinctive and have a similar pronunciation to its foreign counterpart. Literal translation or transliteration, it is critical that the Chinese equivalent has no negative meanings.

A combination of literal translation and transliteration is also used in creating Chinese equivalents. For example, STARBUCKS uses “XING BA KE in Chinese (星巴克).” The first character “XING in Chinese (星)” is the literal translation of “STAR,” and the last two characters “BA KE in Chinese (巴克)” are the transliteration of “BUCK.” Another great example is “LOCK & LOCK,” a Korean household brand. Its Chinese name sounds like “Le kou Le kou” and means “happily locked or buttoned.”

As Chinese equivalents could involve various Chinese translations or non-exclusive transliterations, in China trademark prosecution, a foreign language trademark will not automatically be deemed similar to its Chinese equivalent. So registering the foreign language trademark alone may not be sufficient to establish priority over all Chinese translations, nor prevent others from registering various transliterations.

More importantly, China adopts the first-to-file trademark system. If a Chinese equivalent of a foreign language trademark is not promptly selected, it is likely that distributors, consumers, or media may “self-select” a Chinese name for that foreign language trademark and even have it registered to block that oversea brand owners from using its Chinese marks in China. So it is vital for an oversea brand owner to create and timely protect its Chinese equivalent.

1. Factors considered in prosecution and litigation

Determining whether or not a foreign language trademark is similar to a prior Chinese language trademark, the general understanding of Chinese relevant public shall be considered, and the following factors should be taken into account according to the Beijing High Court Guidelines for the Trial of Trademark Right Granting and Verification Cases: (i) the ability of Chinese consumers to recognize the foreign language trademark; (ii) the relevance or correspondence in meaning and pronunciation between the foreign language trademark and the Chinese language trademark; (iii) the distinctiveness, popularity and ways of use of the cited trademark; and (iv) the actual use of the trademark in dispute. These factors should be comprehensively considered in different proceedings and evaluated on a case-by-case basis.

For the factor “the ability of Chinese consumers to recognize the foreign language trademark,” two elements should be considered, the type of foreign language and the frequency of use of foreign words.

If Chinese consumers cannot recognize a foreign word, it would be unnecessary to discuss similarity between the foreign language trademark and Chinese language trademark. Like in the “Little Black Dress” case, the Court held that the refused mark “Little Black Dress in Chinese” and the cited mark “LA PETITE ROBE NOIRE” do not constitute similar marks, because most Chinese consumers cannot read French, nor do they know the Chinese meaning of the cited French trademark. They would only recognize the cited French trademark as a combination of Latin alphabets and not associate it with a Chinese language trademark.

For the factor “relevance or correspondence between the foreign language trademark and the Chinese language trademark,” as one foreign word can be translated or transliterated into different Chinese characters, and vice versa, when identifying similarity between a foreign language trademark and a Chinese language trademark, correspondence can be considered from either of the two perspectives – translation from Chinese into English and vice versa.

Taking the “FOREVERMARK” case for example, “FOREVERMARK” can be translated into “永恒印记, ” while “永恒印记” can also be translated into “FOREVER MARK.” As “FOREVER” and “MARK” are both frequently used English words, Chinese consumers can readily understand the Chinese meaning of the trademark and will likely associate the trademark with its corresponding Chinese translation.

Based on current practices in China, the substantial examination of a foreign language trademark at the Trademark Office is straightforward. The examiners mainly focus on the literal meaning of the trademark, and refer to the online dictionaries, such as Kingsoft dictionary for direct translation. Hence, the transliterations of a trademark or phonetically similar trademarks will not be cited by the examiners to block the new application of foreign language trademark.

While in refusal appeal procedure, the examiners apply a broader scope in examining the similarity between a foreign language trademark and a Chinese language trademark, not merely relying on the dictionary meanings. Their broader scope of examination focuses on the two aspects: the general understandings of Chinese consumers and the correspondence in meanings between the foreign language trademark and the Chinese language trademark. The use and reputation of refused marks would also be deemed as a supporting factor but cannot carry much weight.

In reviewing opposition and invalidation cases, however, the Trademark Office and courts apply a more comprehensive analysis using “likelihood of confusion” as the judging standard. In addition to comparison of trademarks per se, other influential factors may be considered when assessing “likelihood of confusion,” such as the cited trademark’s distinctiveness, the use and reputation of the cited trademarks, the relatedness of goods and services, and the applicant’s bad faith.

Chinese courts also apply the “likelihood of confusion” analysis in trademark infringement cases involving Chinese equivalents, requiring only a “stable,” as opposed to “sole” corresponding relationship be established between a foreign language trademark and its Chinese equivalent. However, to achieve the “stable” status, brand owner must provide substantial evidence to prove that its foreign language trademark and its Chinese equivalent have been widely used over a long period of time, and the corresponding relationship has been established and known to the relevant public.

2. Typical cases regarding Chinese equivalents of foreign trademarks

The most common mistake in business practice is that the brand owner does not have an “official” Chinese equivalent for its foreign language trademark, nor does it attempt to use and promote the trademark in Chinese. When a brand owner does not have a Chinese equivalent for its foreign language trademark, its Chinese distributors, public, or media will often self-create and use a Chinese version to refer to the brand owner and its products. This is considered as “passive use” in contrast to the “active use” by the brand owner. In practice, when an issue of determining whether a use is an active one or a passive one is presented to Chinese courts (usually in cancellation actions), the courts will examine whether the asserted “passive use” in the case at hand is used against the brand owner’s will, and whether a corresponding relationship between the foreign language trademark and its Chinese equivalent has been established. Please see below an example case.

In the FREDDIE MAC case, the China Supreme Court held that “FANG DI MEI in Chinese,” as one of the Chinese translations of “FREDDIE MAC,” has been widely used by media reports to refer to Freddie Mac, and “FANG DI MEI in Chinese” has established a corresponding relationship with “FREDDIE MAC” in the field of financial services, although there exists several other translations, like FANG DAI MEI (房贷美) and FU LEI DE MA KE (弗雷迪马克). The FREDDIE MAC case highlights that the existence of several Chinese translations does not affect the establishment of corresponding relationship between the major Chinese translation and the foreign language trademark.

An equally important issue is that the corresponding relationship shall be identified in connection with the specific goods or services used. Taking the FACEBOOK case for example, the Beijing High Court held that, based on the third party evidence including Chinese media reports, and general understanding of Chinese relevant public, the “LIAN PU in Chinese” mark was the corresponding translation of the FACEBOOK mark when used on networking services. Although “LIAN PU in Chinese” has its fixed meaning in Chinese, which means facial makeup in operas, when used in connection with networking services, it refers to Facebook, rather than other entities.

The FREDDIE MAC case and the FACEBOOK case are typical passive use cases where the courts protected the Chinese equivalent of the foreign language trademark. For the passive use, the worse scenario happens when the Chinese distributor created the Chinese name for the oversee brand and registered the Chinese trademark under its own name. Upon the termination of business cooperation, the Chinese distributor may start supplying identical products using the Chinese trademark, which may inevitably mislead consumers about the source of products.

As in the EVOLON case, a Nanjing Company, which was a distributor of Freudenberg, registered the Chinese mark “YI WO LONG in Chinese (依沃珑)” and used it in the sales of Freudenberg’s nonwovens products with the English mark “EVOLON.” The Nanjing Company insisted that the Chinese mark was created by themselves, and it was their efforts that contributed to the reputation of the Chinese mark. The China Supreme Court affirmed the corresponding relationship between the Chinese mark “YI WO LONG in Chinese” and the cited English mark “EVOLON,” and further held that the Nanjing Company used the Chinese mark alone or together with the English mark to promote Freudenberg’s products, which inevitably associated the Chinese mark with Freudenberg and its products.

Despite more and more positive outcomes from Chinese courts, there are cases where Chinese equivalents of foreign language trademarks were not protected because brand owners expressly denied the corresponding Chinese equivalents. The VIAGRA case and SONY ERICSSON case are typical examples. In the VIAGRA case, Pfizer adopted a Chinese name “WAN AI KE in Chinese” for its blue pills, Chinese public and media, however, had already created a Chinese name “WEI GE in Chinese” for VIAGRA. Pfizer opposed a third party’s filing for the “WEI GE in Chinese” mark but failed. The court found that, Pfizer had never promoted their products under the name “WEI GE in Chinese,” and on the contrary, claimed that the Chinese equivalent of VIAGRA was “WAN AI KE in Chinese.”  In the SONY ERICSSON case, Sony Ericsson used “SUO NI AI LI XIN in Chinese” as the official translation of its mobile phone brand, but Chinese public and media called it “SUO AI in Chinese” for short. The court held that, Sony Ericsson had no evidence proving their use of “SUO AI in Chinese” and even denied that “SUO AI in Chinese” was the abbreviation for “SUO NI AI LI XIN in Chinese.”

One final important point, the evidence proving the corresponding relationship shall be prior to the application date of the disputed mark or prior to the first use date of the accused mark.

In the New Balance case, New Balance registered its English trademark “New Balance,” but neglected to register the Chinese version. A Chinese individual, Mr. Zhou, registered the trademarks “BAI LUN in Chinese” and “XIN BAI LUN in Chinese” for footwear and later brought an infringement action against New Balance’s use of “XIN BAI LUN in Chinese” mark. The first instance court affirmed trademark infringement and ordered New Balance to pay damages for around USD 15 million. This astonishing high damage was significantly reduced to around USD 770,000 by the second instance court, that said, the finding of trademark infringement is an important lesson to oversea brand owners doing business in China to have a Chinese equivalent trademark.

On the other hand, New Balance attempted to invalidate Mr. Zhou’s registered trademark “XIN BAI LUN in Chinese,” claiming “XIN BAI LUN in Chinese” is a Chinese equivalent of “NEW BALANCE,” but the Beijing High Court recently made the final decision denying New Balance’s appeal, because New Balance used “XIN BAI LUN in Chinese” as the Chinese equivalent of NEW BALANCE later than the application date of Mr. Zhou’s “BAI LUN in Chinese” trademark. And no sufficient evidence was provided to prove the corresponding relationship between “XIN BAI LUN in Chinese” and “NEW BALANCE” prior to the application date of the disputed mark.

Similarly, a famous Australian wine brand Penfolds got involved in a trademark dispute with a Chinese squatter Mr. Li, who registered the mark “BEN FU in Chinese,” which is the Chinese equivalent of PENFOLDS. This registration blocked the Australian brand owner using the “BEN FU in Chinese” mark in China, despite doing business in China for over twenty-five years. In the PENFOLDS case, the Beijing High Court held that the submitted evidence was sufficient to prove the corresponding relationship established between the disputed mark “BEN FU in Chinese” and the cited English mark “Penfolds” prior to the application date of the disputed mark.

Fortunately for Penfolds, before successfully securing the registration of its own Chinese mark “BEN FU in Chinese,” it landed a victory in an infringement action against a Chinese brewing company and its distributor. The local court affirmed the well-known status of “BEN FU in Chinese” as an unregistered mark, based on its corresponding relationship with the English mark “Penfolds,” and held the defendants’ use of the accused “BEN FU in Chinese” mark constitutes trademark infringement. In this case, “BEN FU in Chinese” was protected as unregistered well-known mark based on the evidence prior to the first use date of the accused mark.

The key issue in the New Balance case and the Penfolds case is the cut-off time for collecting evidence. On top of that, sufficiency of evidence is crucial in swinging the outcome of a case.

3. Takeaways

1) It is highly recommended that oversea brand owners create their own Chinese equivalents before entering the China market. If not, Chinese consumers or media will create Chinese versions in different ways and squatters may even register them.

2) Oversea brand owners should not only register the foreign language trademark, but also file for the Chinese equivalent as soon as possible. Those Chinese equivalents created by the media and public shall be considered and registered as trademark as well, at least for defense purposes.

3) In addition to clearance search, regularly monitoring similar Chinese translations in key classes will help in discovering questionable marks, which allows brand owners to address squatting or counterfeiting problems in a timely manner.

4) Better evidence management is crucial because sufficiency of evidence, especially evidence related to the use and fame of the foreign language trademark as well as the corresponding relationship between the foreign language trademark and its Chinese equivalent, is always a core factor affecting chances of success.

Follow us on LinkedIn! Email: trademark@beijingeastip.com Tel: +86 10 8518 9318 | Fax: +86 10 8518 9338 Address: Suite 1601, Tower E2, Oriental Plaza, 1 East Chang An Ave., Dongcheng Dist., Beijing, 100738, P.R. China

Tackling Bad Faith Trademark Applications or Registrations in China – Part IV

by Yan Zhang, Miao Tian & Austin Chang

In the last part of this series, we will share cases and our suggestions on two issues, one is the impact on bad faith assessment in the event of later trademark assignment, the other is the necessity to assess bad faith if the right holder's interests have already been protected by applying other clauses of the Trademark Law.

1. Will a trademark assignment change the bad faith nature of a squatted mark?

An individual “A” applied for “” in early 2011 on computers, computer programs, handheld phones, etc. in class 9, secured trademark registration in January 2012, and assigned the mark to another individual “B” in February 2014.

Instagram filed an invalidation action against the trademark in April 2014 but the mark was sustained.  Disagreed with the decision, Instagram appealed to the Beijing IP Court in June 2016 and obtained a favorable judgment, which was later upheld by the Beijing High Court in March 2017 against the CNIPA’s second instance appeal.

In this case, we argued that the application date of the disputed trademark should be used as the time point for judging the bad faith because it is the subjective attitude of the original applicant that matters.  The subsequent transfer of the disputed trademark and whether the assignee is in good faith cannot clean the slate even if a valid contract has been signed and reasonable consideration paid.  To prove A’s bad faith, we submitted the trademark application list of A to show he filed for nearly 30 famous trademarks such as "Google," "Twitter," "SQUREUP," "PINTEREST," "FOURSQUARE," "FREEMONEE," "BLEKKO," "QUORA"; the declarations condemning A for his bad faith squatter issued by Google, Twitter and other leading Internet companies; and overseas judgments against A for his squatting, etc.

With detailed arguments and convincing evidence, we managed to persuade the courts to find that:

The legislative intent of Article 44. 1 of the Trademark Law is to maintain a good trademark registration and administration order by means of holding the principle of public order and good customs.  When examining and determining whether the disputed trademark is registered by other improper means, it is necessary to consider whether it is a means, other than deception, that disrupts the order of trademark registration, harms public interests, occupies public resources improperly, or seeks improper benefits in other ways.

In this case, in addition to applying for the disputed trademark, the relevant right holders of the disputed trademark also applied for trademarks that are identical or similar to others’ famous brands in multiple classes.  These said trademarks show obvious intention to copy and imitate others’ trademarks with certain fame, disrupt the normal order of trademark registration administration, impair the market order of fair competition, and violate the principle of public order and good customs.  In accordance with the legislative intent of the Trademark Law to prohibit using deceptive or other improper means to obtain trademark registration, the relevant right holders’ registering the disputed trademark in bad faith should be prohibited. Therefore, the disputed trademark shall be revoked.

In this case, we also strengthened our arguments by proving that the current owner B acquired the disputed mark from A with full awareness of A’s bad faith.

Note, in practice, even if the assignee who may be the proprietor that had been squatted acquired the bad faith mark with good faith, the malice or illegality behind the act of applying for a squatted mark will not be eliminated by the assignee's “bona fide” good faith.

In the last several years, with the SPC’s judgments, regulations or guidance, it now appears to be an acknowledged conclusion that ownership change will not affect the application of Article 4 and Article 44.1 of the Trademark Law.

For example, Article 7.4 of Beijing High People’s Court Guidelines for the Trial of Trademark Right Granting and Verification Cases stipulates that, if a disputed trademark violates the relevant provisions of the Trademark Law, and the only ground that the owner claimed for the trademark to remain valid is that the owner has no fault when the trademark is transferred, then such claim shall not be supported. The Action Plan for Combatting Bad Faith Trademark Registration has similar provisions as well.

Also, in the newly published Draft for Comments of the Trademark Review and Adjudication Standard, Chapter 2 Examination on the bad faith application lacking the true intention of use contains a rule stating that “trademark assignment shall not affect the determination of whether the trademark applicant has violated this article 4.”

In light of the above, on one hand the bad faith squatter cannot escape from being invalidated by means of assigning the mark to a less-malicious affiliate. On the other hand, however, if this rule is applied strictly, any trademarks assigned to their rightful owners could be vulnerable to invalidation due to their original applicant’s lack of intent to use at the time of filing.

Given the uncertainty, before purchasing any squatted marks, or where any such marks have already been purchased, brand owners should consider the following steps:

1) Conduct due diligence against the assignor – if assignor has filed for a huge number of trademarks, and the mark being assigned has never been used, the risks that the CNIPA would reject such an assignment are relatively high.

2) File back-up trademark applications – given the risk of rejection for the assignment, brand owners should file new applications of the squatted mark as a back-up plan, rather than relying entirely on the assignment.

3) Clarify consequences of rejection in assignment agreements – it should be clarified in the assignment agreement between the squatter and the proprietor that if the CNIPA rejects the assignment application, the squatter will agree to voluntarily revoke or cancel the mark instead of assignment.

4) Seek possible cooperation from squatter – the squatter should guarantee that it will cooperate with any office actions initiated by the CNIPA, including providing the evidence of use (if any) and responding to office actions.

2. Is it necessary to assess bad faith when another substantive article of the Trademark Law has already been supported?

A Chongqing company “K” applied in 2009 and registered in 2015 a US company's core mark (Disputed Mark) for cosmetics, soaps, etc. in class 3. The US company “P” filed an invalidation in 2016 and received a favorable decision from the CNIPA. The company K disagreed with the decision and appealed to the Beijing IP Court, which dismissed the company K’s claims by affirming Article 32 and Article 44.1. The court found that:

Regarding whether the Disputed Mark constituted a pre-emptive registration by improper means of other’s mark already in use with high fame, the evidence submitted by the company P can prove that before the application date of the Disputed Mark, the licensee of the company P had sold cleansing milk, lotion, and other products branded the Disputed Mark in mainland China and the trademark had obtained certain fame on cosmetics through use. Considering that the Disputed Mark bears certain degree of distinctiveness when used on cosmetics, and that it is hardly a coincidence for the Disputed Mark and the Disputed Mark to be highly similar in mark composition and meaning, the company K is subjectively malicious in applying for the Disputed Mark. The goods designated under the Disputed Mark are the same or similar to cosmetics on which the company P had first used its mark and obtained high fame, so the registration of the Disputed Mark has violated Article 32 of the Trademark Law.

Regarding whether the Disputed Mark constituted a violation of Article 44.1, in addition to the Disputed Mark which is basically the same as the company P’s mark in use with certain influence, The company K has successively applied for more than 60 trademarks, including some copies that are the same or similar to famous brands like “Geely,” “Chrysler,” “U Key,” etc. The company K failed to give a reasonable explanation for its applications and failed to submit evidence to prove its true intention to use these marks. It can be concluded that The company K not only has obvious subjective malice of copying others famous trademarks, but also has an objective of seeking illegitimate profits by hoarding trademarks. Such behaviors will cause confusion and misunderstanding among the relevant public, disrupt the normal order of trademark administration and market competition, and impair the public interests of the society. Therefore, the registration of the Disputed Mark violated the Article 44.1 of the Trademark Law.

In this exemplary case, on top of the Article 32, the CNIPA and the court further applied Article 44.1 to invalidate the bad faith squatted mark. However, we have also received and studied many decisions and judgments where the examiners refused to further review and comment on Article 44.1 when they find either of Article 30 (similar marks on similar goods/services), Article 32 (prior rights), Article 15 (pre-emptive filings by agent or representative), etc. applies in a case.

Not only in the decisions, but also from the rules and regulations we can see this issue still appear to be disputable. For example, Article 17.5 of Beijing High People’s Court Guidelines for the Trial of Trademark Right Granting and Verification Cases sets some restrictions on application of the bad faith clause on “other improper means,” stipulating that when deciding an opposition appeal or an invalidation case, if the request of the petitioner can be supported by applying other clauses of the Trademark Law according to the documented evidence, Article 44.1 of the Trademark Law shall not apply.

In the Draft for Comments of the Trademark Review and Adjudication Standard, Chapter 16 Examination on the trademark registrations obtained by deceptive or other unfair means also contains a restriction, stating that “where other clauses of the Trademark Law could be applied to refuse or invalidate a disputed trademark based on the documented evidence, Article 44.1 of the Trademark Law shall not apply, with the exception that the bad faith is obvious.” From this newly published Draft, we can see that the government’s interests in fighting against bad faith in China is becoming increasingly strong. We look forward to a further improved trademark administration and mark competition environment.

In light of the regulations and practice that we shared, bad faith could not only make a case on its own, but also “outshine” the likelihood that the CNIPA and the courts would apply the non-bad faith related articles in the Trademark Law against squatted marks, such as the cases we have shared in earlier parts of this series. In summary, we suggest brand owners to consider spending the necessary resources to dig down into a squatter’s bad faith and to endeavor for a favorable outcome.

This is the end of this series. Follow us and stay tuned!

Follow us on LinkedIn! Email: trademark@beijingeastip.com Tel: +86 10 8518 9318 | Fax: +86 10 8518 9338 Address: Suite 1601, Tower E2, Oriental Plaza, 1 East Chang An Ave., Dongcheng Dist., Beijing, 100738, P.R. China

Tackling Bad Faith Trademark Applications or Registrations in China – Part III

by Yan Zhang, Miao Tian & Austin Chang

Previously, we shared our insights on the application of bad faith clause with exemplary cases. This time, we are going to share cases to show how we identify the bad faith and how we present the evidence to convince the CNIPA and the courts to achieve favorable outcomes!

1. Devil lies in the details – everything submitted when filing trademark applications counts

A Chinese individual filed an application for “” with App. No. 10558333 on March 2, 2012, designating on “doors of metal; metal door device; door casings of metal; insect screens of metal; metal furniture parts; ironmongery; locks of metal, other than electric; safes; props of metal” in class 6. This registrant only owned this particular disputed mark.

Facebook filed both an opposition and an invalidation against this mark successively, but neither proceedings could remove the disputed mark from the registry successfully. In these proceedings, the examiners found that, for relative grounds, hardware was distant from networking, and for absolute grounds, no harm was placed against public interest or order.

Unsuccessful before the CNIPA, Facebook appealed to the Beijing Intellectual Property Court. We focused our claim on the absolute grounds, that was, to further demonstrate the registrant’s bad faith. In addition to the evidence already collected and submitted in the invalidation, we managed to find a valuable piece of evidence which was only available at court proceeding – the application materials of the disputed mark on file at the Trademark Office. As it turned out, all efforts have been paid off. In its judgment, the court reasoned that, as required by the law, trademark applications should be filed in the name of a responsible person running an individual business or a lease holding rural household, or someone with the permission to engage in business operation. Here, the registrant submitted a copy of a business license which showed him as the operator of a solely owned business engaging in wholesale of doors and construction materials. However, according to the information revealed in the National Enterprise Credit Information Publicity System, this solely owned business was run by another individual that provides housekeeping services. During the court hearing, the examiner from the CNIPA also admitted that when examining trademark applications, they only conduct formality check over the materials but will not verify the authenticity of the content therein. Given the discrepancies, the copy of the business license submitted when filing the application for the disputed mark was obviously forged.

The court further reasoned that the mark “FACEBOOK” bore high distinctiveness as it is neither Chinese characters nor an existed English word, and the mark owner Facebook was the operator of the famous social networking site “FACEBOOK.” Considering the facts that the registrant provided forged materials when applying for trademark registration, the disputed mark was identical with “FACEBOOK”, and the registrant refused to appear in court to state reasons or make explanations despite the court’s subpoenas, the court found the forged business license hardly a coincidence. The court concluded that the registrant used deceptive or other unfair means in obtaining the disputed mark’s registration. Such trademark application was filed with obvious intention of infringing on other’s prior rights and disturbing trademark registration order. If left uncurbed, such behavior will inevitably hinder the normal operation of honest operators and impair the market order of fair competition. Therefore, the disputed mark should be invalidated.

Although procedurally, the registrant has the right to file a second instance appeal against the judgment, he did not appeal, and the judgment became effective. The CNIPA later re-made an invalidation decision based on the Beijing Intellectual Property Court’s judgment to invalidate the disputed mark for violating Article 44.1 of the Chinese Trademark Law 2013.

2. Massive filings without justified reasons can never be tolerated

A Chinese investment management company filed an application for “” with App. No. 18919877 on January 18, 2016, designating on “radio broadcasting; message sending; mobile phone communication; computer terminal communication; computer aided transmission of messages and images; providing user access to global computer network; voice mail services; transmission of digital files; videoconferencing services; video-on-demand transmission” in class 38.

Facebook filed an opposition against this mark, arguing for similarity with its mark “FACEBOOK” in class 38 and for the applicant’s bad faith. The CNIPA, however, granted the differences between the marks and the lack of malicious evidence.

Facebook did not stop at this unfavorable outcome but, taking our advice, further brought the mark to the invalidation stage. Based on the evidence gathered during the opposition, our strategy was to focus on the registrant’s bad faith in achieving a favorable invalidation outcome. We further conducted deeper investigations of the registrant aiming to collect and present as much evidence to demonstrate its bad faith as possible.

Like the opposition proceeding, the registrant did not respond in the invalidation. Upon reviewing our arguments and evidence, the CNIPA found that:

Since 2015, the registrant has applied for more than 280 trademarks such as “UBER in Chinese,” “UBERBEATS,” “APPLEMOBILE,” “APPLELIFE,” “BMWAPPLE,” etc., for computers, automobiles, coffee, currency exchange, online banking, real estate management, electronic information transmission, education and other goods and services in Classes 9, 12, 30, 35, 36, 38, 41, etc. Some trademarks have been refused from registration or been invalidated for constituting similar to others’ prior marks.

The registrant did not respond to the invalidation arguments, did not submit evidence of the use of the disputed trademark, and did not give a reasonable explanation of its intention for its massive trademark applications or of its source for the trademark designs.

As an investment management company solely owned by a natural person, the registrant’s behavior of filing massive applications could hardly be considered legitimate as it showed obvious subjective intention of duplicating or imitating others’ prior marks, which has exceeded the normal needs for business operation, and lacks genuine intention to use.

Considering the above facts comprehensively and in the absence of evidence to the contrary, the CNIPA concluded that the registrant’s massive applications has disrupted the normal order of trademark administration and was detrimental to a fair and competitive market order. The disputed mark’s registration was invalidated based on Article 44.1.

3. Comments

Both exemplary cases are related to Facebook, and admittedly, the distinctiveness of the mark FACEBOOK and the fame of Facebook have their contributions to the final favorable outcome.  However, Facebook’s persistence in pursuing the cases to next levels and our persistence in exhaust all possible evidence to show the other party’s bad faith are also of vital importance.

Regarding the first case against the individual who filed “facebook,” it was not particularly surprising, though disappointing, that both opposition and invalidation decisions were not favorable. After all, the adversary had only one mark in total and the class 6 goods carried weak relatedness with Facebook’s core business. So, at the court proceeding, our arguments focused on presenting evidence laid on the registrant’s qualification for filing trademark applications.

In China, any natural person who applies for trademarks should be a responsible person running an individual business or a lease holding rural household, or someone with the permission to engage in business operation. So, when filing new applications in the name of an individual, a copy of the applicant’s ID card and a copy of business license of their solely owned business or of the lease holding contract should be submitted.

According to our experience in dealing with trademark applications filed by individuals, often that some malicious applicants would submit forged credentials to obtain trademark registration by fraud. In the first case, after the court appeal case was officially docketed, we were well-grounded to request formally an official copy of the disputed mark’s application materials on file with the Trademark Office. Upon receiving the document, it was obvious that the individual filed the trademark application with forged document and the disputed mark was subsequently invalidated based on Article 44.1.

Devil lies in the details. When dealing with bad faith filings, every detail in the life of a trademark application counts and should be closely examined - the second case proves this strategy.

In the invalidation decision against “FBMENTIONS,” the CNIPA referred to the number of the registrant’s filings and some of its marks similar to famous brands, which constituted the basis for finding the bad faith of the investment management company. But when presenting the case to the CNIPA, other than above arguments, we discovered and sorted out the following facts so as to make a convincing argument of bad faith.

Background of the registrant: the duration of its existence, the actual payment of its registered capital, its business scope and the specific situation of the industry, the operation status and whether there are abnormal situations like administrative orders and fines, suspension of business, etc.

In this case, the registrant is an investment management company while the disputed mark is in class 38 for telecommunication services. The two industries both bear strong industry attributes and have strict qualification requirements, but they are not naturally related, which may indicate the low likelihood of genuine intention to use the mark because companies would not often apply for trademarks for goods or services that are too unrelated to its core business, unless they are expanding to other industries.

Circumstances of the registrant’s marks: the accumulative number of trademark applications, the designated classes of goods and services, the time span of the registrant’s submission of trademark applications, the applications similar to others’ marks with distinctiveness and fame, the repeated trademark applications, the marks on sale at public transaction platforms, etc.

In this case, the registrant applied more than 200 trademarks designated on goods and services with high access threshold, like automobiles in class 12, financial services in class 36, telecommunication services in class 38, education services in class 41, medical services in class 44. More importantly, many of the registrant’s marks are imitating the marks owned by worldwide giants such as Facebook, Apple, BMW, Canon, Uber, etc. These applications are inferences that the registrant has bad faith.

Related entities of the registrant: companies shared the same legal representative or senior executives, entities involved in trademark assignment with the registrant, entities associated with the registrant as revealed and proved in other cases, etc.

In some cases, the number of the adversary’s filings is not large; but when we expand the firing range and take a deeper look at its affiliates, we would find that the related entities in combination are large enough to turn the case around.

In this case, we found an affiliate with unusual connection. As shown by the trademark filing records, the registrant filed serial marks starting with “FB,” like “FBATWORK,” “FBSHOPPIN,” “FBWALLET,” etc.; and searching in the trademark database, we noticed that there was an individual who also filed similar series marks starting with “FB.” We conducted further searches using both names and found a special relationship between these two entities – the individual is recorded as the inventor of the registrant’s patent. And that individual happened to be a squatter whose bad faith has been repeatedly affirmed by the CNIPA and the court. Although the number of and the copies among the marks filed on the registrant’s own seem sufficient for our bad faith argument, the more evidence of bad faith, the higher success rate.

Other related actions: selling marks to actual proprietor or at public platform to third parties, registering domain names or e-stores and bundling with trademarks for transfer, coercing others for commercial cooperation, and demanding high transfer fees, license fees, tort compensation, litigation settlement fees, etc.

In order to find evidence from the above-mentioned aspects, we would recommend taking an in-depth investigation of the adversary from the following databases:

• Commercial and business registration
• Trademark
• Patent
• Copyright
• Domain names
• Court judgments and CNIPA decisions

Hope the above could shed some lights on how the tackle the bad faith squatters.

Follow us and stay tuned!

Follow us on LinkedIn! Email: trademark@beijingeastip.com Tel: +86 10 8518 9318 | Fax: +86 10 8518 9338 Address: Suite 1601, Tower E2, Oriental Plaza, 1 East Chang An Ave., Dongcheng Dist., Beijing, 100738, P.R. China

Tackling Bad Faith Trademark Applications or Registrations in China – Part II

by Yan Zhang, Miao Tian & Austin Chang

Previously, we shared the relevant stipulations regarding bad faith trademarks applications or registrations in the China Trademark Law 2019 (“Trademark Law 2019”), our insights on the required factors when applying bad faith stipulations, and the current trend and practices. In the next few articles, we will be sharing cases with analysis on how the CNIPA and the courts apply the laws to tackle bad faith trademark applications or registrations.

1. Opposition against “CISCO” filed by an individual

A Chinese individual filed an application for “” on August 27, 2018, designating on “Razors, electric or non-electric; Crimping irons; Beard clippers; Hair clippers for personal use, electric and non-electric; Depilation appliances, electric and non-electric; Pedicure sets” in class 8. That same Chinese individual filed seven applications in total, including one in class 7 and six in class 8.

Cisco filed an opposition against the opposed mark before the CNIPA. The CNIPA found that Cisco’s marks bore relatively high originality and the evidence can prove that, through Cisco’s consistent use and promotion, its marks have obtained relatively high fame among consumers. The opposed mark was identical with Cisco’s marks in terms of letter composition, so the CNIPA deemed that the applicant’s filing for the opposed mark showed bad faith of copying and imitating Cisco’s marks, which violated the good faith principle. According to Article 7 and Article 30 of the Trademark Law 2019, the CNIPA refused the opposed mark for registration.

Although procedurally the applicant has the right to file an appeal against the refusal decision, he did not appeal the decision and the opposed mark has been recorded as void.

2. Opposition and subsequent Appeal against “LAMAZE (stylized)”

A Chinese company filed an application for “” on March 20, 2017, designating on “Table cutlery [knives, forks and spoons]; Cutlery; Spoons; Spoons, table forks and table knives for babies; Hand operated hand tools; Knives [hand tools]; Sabres; Graving tools [hand tools]; Nail clippers; Flat irons” in class 8. The applicant has 14 applications in total, designating on goods of baby suits, babies’ pacifiers, toys, cutlery, household linen, etc. in different classes.

Lamaze filed an opposition against the opposed mark. The CNIPA found that, the evidence submitted by Lamaze can prove that, prior to the application of the opposed mark, Lamaze had registered and used the marks of LAMAZE and “LAMAZE in Chinese” and had obtained certain fame. Further, LAMAZE and “LAMAZE in Chinese” were fanciful words that bore certain originality. The opposed mark was identical with Lamaze’s marks in terms of letter composition, which was hardly a coincidence and the applicant failed to make reasonable explanations of its creation source. Thus, the applicant’s filing for the opposed mark showed bad faith of copying other’s famous prior marks and free-riding of the goodwill thereof, which not only was likely to cause consumer confusion, but also impaired the normal order of trademark registration and fair competition, and violated the good faith principle. Given the above, the CNIPA refused the registration of the opposed mark based on Article 7 and Article 30.

The applicant was not satisfied and filed a registration refusal appeal against the decision. In the appeal, the CNIPA affirmed the above filings and further ruled as follows:

The applicant filed altogether 14 applications, aside from the opposed mark, the other marks of “Vulli Sophie,” “B toys,” and “OXO tot” are all identical with others’ brands with strong distinctiveness and high reputation. As the applicant neither made reasonable explanations nor provided evidence of its actual use of the marks, the applicant’s behavior showed obvious bad faith of copying others’ marks, violated the good faith principle, impaired the normal order of trademark registration administration, and was detrimental to the market order and fair competition. The CNIPA concluded that the opposed mark constituted the circumstance of “obtaining registration by other unfair means” as stipulated in Article 44.1, and refused the opposed mark from registration accordingly.

The applicant did not further appeal the decision to the court, the opposed mark, as well as other series marks filed by the applicant have been recorded as void.

3. Comments

In China, the division of class and subclass set in the Similar Goods and Services Classification Guide plays an important role in determining if the goods or services are similar. When the right owner’s mark obtains certain fame but has not yet reached the degree of well-known, it is difficult to obtain cross-class or cross-subclass protection based on the provisions for similar marks used on similar goods and services in the Trademark Law 2019, even if the marks are identical or substantially similar. To combat such copycats, bad faith clause could be considered as a good alternative.

As we advised in Part I, several circumstances can be deemed sufficient to show bad faith:

• hoarding massive trademarks in various un-related classes;
• applying for many trademarks identical with or similar to multiple business signs with certain popularity or high distinctiveness;
• applying for a large number of trademarks within a short period of time and obviously beyond reasonable need; and
• having been found of being a squatter in earlier trademark cases.

A mark’s life depends on its use. In order to apply the bad faith stipulations, the easiest way is to prove that the other party does not have the intent to use the target mark and is hoarding trademarks for future profits through sales. For example, a large number of marks filed that designated a broad range of goods and services obviously exceed the reasonable need for regular business. These marks filed without genuine intention to use would soon be slapped with a price tag.

Accordingly, it would not be difficult to convince the CNIPA to find that an opposed mark's applicant has bad faith, if, for example, it applied for hundreds or thousands of trademarks, or if its applications are all copies of numerous famous brands and designated in all 45 classes, or the marks are up for sale via public platforms or private channels.

In the above two cases, however, the applicants filed rather limited number of marks (seven) and designated goods for their core business, so the “hoarding” argument won’t be persuasive as these marks appear, on its face, to have “genuine intention to use.” Not to mention that in reviewing and adjudicating administrative trademark cases, the CNIPA is rather prudent and strict in applying bad faith articles, especially at the opposition stage. Having said that, East IP was up to the challenge.

Facing an uphill fight, East IP threw the following bullets and prevailed:

1. Demonstrate with solid evidence the cited mark’s strong distinctiveness and high fame;
2. Illustrate the copied brands with great details;
3. Find and demonstrate “unique traits” of the opposed mark’s applicant.

Demonstrating the cited mark’s distinctiveness would minimize the likelihood of coincidence in creating an identical mark. At the same time, the cited mark’s high fame implies the possibility that the opposed mark’s applicant has access to the opponent’s marks and the potential benefits from securing such a copied or imitated mark.

Regarding collecting the materials to prove high fame, our well-known mark series could shed some lights.

As for demonstrating applicant’s copying of the marks, the devil lies in the details and clarifications on presenting to the CNIPA and courts with facts and evidence showing the applicant’s imitational behavior, the clearer the more likely that they will reward you with a favorable decision.

In the CISCO case, among the seven marks filed by the applicant, six are imitations of Cisco, Philips, or Siemens, whose distinctiveness and fame are well acknowledged. In the LAMAZE case, all the 14 marks filed by the applicant are copies of brands in the baby products industry, for which we prepared a straightforward chart and supportive evidence.

Last but not the least, “unique traits” of the opposed mark’s applicant could turn out to be the more crucial factor that successfully offset the lack of “hoarding” in these two cases.

In the CISCO case, the applicant is an individual as opposed to a corporation. In China, any natural person who applies for trademarks should be a responsible person running an individual business or a leased rural household, or someone with the permission to engage in business operation. Compared with legal persons, natural person is required to file trademarks with designated goods or services limited to the business scope set in their business certificates or to their own agricultural products.  Hence, it can be legitimately presumed that an individual, different from corporations who may have multiple brands and carry out various business operations, should have less needs for filing multiple trademarks in various goods and services. Accordingly, though the absolute quantity of seven marks is not large, the fact that the applicant being an individual and the ratio of 6 copies and imitations out of the total 7 marks applied overcome the lack of “hoarding” trademarks.

In the LAMAZE case, the unique traits of the applicant is being a “peer” – the applicant is engaged in the baby products industry, the marks it copied are brand owners in baby products industry, the applied-for goods under the copied marks are related to baby products. A player in the same industry not only indicates a high possibility of awareness over the copied brands, but also increases the likelihood of consumer confusion if the copied marks are to be registered and used on the identical goods.

Accordingly, the fact that the applicant resides in the same line of business and the odd proportion of copied trademarks to overall applications serve to offset the shortage of “hoarding.”

Like we stressed in Part I, there is interdependence among the relevant factors for bad faith, and that a relatively small number of trademark filings may be offset by 1) a greater degree of earlier marks’ distinctiveness, 2) a greater degree of the proprietaries’ fame, 3) a higher level of association of the professionalism of the designated goods or services, etc. Similarly, a lesser degree of similarity between the marks may be offset by 1) a closer distance of two parties’ domicile, 2) a closer relatedness of the two parties’ lines of business, 3) a larger amount of the applicant’s trademark filings, etc.

An in-depth investigation of the opposed party and a comprehensive assessment of all factors are highly recommended if one expects a good outcome.

Next, we will continue to share different cases to showcase how to tackle squatters in China.

Follow us and stay tuned!

Follow us on LinkedIn! Email: trademark@beijingeastip.com Tel: +86 10 8518 9318 | Fax: +86 10 8518 9338 Address: Suite 1601, Tower E2, Oriental Plaza, 1 East Chang An Ave., Dongcheng Dist., Beijing, 100738, P.R. China

Tackling Bad Faith Trademark Applications or Registrations in China – Part I

by Yan Zhang, Miao Tian & Austin Chang

In this series, we are going to share our insights on how to best deal with bad faith trademark applications, a constant headache for foreign brand owners due to China’s first-to-file system. We will begin with the relevant stipulations in the Chinese Trademark Law of China (2019 Version) (“Trademark Law 2019”), the required factors when applying the laws, the current trend in tackling bad faith trademark applications or registrations, and finally demonstrate how to tackle the bad faith trademark applications or registrations with our successful cases.

1. Overview of the relevant stipulations in the Trademark Law 2019

We will start with an overview of the relevant portions of the provisions in the Trademark Law 2019.

Article 4

A malicious application for trademark registration not filed for the purpose of using the trademark shall be refused.

Article 7.1

The good faith principle shall be upheld in the application for trademark registration and in the use of trademarks.

Article 44.1

A registered trademark shall be declared invalid by the Trademark Office if […] its registration is obtained by fraudulent or other improper means. Other entities or individuals may request the Trademark Review and Adjudication Board to declare the aforesaid registered trademark invalid.

These are the key articles that shall be applied when the CNIPA (“China National Intellectual Property Administration,” formerly the Trademark Office and Trademark Review and Adjudication Board) and the courts (Beijing Intellectual Property Court and Beijing High People’s Court) establish a bad faith case.  Typically, at the opposition stage, examiners tend to apply Articles 7, while Article 44.1 is commonly invoked in invalidation actions; and we expect to see more application of Article 4 after the amendment of the Trademark Law 2019 that explicitly added the requirement of “intention to use” for filing trademark applications. Different from the CNIPA, the courts tend to apply Article 44.1 not only to invalidate registered trademarks, but also against applications pending in opposition proceedings. In recent years, there has been an increasing reliance on Article 44.1 in cases where the applicant squatted quite a number of others’ famous marks.

2. The required factors when applying the bad faith clause

Following the relevant laws regarding bad faith trademark applications and registrations, we will move onto the required factors when applying the bad faith clause.

First, the Beijing High People’s Court Guidelines for the Trial of Trademark Right Granting and Verification Cases specify what constitutes a bad faith application without intent to use provided in Article 4 and “other improper means” provided in Article 44.1 of the Trademark Law 2019.

Section 7.1 - Application of Article 4 of the Trademark Law

If any trademark applicant obviously lacks the true intent to use and falls into any of the following circumstances, this applicant may be determined to violate the provisions of Article 4 of the Trademark Law 2019:

(1) applying for registration of the trademark identical with or similar to that of various subject with certain popularity or higher distinctiveness, which is regarded as a serious circumstance;

(2) applying for registration of the trademark identical with or similar to that of the same subject with certain popularity or higher distinctiveness, which is regarded as a serious circumstance;

(3) applying for registration of the trademark identical with or similar to any other commercial signs other than trademarks of others, which is regarded as a serious circumstance;

(4) applying for registration of the trademark identical with or similar to any name of place, scenic spot, building and others with certain popularity, which is regarded as a serious circumstance; or

(5) applying for registration of a large number of trademarks without good reasons. If the trademark applicant above claims that he has the true intention of use, but fails to present the relevant evidence, this claim shall not be supported.

Section 17.3 - Determination of specific circumstances of “other improper means” relating to the application of article 44 of the Trademark Law 2019

A trademark under any of the following circumstances may be determined to fall under the circumstances that “the registration is obtained by other improper means” provided in Article 44.1 of the Trademark Law 2019:

(1) the trademark applicant in dispute applies for multiple trademark registrations which are identical with or similar to others’ trademarks with higher distinctiveness or popularity, including the application for trademark registrations of different owners on identical or similar goods or services and also the application for trademark registrations of the same owner on non-identical or dissimilar goods or services;

(2) the trademark applicant in dispute applies for multiple trademark registrations which are identical with or similar to any other corporate names, names of social organization, the names, packaging, decoration and commercial signs of goods with certain influence; or

(3) the trademark applicant in dispute sells the trademark, or file an infringement lawsuit against the users of the prior trademark after failing to transfer at a high price.

The guidelines explicitly provides that bad faith will be inferred where a squatter targets different trademarks belonging to a particular trademark owner. This will significantly improve the applicability of Article 44.1 and turn it into a powerful weapon against those “sophisticated” squatters who copy various trademarks owned by a particular trademark owner instead of different owners.

Second, the State Administration for Market Regulation also published Several Provisions for Regulating Applications for Trademark Registration, which set parameters for determining bad faith practices and bad faith applications for trademarks that are not intended for use, such as number of trademarks applied, classes of trademarks applied, transaction records of trademarks, business operation of the applicant, effective rulings on infringement or bad faith registration, and among other things.

To sum up, if the owner or applicant of a target mark fits any or all of the below circumstances, it is recommended that brand owners considering taking actions safeguarding valuable intellectual property assets.

• hoarding of massive trademarks in various un-related classes;
• applying for many trademarks identical with or similar to multiple business signs with certain popularity or high distinctiveness;
• applying for a large number of trademarks within a short period of time and obviously beyond reasonable; or
• having been found of being a squatter in earlier trademark cases.

Note, however, among the said circumstances, there is not yet a definition for “a large number” or “severe circumstances.”

In practice, we find that when performing a comprehensive assessment in establishing bad faith, some interdependence among the said relevant factors usually occur.  For instances, a relatively small number of trademark filings may be offset by 1) a greater degree of earlier marks’ distinctiveness, 2) a greater degree of the proprietaries’ fame; 3) a closer distance of two parties’ domicile, 4) a closer relatedness of the two parties’ lines of business, 5) a higher level of association of the professionalism of the designated goods or services, etc.

Further, the CNIPA published in March 2021 the Notice on Special Initiative on Cracking Down on Malicious Trademark Squatting ("Notice"), which states that the CNIPA is striving to combat the seven circumstances of malicious trademark squatting which aim at obtaining improper interests, disturbing the trademark administration order, and causing detrimental social impacts. One of the methods to reject bad faith applications is adopting a “fast rejection mechanism” when there are suggestive indications that the applications was filed in bad faith during the trademark application process. Likewise, during oppositions and cancellations, if there are suggestive indications of bad faith, these cases would be prioritize or joined for expedited examination to reject or invalidate those marks.

The Notice shows the CNIPA’s firm standpoint to combat squatting, and from the recent opposition and invalidation decisions, we see a trend in compliance with such determination.

While we will share CNIPA decisions and court judgments applying the bad faith clauses, we set here some drops in the bucket. Spoiler alert!

• At substantial examination stage, the CNIPA refused an individual’s applications by finding that his behaviors of filing fifteen applications in two days, totaling thirty applications as “obviously exceeding regular business needs” and “should be considered as malicious trademark applications not for the purpose of use”;
• In an opposition case, the CNIPA found the opposed party “in violation of the legislative intent of securing registration by improper means” when the opposed party has four marks in total;
• In an invalidation action, after the CNIPA already supported the proprietor under Article 30 of the Trademark Law 2019 (similar marks used on similar goods/services), it further invoked Article 44.1 and affirmed the applicant’s bad faith because it domiciled close to the proprietor and had applied seventeen marks similar to the proprietor’s mark.

Enough for this week, follow us and stay tuned for more cases in the upcoming issues!

Follow us on LinkedIn! Email: trademark@beijingeastip.com Tel: +86 10 8518 9318 | Fax: +86 10 8518 9338 Address: Suite 1601, Tower E2, Oriental Plaza, 1 East Chang An Ave., Dongcheng Dist., Beijing, 100738, P.R. China

Well-Known Mark Recognitions in China – Part IV

by Yan Zhang, Feifei Bian & Austin Chang

In Part III of this series, we selected our representative cases to further illustrate how the courts apply well-known mark recognition and extend the scope of protection for a well-known mark. In Part IV, the finale of our well-known mark recognition in China, we would like to share with you our insights on how to collect evidence for well-known mark recognition for goods and service in the software and internet industry. Collecting evidence for intangible items is already demanding. Collecting evidence for intangible items for well-known recognition is even more challenging but possible.

1. “PHOTOSHOP” v. “photoshop”

Beijing Liantuochuangxiang Technology Development Co., Ltd. (“Liantuo”) applied for the “photoshop” mark (“Disputed Mark”) with App. No. 9329485 in Class 3 for “lipstick; nail polish; cosmetics; cosmetic pens; eyebrow cosmetics; perfume; eyebrow pencil; rouge; eye shadow cream; dyed lash oil” on April 12, 2011.

Disputed Mark	Cited Mark

Adobe owns a prior registration for the “PHOTOSHOP” mark (“Cited Mark”) with App. No. 573256 in Class 9 for “computer program.”

Adobe filed an opposition against the Disputed Mark on April 20, 2012 before the CNIPA. The CNIPA rendered a decision allowing the Disputed Mark to be registered. Unsatisfied, Adobe appealed but the CNIPA affirmed the Disputed Mark’s registration. Adobe filed an administrative appeal against the CNIPA before the Beijing First Intermediate Court. The court rejected Adobe’s appeal against the CNIPA. Adobe appealed to the Beijing High Court which, finally, ruled in favor of Adobe and ordered the CNIPA to reissue its decision.

In this case, the Beijing High Court found that Adobe submitted sufficient evidence in proving the Cited Mark enjoyed high fame through long-term and extensive promotion and use. For example, thousands of media reports from the People’s Daily, Guanming Daily, China Computer News, Computer World, etc. were submitted as evidence proving the Cited Mark enjoyed high fame. Adobe also submitted the various awards “PHOTOSHOP” received, such as “Computer World’s Annual Product Award” and “Milestone Product of China Information Industry 20 Years Award.” Adobe provided records of its annual certificate examination for “National Computer Application Technical Certificate for Photoshop 6.0” since 2001, as well as the number of “PHOTOSHOP” downloads from the Internet. Given the above, the court held that Adobe’s evidence met the criteria to recognize the “PHOTOSHOP” mark as a well-known mark.

Considering that the Cited Mark had strong inherent distinctiveness and the Disputed Mark was identical to the Cited Mark, the court found that the Disputed Mark was a copy of the Cited Mark. Although the Disputed Mark’s designated goods for “lipstick” had certain variance with the Cited Mark’s approved goods for “computer program,” the relevant consumers for the two marks would still overlap. After comprehensively considering the above analysis, namely, the Cited Mark had inherent distinctiveness, enjoyed high fame, the two marks were identical, the court concluded that the Disputed Mark’s designated goods for “lipstick” was likely to weaken the close association between the Cited Mark and its approved goods for “computer program,” dilute the Cited Mark’s distinctiveness, and damage Adobe’s interests.

2. “Mei Tu Xiu Xiu and MEITUXIUXIU” v. “Mei Tu Xiu Xiu”

An individual Rongxiong BEI applied for the “Mei Tu Xiu Xiu and MEITUXIUXIU” mark (“Disputed Mark”) on April 19, 2013 with App. No. 12454059 in Class 3 for “detergent; grinding paste; rose oil; toothpaste; dried petal and perfume mixture (perfume); animal cosmetics; air fragrance; cosmetics; shampoo; shoe polish,” and the Disputed Mark was approved for registration on September 28, 2014.

Disputed Mark	Cited Mark

Xiamen Meitu Technology Co. (“Meitu”) applied for the “Mei Tu Xiu Xiu” mark (“Cited Mark”) on December 8, 2008 with App. No. 7099841 in Class 9 for “optical disk; information processor (central processing unit); computer software (recorded); electronic dictionary; recorded computer program (program); computer; computer program (downloadable software); network communication equipment; electronic sound device with books; magnetic data medium,” and was approved for registration on October 14, 2010.

Meitu filed an invalidation against the Disputed Mark with the CNIPA on July 24, 2015. Upon adjudication, the CNIPA held that the Disputed Mark shall be invalidated. BEI appealed to the Beijing IP Court. The Beijing IP Court rejected BEI’s appeal. BEI then appealed to the Beijing High Court. The Beijing High Court affirmed the CNIPA’s decision and ruled in favor of Meitu. BEI, still unsatisfied, petitioned to the Supreme People’s Court for retrial but the petition was rejected.

In its decision, the Beijing High Court found that prior to the Disputed Mark’s application date, the Cited Mark had occupied a rather large market share and covered wide range of regions for sales through long-term, extensive, and continued promotion and use on its approved goods for “computer software (recorded), recorded computer program (program), computer, etc.” The Cited Mark constituted as a well-known mark because it had been known to the relevant public and enjoyed high fame.

The court reasoned the Cited Mark consisted of four Chinese characters “Mei Tu Xiu Xiu” that did not have particular meaning and had inherent distinctiveness. The Disputed Mark was a copy and imitation of the Cited Mark because the Disputed Mark’s distinctive part was identical with the Cited Mark. Although the two marks designated goods in difference classes, the relevant consumers and target consumers overlapped. Considering the Cited Mark was a well-known mark and that the Disputed Mark’s distinctive part was identical to the Cited Mark, the relevant consumers were likely to be confused regarding the relationship between the two marks when purchasing the Disputed Mark’s designated goods. Such confusion would weaken the Cited Mark’s distinctiveness, unfairly exploit the Cited Mark’s market reputation, and damage the Cited Mark and Meitu’s interests.

3. Beijing East IP analysis and comments

As you may have reckoned, the photoshop and Mei Tu Xiu Xiu cases shared some similarity in that the courts recognized both cited marks as well-known marks on computer program related goods and gave cross-class protection against lipsticks and cosmetic related goods. The two focal points in these two cases are: 1) evidence collection for obtaining well-known mark recognition in connection with software application related goods, and 2) the association between disputed mark’s designated goods or services and cited mark’s approved goods or services.

a. Evidence collection for obtaining well-known mark recognition mark designating software related goods

It is important to note not to apply Article 14 of the Chinese Trademark Law verbatim when collecting evidence for well-known mark recognition. Instead, consider utilizing relevant public’s understanding and recognitions on the marks and the goods involved. In the photoshop case, we supplemented large amount of evidence in the second instance trial to prove that the cited mark had reached well-known status prior to the disputed mark’s application date, including media reports, awards, rankings, sales records, Chinese brochures, China subsidiaries information, China and worldwide judicial and administrative adjudications, to name a few. Since Photoshop is a software, we particularly emphasized Photoshop’s versions, downloads, and user numbers, as well as other facts reflecting that Photoshop is now included in national certificate examinations, included as part of national computer examination, and used as teaching materials. We argued that Photoshop can be considered as well-known because it is included in the national computer application certificate examination and numerous people had taken such exam. Compared to foreign entities, domestic entities such as Meitu tend to have the up hand in collecting evidence originated from China. However, it is more challenging for internet companies than traditional companies collecting evidence for well-known mark recognitions considering the evidence are often intangible. When collecting evidence for Meitu’s cited mark, we collected large amount of use evidence, number of users, product sales records, promotional and advertisement records, and awards received to prove that the cited mark satisfied the well-known mark recognition threshold. For example, for use evidence, evidence of earliest use and software product update records were presented. For product sales records, revenue, profit, tax, sales agreements, collaborators, and regions that products bearing the cited mark covered were presented. Other evidence such as commercial and promotional agreements, fees, media reports, and the actual awards received were submitted as evidence proving the cited mark has reached well-known status. The second instance court found that although Meitu’s profit between 2010 and 2013 was relatively low, profit was merely one of the many factors in determining the cited mark’s well-known status and fame. When determining whether a mark reached well-known status, the focus should be laid on the distinctiveness and well-known status of the cited mark on the approved goods, as well as the internet industry’s operation features, namely, software development and market promotion related investment would likely exceed profit at the beginning.

b. The association between disputed mark’s designated goods or services and cited mark’s approved goods or services

Often, it is difficult to prove the association between disputed mark’s designated goods or services and cited mark’s approved goods or services, especially when these goods or services are in different classes. For example, in the photoshop case, we submitted online media reporting that the approved goods, software, for Adobe’s “PHOTOSHOP” mark can provide various beautify functions and use visual aids during trial to detail how the relevant public use cosmetics prior to taking photos, and subsequently edit photos using the PHOTOSHOP software for beautify purposes to create better photos or pictures presentations. We argued that the disputed mark’s designated goods for “cosmetics” and the cited mark’s approved goods for “software” all carried the functions of beautify human’s faces or images. Thus, the target consumers overlapped and are closely related. Combining the above evidence with the “PHOTOSHOP” mark’s distinctiveness and fame, we further argued that the disputed mark’s registration and use would weaken the one-to-one and unique association between Photoshop and Adobe, dilute the distinctiveness of the well-known “PHOTOSHOP” mark, and damage Adobe’s interests.

Thank you for tuning in to our well-known mark recognition series. If you have any questions, please feel free to contact us.

Next, we will share our experience and insights regarding bad faith trademark registration and how to counter trademark squatting. We selected this topic because China’s first-to-file system can be difficult to navigate for foreign stakeholders who may not always have the need to apply for trademarks in China when they first start their businesses outside of China.

Follow us and stay tuned!

Follow us on LinkedIn! Email: trademark@beijingeastip.com Tel: +86 10 8518 9318 | Fax: +86 10 8518 9338 Address: Suite 1601, Tower E2, Oriental Plaza, 1 East Chang An Ave., Dongcheng Dist., Beijing, 100738, P.R. China

Well-Known Mark Recognitions in China – Part III

by Yan Zhang, Feifei Bian & Austin Chang

In Part II of this series, we shared our representative cases on how to apply the concept of anti-dilution for the protection of a well-known trademark in administrative trademark litigations. In Part III, we selected our representative cases to further illustrate how the courts apply well-known mark recognition and extend the scope of protection for a well-known mark.

1. RITZ-CARLTON v. "LI SI KA ER DUN in Chinese"

Chengdu Zhi Zhi Real Estate Development Co., Ltd. (“Zhi Zhi”) applied for the “LI SI KA ER DUN in Chinese (丽思卡尔顿)” mark (“Disputed Mark”) with App. No. 5336988 in Class 36 for “commercial housing sales services; insurance; capital investment; art valuation; real estate agency; agency; guarantee; raise charitable funds; entrusted management; pawn shop” on May 9, 2006. The Disputed Mark was approved for registration on October 14, 2009.

Disputed Mark	Cited Mark 1	Cited Mark 2

Ritz-Carlton owns prior registrations for the “RITZ-CARLTON” mark (“Cited Mark 1”)  and the “LI SI KA ER DUN in Chinese (丽思卡尔顿)” mark (“Cited Mark 2”) in Class 42 (Class 43) for “hotels; restaurants; barbeque restaurants; tea rooms; etc.”

Ritz-Carlton filed a dispute cancellation against the Disputed Mark on March 28, 2010 before the CNIPA (then the Trademark Review and Adjudication Board). The CNIPA issued a decision that maintained the Disputed Mark’s validity on August 29, 2011. Unsatisfied, Ritz-Carlton appealed to the Beijing First Intermediate Court.

On December 20, 2012, the Beijing First Intermediate Court reversed the CNIPA’s decision. Zhi Zhi was unsatisfied and appealed to the Beijing High Court. On July 31, 2013, the Beijing High Court, as the second instance court, issued the final decision that affirmed the Beijing First Intermediate Court’s decision against Zhi Zhi.

In this case, the Beijing High Court found that the Disputed Mark consisted of “LI SI KA ER DUN in Chinese (丽思卡尔顿)” and before the Disputed Mark’s application date, media and the Internet had widely adapted and used “LI SI KA ER DUN in Chinese (丽思卡尔顿)” to refer to RITZ-CARLTON. Ritz-Carlton submitted sufficient evidence during the administrative and judicial proceedings to prove that they had received great businesses in the hotel industry, received numerous awards, and attracted high levels of media’s attention before the Disputed Mark’s application date. Namely, before the Disputed Mark’s application date, “LI SI KA ER DUN in Chinese (丽思卡尔顿)” could often be seen on various newspapers and the Internet, and such constant media reports subjectively expanded the societal influence of the “LI SI KA ER DUN in Chinese (丽思卡尔顿)” brand, allowed Ritz-Carlton to enjoy high fame among the relevant public in China. Thus, the Disputed Mark constituted as a translation of “RITZ-CARLTON.” Consider the “RITZ-CARLTON” mark obtained relative high fame on hotel related services through uses and promotions, and the Disputed Mark’s approved services for “sales services for commercial real estate and real estate agency” were related to the hotel services, the Disputed Mark’s registration was likely to cause confusion to the public and damage Ritz-Carlton’s interests. The Beijing First Intermediate Court correctly recognized the “RITZ-CARLTON” mark as a well-known mark, based on the evidence submitted, to protect Ritz-Carlton’s trademark rights according to Article 13(2) of the 2001 Chinese Trademark Law (“TM Law”)  (Article 13(3) of the 2019 TM Law).

2. “YAHOO!” v. “YahaoSoft”

Beijing Jing San Pu Business Trading Co., Ltd. (“Jing San Pu”) applied for the “YaohaoSoft” mark (“Disputed Mark”) with App. No. 3610948 in Class 42 for “intellectual property supervision; computer leasing; computer programming; computer software coding; computer software maintenance; creation and maintenance of websites for others; hosting computer stations (websites); computer hardware consulting” on June 30, 2003. The Disputed Mark was published for opposition on May 28, 2005.

Disputed Mark	Cited Mark

Yahoo! owns prior registrations for the “YAHOO!” mark (“Cited Mark”) in Class 42 for “computer service; namely: to query and retrieve the information used on the computer network.”

Yahoo! filed an opposition against the Disputed Mark with the CNIPA on December 1, 2009 and the CNIPA refused the Disputed Mark for registration. Jing San Pu appealed to the Beijing First Intermediate Court. Yahoo! attended the hearing as a third-party attendee. The Beijing First Intermediate Court affirmed the CNIPA’s decision.

In its decision, the Beijing First Intermediate court found that except intellectual property supervision, all other services such as computer leasing, computer programming, etc. were similar to the Cited Mark’s approved services “computer service; namely: to query and retrieve the information used on the computer network.” The “Soft” of the “YahaoSoft” can be understood meaning “software” when used on computer related services, which had weak distinctiveness, and the “Yahao” part was the distinctive part of the Disputed Mark. When compared the Disputed Mark’s distinctive part “Yahao” with the Cited Mark “YAHOO!,” it was obvious that the font and pronunciation were similar. If both marks were to co-exist on identical or similar services, it was likely to cause relevant consumer to be confused or mistaken on the source of services. Thus, the Disputed Mark constituted a similar mark with the Cited Mark according to Article 28 of the 2001 TM Law (Article 30 of the 2019 TM Law).

Yahoo! submitted sufficient evidence during the administrative proceeding to prove that Yahoo! had been using its English trade name “YAHOO!” for computer network related services prior to the Disputed Mark’s application date. Yahoo!’s trade name had attracted market reputation from the relevant public through use. There were strong associations between the computer network related services provided by Yahoo! and the Disputed Mark’s designated services of computer leasing, computer software coding, etc. Accordingly, when the Disputed Mark was registered on the said designated services, the relevant public was likely to be confused as to the source of services and Yahoo’s prior trade name right would be damaged according to Article 31 of the 2001 TM Law (Article 32 of the 2019 TM Law).

The evidence Yahoo! submitted during the administrative proceeding proved it had attracted market reputation before the Disputed Mark’s application date on computer related services, namely, to query and retrieve the information used on the computer network. Combined with the fact that the Disputed Mark’s main distinguishable part was similar to the Cited Mark in font and pronunciation, which constituted as the Cited Mark’s imitation. Although the intellectual property supervision services designated under the Disputed Mark was not similar to the computer services designated under the Cited Mark, given that the Cited Mark had reached well-known status, the Disputed Mark’s use on the said services would likely to cause the relevant public to mistaken that the Disputed Mark had certain association with the Cited Mark, and potentially damage the Cited Mark owner’s interests according to Article 13(2)of the 2001 TM Law (Article 13(3) of the 2019 TM Law).

3. Beijing East IP analysis and comments

In Part I of this series we mentioned that a mark can be recognized as well-known based on the principles of case-by-case recognition and need-based recognition. The main issue presented in the two cases is when and how to apply well-known mark recognition in each case.

First, in the RITZ-CARLTON case, Ritz-Carlton based its grounds on Article 10(1)(viii), Article 13(2), Article 31, and Article 41(1) of the 2001 TM Law. The court found that the Disputed Mark’s registration does not fall into the conditions described in Article 10(1)(viii), Article 31, Article 41(1). The court only applied Article 13(2) in finding that Zhi Zhi’s trademark registration in Class 36 would damage Ritz-Carlton’s well-known mark in Class 42 (Class 43). Here, although Ritz-Carlton based its grounds on four different articles, the court held that the articles other than Article 13(2) did not apply, and that it was necessary to recognize the cited mark as a well-known mark to protect Ritz-Carlton’s trademark rights.

In the YAHOO! case, Yahoo! based its grounds on Article 13(2), Article 28, and Article 31 of the 2001 TM Law. The court applied Article 28 in finding that the Disputed Mark constituted as a similar mark to the Cited Mark when used on similar services. The court also applied Article 31 in finding that the Disputed Mark’s registration on services similar to those services approved under the Cited Mark would damage Yahoo!’s prior trade name right. Here, since the court had applied Article 28 and Article 31 in protecting Yahoo!’s rights against the designated services on computer related services under the Disputed Mark, the court did not apply Article 13(2) for cross-class protection regarding the computer related services. The court’s application of laws clearly demonstrated that when the interest party’s rights can be protected by certain articles raised in its argument, the court will not apply the article regarding well-known mark recognition.

Second, although well-known mark recognition provides cross-class protection, such protection only extends to the relevant goods or services covered by the level of the mark’s well-known status, that is, the cross-class protection does not extend to all 45 classes. In the RITZ-CARLTON case, the court recognized the “RITZ-CARLTON” mark was well-known in hotels services. The Disputed Mark’s approved goods on commercial housing sales services and real estate agency services were related to hotels services. Based on this finding, the court concluded that the Disputed Mark’s registration on the said services would be likely to cause confusion to the relevant public and damage Ritz-Carlton’s interests. The court, however, did not grant protection against other services (insurance; capital investment; art valuation; agency; guarantee; raise charitable funds; entrusted management; pawn shop) under the Disputed Mark. In the YAHOO! case, the court granted cross-class protection on the intellectual property supervision service based on Yahoo!’s arguments that, in the Internet industry, intellectual property supervision was closely related to Yahoo!’s well-known search engine related services and serves similar consumers.

Finally, the evidence we submitted on behalf of our clients during the administrative litigation proceedings was key in obtaining the well-known mark recognition. Generally, courts do not always admit new evidence in administrative litigation. In the RITZ-CARLTON case, the CNIPA and the courts have different views as to whether the “RITZ-CARLTON” mark could be recognized as a well-known mark. The difference lies in the admissibility of the large amount of new evidence submitted during the court proceeding. We collected and submitted copies of various evidence found through the National Library, the Shanghai Library, the China Tourism News, the People's Daily, Xinhua Net, CNKI and other media as corroborative evidence. Meanwhile, we further submitted the notarized documents as corroborative evidence to satisfy the formality requirement. The courts affirmed that the new evidence is to strengthen the evidence submitted during the CNIPA proceeding, in which Ritz-Carlton submitted substantial evidence to support its arguments. If not admitted, Ritz-Carlton’s rights would be severely damaged. Especially under the circumstance that when comprehensively consider all evidence submitted, the cited mark can be recognized as a well-known mark, not admitting the supplemental evidence would be unjustified.

As you may have guessed, evidence collection is an important phase in obtaining well-known mark recognition. Next, we will share different cases to further elaborate how to best collect evidence for a well-known mark.

Follow us and stay tuned!

Follow us on LinkedIn! Email: trademark@beijingeastip.com Tel: +86 10 8518 9318 | Fax: +86 10 8518 9338 Address: Suite 1601, Tower E2, Oriental Plaza, 1 East Chang An Ave., Dongcheng Dist., Beijing, 100738, P.R. China

Well-Known Mark Recognitions in China – Part II

by Yan Zhang, Feifei Bian & Austin Chang

Previously, we shared our insights on how to secure well-known mark recognitions in China and its benefits. In the next few articles, we will be sharing cases with analysis on how the courts apply well-known mark recognitions to various facts.

1. “Cisco in Chinese” v. “SIKE and SI KE in Chinese”

Foshan City Shunde District Lunjiao Junze Electrical Appliance Factory (“Lunjiao”) applied for the Disputed Mark No. 13618667 on November 27, 2013 and was approved for registration on November 28, 2016 in Class 11 for “electric cooker; electric kettle; electric water heater; electric yogurt maker; electric pressure cooker (pressure cooker); gas stove; gas water heater.” Cisco applied for the Cited Mark No. 3999024 on April 6, 2004 and was approved for registration on September 7, 2006 in Class 9 for “network communication equipment; telephone; etc.”

Disputed Mark	Cited Mark

Cisco filed an invalidation request on February 27, 2017 before the CNIPA. The CNIPA affirmed the Disputed Mark’s validity. Cisco appealed the decision to the Beijing IP Court. On May 24, 2019, the Beijing IP Court reversed the CNIPA’s decision and ordered the CNIPA to re-render its decision based on the Beijing IP Court’s decision.

In its decision, the Beijing IP Court found that the evidence submitted by Cisco is sufficient to prove the well-known mark status of “CISCO in Chinese (思科)” on “network communication equipment” in Class 9 prior to the application date of the Disputed Mark. Further, the Beijing IP Court found that the Disputed Mark’s specific composition combining “SIKE” and “SI KE in Chinese (思科)” copied and imitated Cisco’s well-known mark. The Disputed Mark’s approved goods for “electric cooker; electric water heater; etc.” were common household consumer goods that were likely to attract relevant consumers who were attracted to the Cited Mark’s approved goods. Meanwhile, Lunjiao failed to provide reasonable explanations regarding the idea that shaped the Disputed Mark’s creation. Cisco’s evidence also showed that in addition to the Disputed Mark, Lunjiao applied for six other trademarks, one identical to the Disputed Mark and five “3M” marks, which inevitably suggested the likelihood of Lunjiao’s bad faith intention in free riding other’s goodwill. Similarly, the Disputed Mark’s relevant consumers were likely to associate Cisco’s well-known mark “Cisco in Chinese (思科)” upon seeing the identical Chinese characters used in the Disputed Mark. The Disputed Mark may also dilute the well-established corresponding relationship between Cisco and its well-known mark “Cisco in Chinese (思科),” impaire the distinctiveness of Cisco’s well-known mark, and damage Cisco’s well-known trademark rights.

2. “McFlurry in Chinese” v. “MAI XUAN FENG in Chinese”

China Top Foods Co., Limited (“Top Foods”) applied for the Disputed Mark No. 12049136 on January 15, 2013 and was approved for registration on November 28, 2015 in Class 35 for “advertisement promotion; advertising design; commercial management of franchising; marketing for others; personnel management consulting; business enterprise migration; compiling information into computer databases; accounting; vending machine rental; seeking sponsorship.” McDonald’s applied for the Cited Mark 1 No. 1646857 in Class 29 for “meat products; pork products” and Cited Mark 2 No. 8666342 in Class 30 for “ice cream, etc.” prior to the Disputed Mark’s application date.

Disputed Mark	Cited Mark 1	Cited Mark 2

McDonald’s filed an invalidation request on August 19, 2016 before the CNIPA. The CNIPA affirmed the Disputed Mark’s validity. McDonald’s appealed the decision to the Beijing IP Court. On August 1, 2019 the Beijing IP Court reversed the CNIPA’s decision and ordered the CNIPA to re-render its decision based on the Beijing IP Court’s decision.

In its decision, the Beijing IP Court found that the Cited Mark 1 and Cited Mark 2 (“Cited Marks”) could be recognized as well-known marks based on the evidence McDonald’s submitted. The evidence showed that prior to the Disputed Mark’s application date, McDonald’s carried out long-term, extensive, and numerous promotions for the Cited Marks “McFlurry in Chinese (麦旋风)” on milk products, ice cream, etc. in mainland China. The Chinese characters used in the Disputed Mark were identical to the Cited Mark 2. The only undiscernible difference between the Disputed Mark and the Cited Mark 1 was that the Disputed Mark used traditional Chinese and the Cited Mark 1 used simplified Chinese. Based on foregoing reasons, the Disputed Mark copied the Cited Marks. Moreover, because the Cited Marks had strong distinctiveness with high fame, even if the approved services “advertisement promotion, etc.” under the Disputed Mark were unrelated to the approved goods “milk” and “ice cream” under the Cited Marks, the relevant consumer would inevitably associate McDonald’s and its well-known marks upon seeing the Disputed Mark. Such association would damage the well-established correspondence between McDonald’s and the Cited Marks, decrease the distinctiveness of McDonald’s well-known mark, and damage McDonald’s interests.

3. Beijing East IP analysis and comments

The standard applied for well-known mark protection can be found in Article 9(2) of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Civil Dispute Cases Involving Well-Known Trademark Protection (“SPC Interpretation”) which states that associations that are capable of confusing the relevant public to believe that the accused trademark has a considerable degree of association with a well-known mark, thereby weakening the distinctiveness of that well-known mark, derogating the market reputation of that well-known mark, or improperly using the market reputation of that well-known mark. This standard shall be consistently applied across administrative and civil trademark litigations. The SPC Interpretation established that, instead of likelihood of confusion, courts shall focus on impairing a well-known mark’s distinctiveness, harming a well-known mark’s reputation, or improperly using a well-known mark’s market reputation when finding damage for a well-known mark. Such approach is aimed at protecting a well-known mark’s distinctiveness from impairment and preventing harm from the one-to-one association established between a well-known mark and its particular goods and services.

In judicial practice, when determining the scope of protection for a well-known mark, courts should comprehensively consider the well-known mark’s distinctiveness, fame, similarity between the marks, actual use of the approved goods, degree of overlapped relevant consumers and their attentions, and the subjective state of mind of the disputed mark’s applicant.

The Cisco and the McFlurry cases reflect how well-known mark protection extends the scope of protection in administrative trademark litigations to not only eliminate potential likelihood of confusion but also prevent well-known mark from dilution.

In this Cisco case, the disputed mark’s approved goods “electric stove; electric water heater, etc.” are common consumer goods that face a wide range of relevant public, which overlaps with the targeted consumer of Cisco’s approved goods “network communication equipment.” Considering Cisco’s cited mark “CISCO in Chinese (思科)” has strong distinctiveness and has established a close association with Cisco through long-term promotion and use. In recognizing Cisco’s cited mark as a well-known mark and granting cross-class protection, the court considered whether the disputed mark would break the one-to-one association and the well-established connection between Cisco’s famous network communication equipment and its cited mark, and whether the disputed mark would impair the cited mark’s distinctiveness. Similarly, in the McFlurry case, although the approved goods “advertisement promotion” for the disputed mark are not necessarily related to the approved goods “milk” and “ice cream” for the cited mark, the court applied the dilution principle when recognizing McDonald’s cited marks as well-known because of its relative high fame and granted the cited marks with additional protections. In other words, the scope of protection of a well-known mark shall match its degree of fame, namely, potentially expand its scope of protection.

Moreover, the subjective state of mind of the disputed mark’s applicant is also an important factor. In the Cisco case, Lunjiao failed to provide reasonable sources of its idea in creating the disputed mark. Together with the five “3M” marks Lunjiao applied, its bad faith in free riding other’s fame can hardly be ignored. In the McFlurry case, Top Foods applied “M MACCAS” marks in many Classes and its only shareholder applied for “Man Ji in Chinese (满记) (A famous desserts shop from Hong Kong),” “HILTON,” “Xin Zhou Kan in Chinese (新周刊) (A famous magazine in China), etc.” These trademark filings suggest bad faith in copying and imitating other’s highly famous trademarks.

Finally, when considering whether a mark shall be recognized as well-known, judicial and administrative authorities usually refer to Article 14 of the Trademark Law. Additionally, financial statistics are proven to be important supporting evidence for well-known mark recognition such as sales numbers, tax, audit report, etc. Foreign entities, however, may have difficulties in providing such information as supporting evidence. In helping our clients tackle such a challenge, we devote crucial time and efforts to find evidence from all angles and connect each piece of evidence found into a complete evidence chain. In building such evidence chain, we strive to find essential data and locate critical evidence five years prior to the disputed mark’s application date. Under the circumstances that the clients were unable to provide its sales number and market share data in China directly to us, we parsed through targeted online and offline media that reported the sales number and market share data in China, combining with rankings from authoritative magazines such as Fortune and Businessweek, published annual reports, and awards received to persuade the courts to recognize the well-known mark.

Next, we will continue to share different cases to showcase how well-known mark protection is done in China.

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Securing well-known mark (WKM) recognitions in China can give a broader protection to brand owners in both administrative and judicial disputes.

E-commerce Law and E-commerce Intellectual Property Protection Forum, which was sponsored by Beijing Municipal Intellectual Property Office and Beijing Higher People’s Court, and hosted by Beijing Intellectual Property Protection Association and the Intellectual Property Protection Alliance of E-Commerce, was successfully held on September 12, 2019 in Beijing.

Appointed Translators: Jason WANG / Austin CHANG, Beijing East IP Law Firm
Author: Baoqing ZANG, Trademark Review and Adjudication Board (TRAB)
Original Chinese text: China Industry and Commerce Newspaper June 21, 2016

On February 28, the Beijing IP Court (“IP Court”) issued a decision in Qilu Pharmaceutical v. the PRB ((2017)京73行初字No. 5365), which reversed a ruling by the Patent Reexamination Board (“PRB”) that upholds the validity of Patent No. 200910176994.1 (the “’994 patent”) owned by Beijing Sihuan Pharmaceutical (“Sihuan”). The IP Court holds that the inauthentic experimental data presented in the original description result in the failure to satisfy the enablement requirement.

China has three types of patents, i.e., invention, utility model, and design. The utility model patent does not have the counterpart in some other jurisdictions such as the USA, so some essential aspects of the utility model patent will be introduced below for better understanding of it.

On December 20, 2017, in the Patent Reexamination Board of SIPO (PRB) v. Beijing Winsunny Harmony Science & Technology Co., Ltd. ((2016)最高法行再41号), the Supreme Court held that a Markush claim, when drawn to a class of chemical compounds, should be interpreted as a set of Markush elements rather than a set of independent specific compounds. The present case is a petition for retrial filed by the PRB, requesting the Supreme Court to review the second-instance decision made by the Beijing High People’s Court (“High Court”). In reversing the PRB’s decision in the invalidation proceedings instituted by Beijing Winsunny Harmony Science & Technology Co., Ltd. (“Winsunny”), the High Court recognized a Markush claim as claiming a set of parallel technical solutions. 

Abstract: Currently “common knowledge" has become a hot topic in academic research. How to correctly determine common knowledge has become the key to improve the quality of patent examination. This paper introduces the availability bias theory to point out that the common knowledge determining process tends to produce availability bias, give too much weight to the easily conceived technical knowledge, and turn a blind eye to a lot of other information that must be considered, leading to errors in determining common knowledge. In patent examination, the availability of parts, the availability of work methods and the availability of technical problems may lead to the availability bias. In the end, the countermeasures is put forward.

Just at the beginning of this year, the Patent Reexamination Board (PRB) of SIPO issued a decision in a notable patent invalidation trial against Novartis’s patent on Entresto (Sacubitril/Valsartan), holding all the claims of the patent invalid as being obvious.

The similarity criteria is always a focus of attention in determination of design infringement. Conventionally, people often discuss whether two designs are alike in determining design infringement without objective analysis standards.

For a service invention-creation, the right to apply for a patent belongs to the entity. After the application is allowed, the entity shall be the patentee. In these cases, the Supreme Court provided a method to determine whether an invention-creation in a patent application is a service invention.

The type of the infringement of making and selling a component patent that contains a patented component has been expressly determined, in the judicial interpretation published by the Supreme People’s Court in December 2009, as infringing actions of “using” and “selling” a patented component.

In patent infringement litigations, the right owner usually selects independent claim(s) with largest scope of protection for enforcement of the patent right. Senior patent attorney Bing Wu combines the SPC interpretations and his trial experiences to provide a brief guide on building a good foundation of selecting the rights claims is crucial for winning a patent infringement in China.

In its latest report the Supreme People's Court explains the new patent, trademark and copyright concepts explored through 2015's most complex and major IP disputes.

Article 25 of SPC'S Judicial Interpretation on Trial of Patent Infringment Dispute where products infringing a patent right are used, offered to sell, or sold for production or business purposes without knowing said products were manufactured and sold without the authorization of the patentee, and......

Article 14 of SPC'S Judicial Interpretation on Trial of Patent Infringment Dispute , the People’s Court, in determining the knowledge level and cognitive ability of the ordinary consumers for a design, generally shall consider the design space of the same or similar type of products to which the patented design belong at the time of the occurrence of the alleged infringement action.

Article 21 of SPC’S Judicial Interpretation on Trial of Patent Infringement Disputes where a provider provides, for production or business purposes and without authorization of the patentee, a product to another party to commit a patent infringement action, with the knowledge that the product is material, device, component, intermediate and so on specialized for exploiting the patent, the People’s Court shall support the right owner if he or it assets that the action of the provider belongs to assisting another party to commit a tort provided in Article 9 of the Tort Law.

In April, 2016, Beijing Intellectual Property Court made the first instance judgment, canceled the Rejection Appeal Decision regarding the mark “AIR RESCUE & Design” made by the Trademark Review & Adjudication Board (TRAB), and determined that the TRAB shall make a new decision on the application for review regarding the mark “AIR RESCUE & Design”.

Two U.S. brands recently battled brand squatters in China with very different outcomes. Facebook won. Apple lost. Jason Wang and Amy Hsiao look behind these different results for strategic insights. What are the key issues to bear in mind when an infringer copies your brand – in China? The authors, including the lead attorney for the Facebook case, tell you the secrets.

Article 20 Where process or treatment is made to a follow-up product, which was obtained by further processing or treating a product directly obtained by a patented process, the People’s Court shall determine the action does not belong to “using the product directly obtained by the patented process” prescribed in Article 11 of the Patent Law.

The Apple-Facebook different outcome is not a result of inconsistency or “double standard”; rather, it is a result of applying the most fitting sets of laws -- under the Chinese system -- to the facts in each case. Although the two cases involve similar facts, the attorneys in each case have relied on different sets of law as their primary arguments and this strategy difference has had a crucial impact on the final outcome.

Article 27 Where it is hard to determine a right owner’s actual loss caused by infringement, the People’s Court shall request the right owner to provide evidence regarding benefit that the infringer has obtained from the infringement according to Article 65, Paragraph 1 of the Patent Law.

Article 59 of the Patent Law of the People’s Republic of China (“Chinese Patent Law”) provides that: The protection scope of a patent right for invention or utility model shall be determined by the terms of the claims. The description and the appended drawings may be used to interpret the content of the claims.

The extent of protection for an inventioCXVZCXVVCVCVXVCVn patent includes not only the extent determined by the technical features literally recited in the claims, but also the extent determined by the equivalent technical features.

In the recent practice, the famous carmaker Tesla Motors, Inc. filed two civil lawsuits in China in September 2013 before Beijing Third Intermediate Court, against ZHAN Bao Sheng. ZHAN is the registrant of the disputed trademark of the “TESLA TESLA MOTORS and T Design” in China, where Tesla Motors, Inc. has filed disputed cancellations before the Trademark Review and Adjudication Board (TRAB) as well.

The patentee who wants to enforce his patent in China should pay attention to the principle of allocating the burden of proof which is one of the most important factors affecting whether the intended goal could be achieved in patent infringement litigation.

Forum shopping is an important issue in a patent infringement lawsuit. Under the Chinese Civil Procedure Law, a plaintiff in an infringement case shall file the litigation with a court at the place of infringement or at the place where the defendant is domiciled. However, it often happens that the alleged infringing manufacturer or seller is not in the jurisdiction where the plaintiff wishes to bring the litigation.

A common question regarding English commercial signs, such as trademarks, personal names, or trade names, is how to protect their Chinese equivalent. On the one hand, the holder of the English commercial sign failed to select the Chinese equivalent for some reasons, or failed to have it registered as a trademark in a timely matter. On the other hand, the holder may have used the Chinese equivalent together with the English mark in commerce, or have used the Chinese equivalent passively.

When foreign brands enter into the China market they are generally translated into Chinese, either for use by the brand owners, or by Chinese media and Chinese public. According to authorities including the China Supreme Court, some Chinese equivalents for its English trademarks are protected, such as GOOGLE, CANON, LAND ROVER, HARLEY (of Harley-Davidson), MICHELIN, PORTS INTERNATIONAL, GIOGRIO ARMANI, SOTHEBY’S, RITZ CARLTON, and FREDDIE MAC. Others are not protected, such as VIAGRA, SONY ERICSSON, DELL, MICHAEL JORDAN, and RANDOM HOUSE. And still others are protected in one case while not protected in another, such as LAFITE.

In June 2015, the Beijing High Court (second instance court) sustained the decisions of the Beijing First Intermediate Court (first instance court) and the Trademark Review and Adjudication Board (TRAB), and held that the opposed mark “FANG DI MEI in Chinese” (FREDDIE MAC in Chinese) constitutes similar to the cited mark “FREDDIE MAC” owned by Federal Home Loan Mortgage Corporation (“Freddie Mac”) in terms of similar services in Class 36. The key issue of this case is the determination of similarity between Chinese equivalent and English mark.

Article 11 of the Chinese Patent Law (2001) generally provides to what extent a patent can be protected under the Chinese law and, on the other hand, what actions are determined to infringe a patent right. Further, a recent court decision by the Supreme People’s Court (SPC) demonstrates that for issues other than those provided in Article 11, the licensing contract shall be the final word on whether an infringement has occurred.

This is the first case for successful enforcement of biological patent in China, which clarifies a feasible definition of new protein patent, i.e. defining homology, origin (species), and function simultaneously. Furthermore, this case provides directions to judgment of future invalidation and infringement cases of new protein patents.

The patentee of this design, Zhiming LI, holds a design patent No. ZL03319125.5, titled “Toothbrush Handle”, which was granted and announced on September 17, 2003. On the same day of the announcement, the patentee authorized Guangdong Sugere Daily Chemicals Co., Ltd. (“Sugere Company” hereinafter, the legal representative of this company is Zhiming LI himself) to make and sell the patented product exclusively.

In patent invalidation or infringement procedures, to prove an uncertain publication date of a prior art or prior design, a plurality of evidences is generally required to form a complete and reliable chain of evidence. Evidence collection and organization usually rely on patent attorneys’ understanding of law and practical experiences. Within a novelty grace period, certain pre-filing disclosures will not cause lose of the novelty of the subsequent patent application. There are rigorous restrictions on such grace period disclosures. It is of vital importance to determine whether a disclosure of an invention-creation before filing can be regarded as a grace period disclosure.

Prior design defense is a very important non-infringement defense system in design patent infringement lawsuits, which allows the People's Court to determine whether an infringement is established simply by determine whether the accused design constitutes similar to the prior design without evaluation of validity of the design patent.[1] This case shows that although a design patent application was submitted before the filing date of the involved patent and published thereafter the filling date (hereinafter referred to as the “earlier design”) does not constitute as prior design. It can be used, however, as the basis for a non-infringement defense by referring to the prior design defense rules, thereby substantially expanding the applicable scope of prior design defense.

In design patent infringement disputes, there is a certain number of copies or imitations across categories. Regarding the problem whether such copy and imitation constitutes infringement, there are different practices among courts. Usually, the question of whether the alleged infringing product and the product incorporating the patent concerned belong to products of identical or similar categories is the prerequisite to whether the alleged infringing product falls into the protection scope of the design patent concerned. Therefore, if the categories of products are neither identical nor similar, a conclusion of non-infringement can be obtained without comparison.

New evidence should be determined according to Article 10 of Interpretation of the Supreme People's Court on Several Issues Concerning Application of the Trial Supervision Procedure of the Civil Procedure Law of the People's Republic of China. Regarding allocation of burden of proof in litigation over infringement of patent process for making non-new products, it may be determined according to the principle of fairness and that of honesty and good faith, taking into consideration such factors as the ability to provide evidence. If the patentee can prove that the product in question is the same as that made by the patent process, and that it has made reasonable effort to prove that the manufacturing process of the product in question falls within the scope of protection of the patent process, using this as a basis and considering the known facts and common experience, it can be presumed that it is very likely that the alleged infringer has used the same process, therefore imposing on the alleged infringer the burden of proof to show that its manufacturing process is different from the patent process.

In determining whether a patent infringement is established based on the doctrine of equivalents (“DOE”), attention should be paid to which feature in a claim is compared against which feature of an accused infringing product. Only those features of a product that are not identical to their counterparts in the claim should be taken into consideration for the purpose of DOE. Determination under DOE is different from the determination on inventiveness during patent prosecution – the requirement of “three substantially, one ordinarily” should be met.

Functional features play important role in the determination of identity or similarity between two designs. When judging whether a design is similar to a prior design, functional features should be considered as “having no influence on the overall visual appearance of a design’s product,” so as to avoid the possible situation of “monopolizing a product’s function on the pretext of protecting a product’s design.”

With reference to new protein inventions, applicants always define biological sequences by the combination of homology and function, so as to obtain a broader scope of protection. However, considering that the association between the primary structure and the function of a protein is highly unpredictable, thus defined protein claim is always considered as not supported by the description and not conforming to Article 26.4 of the Chinese Patent Law. Therefore, discussions in this filed focuses on a proper manner to define a new protein patent and subsequently obtained protection scope. This is the first case for successful enforcement of biological patent in China, which clarifies a feasible definition of new protein patent, i.e. defining homology, origin (species), and function simultaneously. Furthermore, this case provides directions to judgment of future invalidation and infringement cases of new protein patents.

This case clarifies that in the determination of inventiveness of a crystalline compound, the wording “structurally similar compounds” specifically refers to compounds having the same central part or basic ring, and has nothing to do with comparison between microcrystalline structures. The microcrystalline structure difference shall be considered only if it brings unexpected technical effect.

The highlight of this case is the confirmation that generally a close-ended claim of a chemical composition shall be construed as the composition merely consisting of the indicated components, and including no other components but impurities in a normal amount, while adjuvants do not belong to the impurities.

With reference to inventive step of compound claims, it is stipulated in the Guidelines for Patent Examination that for a compound NOT similar in structure to a known compound, it will be regarded as inventive when it has a certain use or effect where a compound that IS similar in structure to a known compound, it might be regarded as inventive only if it has an unexpected use or effect. As can be seen, it is important to judge whether a compound is structurally similar to a known compound. This case clarifies that in the determination of inventiveness of a crystalline compound, the wording “structurally similar compounds” specifically refers to compounds having the same central part or basic ring, and has nothing to do with comparison between microcrystalline structures. The microcrystalline structure difference shall be considered only if it brings unexpected technical effect.

The patentee, HU Xiaoquan, owns a patent for invention No. ZL 200410024515.1, titled "Process for the Preparation of an Injection of Adenosine Disodium Triphosphate and Magnesium Chloride," wherein claim 2 recites the additional technical features, "a freeze-dried powder injection of adenosine disodium triphosphate and magnesium chloride for injection, consisting of adenosine disodium triphosphate and magnesium chloride at the ratio by weight of 100 mg to 32 mg."

This case highlights the premise to admit the post-filing experimental data for determination of inventiveness, i.e. such data should direct to the technical effect described in the original application documents.

The patentee, Takeda Pharmaceutical Co.,Ltd. (hereinafter “Takeda”), owns a invention patent No. ZL96111063.5 titled as “Pharmaceutical Composition for Use in Treatment of Diabetes” (hereinafter “the patent concerned”). Claim 1 was “pharmaceutical composition useful for prophylaxis or treatment of diabetes, diabetic complications, glucose or lipid metabolism disorders, which comprises an insulin sensitivity enhancer selected from pioglitazone or a pharmacologically acceptable salt thereof, and Sulfonylurea as insulin sensitivity enhancers.”

Experimental data is vital to the patentability requirements of inventiveness, support, and enablement for chemical/medical application. During the substantive examination, the applicant may intend to supplement experimental data to support inventiveness after filing, which is called “post-filing experimental data”. It is controversial whether post-filing experimental data shall be admitted. This article discusses admission of post-filing experimental data, as well as the binding effect of examination result in other countries based on analysis on an actual case.

This judgment illustrated that the date when a patent right is declared invalid shall be the decision date of the patent invalidation proceeding.

This case relates to invention patent No. ZL 96107072.2 of the patentee, Qianping AO. After issuance of the patent, the patentee issued a license to Shenzhen DNS Industries Co., Ltd. (“DNS Industries” hereinafter), agreeing that DNS Industries can further permit a third party to exploit the patent in a manner of commissioned processing such as OEM or ODM.

Zhejiang Huali Communication Group Co., Ltd. (hereafter referred to as “Huali Communication”) is the sole and exclusive licensee of a licensing contract for exploitation (in which the patentee does not retain any right to exploit its technology) of an invention patent titled “CDMA/GSM dual-mode mobile communication method and communication device thereof” with Patent No. ZL02101734.4 (hereafter referred to as “the involved patent”).

Examination Decision No. 19631, which is related to the validity of patent No. ZL95190642.9, titled “Shaving Apparatus”, is the first decision that involves the petitioner withdrew the invalidation request and the examination of the request for invalidation was not terminated. This is the PRB’s first application of the principle of conducting examinations ex officio under Rule 72.2.

The principle of prior art defense established in patent infringement litigation means that the scope of protection of a patent right shall not encompass the prior art. The rationale of the principle is that the public have the right to freely practice the prior art known to the public, and no one is entitled to claim the prior art into the scope of an exclusive patent right, or else the public interest will be damaged. In addition to examining the legal validity of the patent right in the patent invalidation procedure, examining an accused infringer’s assertion of the prior art defense in the patent infringement litigation is advantageous for timely resolving disputes, reducing litigation exhaustion of the parties, and realizing unification of equity and efficiency. The prior art defense and its difference from determination of novelty judgment or inventiveness in the patent invalidation procedure are articulated in this case, which facilitate the parties’ understanding the standards of application of the prior art defense by the courts in China.

As prescribed in the Chinese Trademark Law, application for registration of a trademark shall not create any prejudice to another person’s prior right, which includes prior copyright. Prior copyright is considered as an important aspect in trademark disputes with various advantages to claim against the disputed trademark, such as automatic protection without registration, cross-jurisdiction protection and cross-Class protection.

A technical solution refers to a collection of technical means that are adopted to solve a technical problem and utilize the laws of nature. Generally, a technical means is embodied by one or more technical features. When an invention-creation, especially inventiveness of a claim, is evaluated, usually a standard three-step method is adopted. However, there is a deviation that an invention-creation is NOT evaluated as an organic whole and a claim is divided as several fragmented parts and the respective parts are evaluated separately. However, such kind of evaluation is inappropriate. In this case, the Supreme People’s Court emphasized that an invention-creation should be evaluated as a whole.

The usage environment feature refers to a technical feature for describing the environment or conditions under which an invention is applied. The usage environment feature included in a claim is a part of the essential technical features of the claim, contributes to define the protection scope of the claim, and thus shall be considered when determining the protection scope of the claim.

On October 15, 2014, Rule 14 of the Provisions of the Supreme People’s Court (SPC) on Several Issues concerning the Trial of Administrative Cases Involving the Granting and Determination of Trademark Right (Draft for Comment) was released by the SPC with two different opinions regarding the weight of evidence of trademark registration certificate and trademark gazette in determining copyright ownership. The first opinion provides that, “trademark gazette, trademark registration certificate, etc. may serve as prima facie evidence to ascertain the copyright owner or the interested party thereof. Where the applicant of the disputed trademark opposes, that applicant has the burden to provide counter evidence to support his opposition.”

According to Article 61, Paragraph 1 of the Chinese Patent Law (2009), a patentee may choose to shift its burden of proof for infringing process to the defendant when the patented process is for obtaining new product. However, to take use of such convenience, the patentee has to satisfy some preconditions. This case illustrates that the patentee have to submit preliminary evidence regarding “new product.” Based on this case, this article will discuss all the preconditions for application of Article 61, Paragraph 1 with an overview.

The patentee Manfred A. A. Lupke (hereinafter referred to as “Lupke”) owning an invention patent No. ZL95192937.2 brought a lawsuit before the Tianjin Intermediate People’s Court against Weifang Zhongyun Machine Co.,Ltd. (hereinafter referred to as “Zhongyun Machine”) as the producer of a corrugated pipe manufacturing equipment, and Tianjin Shengxiang Plastic Pipe Industry Co., Ltd. (hereinafter referred to as “Shengxiang Industry”) as the user of the equipments, alleging that the corrugated pipe manufacturing equipment produced by Zhongyun Machine has infringed the patent.

The latter half of Article 32 of the Chinese Trademark Law 2013 (Article 31 of the Chinese Trademark Law 2001) stipulates that“ preemptive registration by unfair means of a trademark with certain fame already used by another party” shall not be approved (“Bad Faith Filing Provision”). From the literal understanding of such provision, the fame of the trademark with prior use and the bad faith of the applicant of the disputed trademark are two requirements for application of law for the Bad Faith Filing Provision.

A method patent is different from a product patent in that it protects a dynamic operation process. How to compare between the method used by the defendant and the patented process is a key point when the court tries an infringement case involving a process patent. In this case, by finding the technical feature difference of the products, the court held that the two processes are neither identical nor equivalent and thus the defendant does not infringe upon the plaintiff’s patent. This shows a new way for judging infringement upon a process patent.

The Interpretation of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Patent Infringement Dispute Cases stipulates, in Rule 6, “where the applicant or patent right owner abandons a technical solution through amendments to the claims and/or specification or observations during the prosecution of the application or the invalidation proceedings of the patent, the court shall not support the right owner’s claim of reclaiming the abandoned technical solution back into the protection scope in the infringement litigation case.” Therefore, application of the DOE is premised with a condition that the right owner has abandoned the technical solution through amendments or observations during the patent prosecution or invalidation proceedings.

An equivalent feature is a feature that, as compared to the feature described in a claim, performs substantially the same function by substantially the same means, produces substantially the same effect, and can be associated by an ordinary person skilled in the art without any inventive work. While determining whether a prosecuted product falls within equivalent infringement, the means, function, effect, and inventive work should be determined in the above order. Only when all four elements of a feature meet the above conditions, the feature can be determined as an equivalent feature.

When determining whether an infringement is established by employing the equivalent doctrine, it is necessary to compare technical features of an involved patent with those of an alleged infringing product, so division of technical features will influence determination of an equivalent feature. In this case, the Supreme People’s Court suggests that for division of technical features of a claim, a technical unit that is able to implement a relatively independent technical function generally should be considered as one technical feature, and it should not designate multiple technical units that implement different technical functions as one technical feature.

The case relates to an infringement dispute between Patentee, Wanqing BAI, and Chengdu Nanxun Marketing Service Center (hereinafter referred to as “Nanxun Center”), Shanghai Tianxiang Industry Co.,Ltd. (hereinafter referred to as “Tianxiang Industry”).

The patentee, Zhaoqing New Leader Battery Industry Co.,Ltd. et.al.(“New Leader Battery” hereinafter), has a utility model patent No. ZL01234722.1 titled “Mercury-free Alkaline Button Cell Battery.” The involved patent underwent three rounds of invalidation after the date of authorization proclamation. Finally, the Patent Reexamination Board (the “PRB” hereinafter) made the No. 13560 decision on the request for invalidation (hereinafter referred to as the invalidation decision) on June 9, 2008 declaring that all claims of the involved patent are invalidated. In the subsequent administrative litigation, both the court of first instance and second instance judged that the invalidation decision should be reversed.

Xi’an Qinbang Telecommunication Material Co.,Ltd. (hereinafter referred to as “Qinbang”) is the patentee of Chinese Invention Patent No. ZL01106788.8 titled “Method for Manufacturing Smooth Metal-shield Composite Belt.” Qinbang brought a patent infringement lawsuit to the Xi’an Intermediate People’s Court against three defendants including Wuxi Longsheng Cable Material Factory (hereinafter referred to as “Longsheng Factory”) and other two entities, claiming monetary damages and injunctions.

Claim interpretation is the key to determine the scope of protection of claims. The meaning of the claims can be determined based on internal and external evidence using a variety of interpretation methods, wherein the methods of interpretation can verify each other, eliminating contradictory, uncertain or ambiguous conclusions in order to obtain reasonable and accurate protection scope of the claims.

The judge held in this case that, if, by looking into the nature and degree of the typing mistakes, the person skilled in the art can naturally identify the typing mistakes and appreciate the corrected meaning of the typing mistakes, the typing mistakes shall be interpreted in a corrected manner. Consequently, negative effect of the typing mistakes on validity of valuable patents can be reduced, especially in the current circumstance where there exists no post-grant correction procedure for correcting typos and other clerk errors.

The judge proposed an important principle for claim construction in this case, holding that the claim construction should comply with the purpose of invention described in the detailed description of the patent application.

With China’s rapid economic developments, the relevance of similar goods and services changes with the method of commercial trading, consumption habit, and consumer psychology. However, the Classification of Similar Goods and Services may not include all the goods and services, and there are often contradictions when determine whether goods and services are similar or not. There is a new trend that the Chinese Trademark Office (CTMO), the Trademark Review and Adjudication Board (TRAB), and the courts begin to grant cross-class protection by deeming goods and services similar.

Avago Technologies General IP (Singapore) Pte. Ltd. (hereinafter referred to as “Avago”), successfully obtained registration for its core trademark (A Logo) (Registration No. 5226289, red color designated) in China in January 2010.
The application for registration of the A Logo was filed in the name of Argos Acquisition Pte. Ltd. (hereinafter referred to as “Argos”) in 2006 (the A Logo was later assigned to Avago in 2009). In 2008, the A Logo was rejected by the Chinese Trademark Office (CTMO) on the ground that it shall be deemed similar to the prior registered trademark (International Registration No. 789052) in terms of similar goods. Avago filed a rejection appeal before the TRAB.

Original Equipment Manufacturer, commonly known as “OEM,” is and will continue to be a huge business in China. Whether OEM constitutes trademark infringement is of great practical significance to foreign companies whose manufacturing bases are in China, and the issue has always been the subject of hot debates. In OEM business, a local Chinese company manufactures the products on behalf of a foreign brand owner with the foreign brand owner’s trademark, but the products are solely for export and not sold in China.

In April 2014, the Supreme People’s Court (SPC) announced the list for China Courts 2013 Top 10 Innovative IP Cases. These Top 10 Innovative IP Cases were selected from over one hundred thousand (100,000) decisions of nationwide courts in China rendered in 2013, which have significant and innovative contribution to application of the laws and regulations.

In the recent practice, the famous carmaker Tesla Motors, Inc. filed two civil lawsuits in China in September 2013 before Beijing Third Intermediate Court, against ZHAN Bao Sheng. ZHAN is the registrant of the disputed trademark of the “TESLA TESLA MOTORS and T Design” in China, where Tesla Motors, Inc. has filed disputed cancellations before the Trademark Review and Adjudication Board (TRAB) as well. In one of the civil lawsuits, Tesla Motors, Inc.

Since the implementation of the Chinese Trademark Law 2001, the courts (the Beijing First Intermediate Court as the first instance court and the Beijing High Court as the second instance court) have been granted the final adjudication power for administrative cases involving the authorization and confirmation of trademark rights (hereinafter referred to as “Trademark Administrative Cases”), where interested parties sued the Trademark Review and Adjudication Board (TRAB) to court in connection with its administrative decisions in trademark rejection review, trademark dispute, and trademark cancellation review.

The cases of three-year non-use trademark cancellation have been on the rise in the recent years and have attracted more and more attention. However, as to some special circumstances (such as the trademark obtaining registration after the opposition procedure and the international trademark registration designating China for territorial extension), the registration date (the date when the exclusive right to use a trademark is granted) may probably be inconsistent with the date when the registration status has been confirmed (the date when the trademark administration or judicial authority finally determines and grants the trademark right).

The earliest Chinese regulations with regard to “examination on the disclaimer to the exclusive right to use the trademark” appeared in Trademark Examination Rules, which was promulgated by the Chinese Trademark Office (CTMO) in 1994. Rules 3 and 4 of the CTMO Notice on Issues concerning Trademark Examination Notification [Shang Biao (2000) No. 80] further stipulated the specific circumstances where the exclusive right to use the trademark should be disclaimed.

In April 2012, the Trademark Review and Adjudication Board (TRAB) announced the latest list of well-known trademarks recognized in China, including “Sina & design, Sina, SINA NET in Chinese,” and “SOHU in Chinese.” Up to date, around ten trademarks have been recognized as well-known in the Internet industry in China.

The newly revised Chinese Trademark Law 2013 adopts Article 58 which prescribes as follows: “Where the registered trademark or unregistered well-known trademark of others is used as a trade name contained in the enterprise name, which is likely to mislead the public and constitutes unfair competition, it shall be adjudicated under the Chinese Anti-Unfair Competition Law.”

In February 2013, the Supreme People’s Court (SPC) rendered a decision [The SPC Administrative Order (2012) Zhi Xing Zi No. 9] (the SPC No. 9 Order) on the re-trial case of the trademark “Duck King in Chinese” filed by Shanghai Huai Hai Duck King Roast Duck Restaurant Co., Ltd. (previously named as Shanghai Huai Hai Quanjude Roast Duck Restaurant Co., Ltd., hereinafter as “Shanghai Duck King”).

More and more multinational companies (MNCs) are realising that, as an indispensable part of a global IP strategy, importance of successfully enforcing IP right in China cannot be overstressed. Besides administrative remedy, initiating IP infringement lawsuit in China is widely considered as a feasible yet challenging measure for enforcing IP rights.

This article is the English translation for Mr. Wang’s article in Chinese published on China Trademark magazine (Issue 3, 2011). China Trademark magazine is sponsored by China Trademark Association under supervision of the State Administration for Industry and Commerce (SAIC) overseeing the Chinese Trademark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB).

The DUCK KING trademark re-trial is listed as No. 7 of China 2013 Top 10 Innovative IP Cases (published by the Supreme People’s Court on April 21, 2014).
The English translation below [CASE BRIEF and INNOVATIVE SIGNIFICANCE] is prepared by Beijing East IP Law Firm for reference merely, based on Chinese Language Version published by the Supreme People’s Court. Beijing East IP Law Firm also provides comments and analysis on this case.

Article 31 of the Chinese Trademark Law states that “using unfair means to preemptively register the trademark of some reputation of another person has used” shall not be registered.　According to the provision’s language, fame of the prior mark and the bad faith of the trademark applicant are the two applicable elements of the bad faith filing prescribed by Article 31.

On March 17, 2014, the State Intellectual Property Office (SIPO) issued Order No. 68. Under this Order, graphic user interface (GUI) is becoming eligible for design patent protection as of May 1, 2014.

Since the reform and opening-up in 1978, China has seen huge increase of foreign direct investment. More and more foreign companies have set up their R&D centers in China, hence making more and more invention-creations therein.

As a famous luxury hotel band around the world, the RITZ-CARLTON mark owned by Ritz-Carlton hotel was recognized by China court recently. Both the trial court (Beijing First Intermediate Court) and the appellate court (Beijing High Court) overruled the decision of the Trademark Review and Adjudication Board (TRAB), and recognized the RITZ-CARLTON mark on hotel services and restaurant services as a well-known mark.

China is becoming an arena of significant importance where companies are taking advantage of patent portfolios against competitors. According to “2012 Intellectual Property Rights Protection in China” issued by State Intellectual Property Office of China, in 2012, local people’s courts around China accepted 9,680 patent civil cases, with year-on-year increase of 23.80%.

This "Guidance on Hearing Rewards or Remunerations Disputes of Service Invention Made by an Employee-Inventor or Designer" was promulgated by IP tribunal of Shanghai High People’s Court in June, 2013.

On August 30, 2013, China National People’s Congress enacted the amended the Chinese Trademark Law, and the new Chinese Trademark Law shall come into effect as of May 1, 2014. The current Chinese Trademark Law was enacted in 1982, and amended in 1993 and 2001 respectively. In December 2012, June 2013 and August 2013 respectively, the National People’s Congress has reviewed the draft amendments of the Chinese Trademark Law three times. We have sorted out the key amendments of new Chinese Trademark Law. Please see below the brief.

The Supreme Court held that “as long as the content inferred directly and unambiguously from the original disclosure is obvious to the person skilled in the art, such content belongs to the original disclosure of the filing document under Article 33 of the Chinese Patent Law.”

The proposed 4th amendment aims to strengthen the protection of patent rights, which is a good news to applicants.
However, instead of improving current patent enforcement related proceedings via judicial route, the current draft tends to achieve the above goal via administrative route by granting more power to the administrative organ (local patent bureau), which causes concerns from overseas clients, and judicial system oppositions.

Foreign applicants are very interested in how to claim priority when they want to file a Chinese design application. We will introduce some relevant issues about foreign priority.

China has overtaken America again. Its patent office received more applications than any other country’s in 2011. (The numbers were released in December.) But look closer, and the picture is murkier.

Business method application cannot be granted a patent right before the SIPO, unless you are very careful at the very beginning of drafting an application, fully understand the special tactics during prosecution of the application, and foresee the direction SIPO is heading regarding examination of a business method application.

The SIPO is coming up with the Draft of Service Invention Regulation aiming for protecting the right of a service inventor for claiming reward when the application is filed and remunerations when an application is patent granted and/or practiced from which the applicant obtains benefit.

The SIPO is proposing to amend relevant regulations in the Patent Examination Guideline to protect partial design/UI with design patent.