On 26 October 2018, China approved the Decision of the Standing Committee of the National People's Congress on Several Issues Concerning the Litigation Procedures in Patents and Other Intellectual Property Cases ("Decision") which fundamentally changes how the appeal process will work for certain technical Intellectual Property (IP) disputes.
Currently, the Supreme People's Court, as the highest court in China, will only hear IP cases as a final route of appeal. Generally speaking, technical IP first instance cases are heard before Intermediate People's Courts and/or Specialist IP Courts. Appeals from the Intermediate People's Courts and/or Specialist IP Courts are heard at Provincial level High Courts; and the case will only be allowed to go to before the Supreme People's Court if a further appeal is allowed. However, the Decision has changed the existing procedure by implementing a new regime that will permit the Supreme People's Court to hear appeals from first instance civil cases in relation to technical IP disputes including invention patents and utility models, new plant varieties, integrated circuit layout designs, technical trade secrets and computer software copyright. The Decision takes effect on 1 January 2019.
The precise detail of the new regime has not yet been set out. However, it is understood that relevant appeal cases will be heard by intellectual property tribunals formed within the Supreme People's Court; and judgments from these tribunals will be second instance decisions. If relevant parties are not satisfied with these second instance judgments, they will be permitted to apply to the Supreme People's Court for a full retrial.
What does this mean for foreign IP litigants in China?
On the downside, the implementation of the Decision might lengthen the litigation process given the high number of appeals which are currently heard at many different Provincial High Courts. Inevitably, the centralising of appeal courts to a single venue will put great strain on the efficiency of the court unless it is structured in such a way to address this potential issue. In addition, it is disappointing that design patents are not included in the jurisdiction of the new second instance tribunal.
Despite this, overall, the development should be good news for foreign IP litigants in China. Placing technical appeals from first instance courts into the control of a single sophisticated tribunal such as the Supreme People's Court should increase the sophistication, neutrality and consistency of appeal decisions. This move is in line with the recent development of centralising first instance IP cases with the introduction of 15 new IP courts to the existing specialist IP courts in Beijing, Shanghai and Guangzhou. It will be interesting to see how this new development evolves but it appears to be another positive step forward in China's IP litigation landscape.