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The Improvement of Intellectual Property Arbitration, Mediation, and Court Procedures in the Shanghai Pilot Free Trade Zone
By Zhang Taolue and Zhang Weijun﹡
Preface: The Objectives and Background of the Research 2
I. The objectives of the research 2
II. The background of the research 2
Part one The Improvement of ADR Mechanisms for IP Dispute Resolution in Shanghai FTZ 4
I. The deficiencies of the current ADR mechanisms especially arbitration system 4
II. The ongoing reform on ADR mechanisms in Shanghai FTZ 5
III. The suggestion to improve the mechanisms of ADR in Shanghai FTZ 7
Part Two The Improvement of IP Judicial Procedure in Shanghai FTZ 9
I. Calls for improving IP judicial procedure in China 9
II. Status quo of the rules of evidence in IP litigations and mechanisms for enforcing court orders and judgments in China 11
1. The access to evidence 11
2. The admissibility of the evidence 17
3. Mechanisms for enforcement of court orders and decisions 19
III. Proposals to further improve the IP Judicial Proceedings in Shanghai FTA 20
1. Evidence Discovery 21
2. Admissibility of Evidence 22
3. Enforcement of court orders and decisions 22
Preface: The Objectives and Background of the Research
I. The objectives of the research
This research aims to provide useful advice for the improvement of Intellectual Property Right (IPR) protection mechanism in the Shanghai Pilot Free Trade Zone (Shanghai FTZ). It focuses on two questions:
1. How to improve the private arbitration and mediation institution and offer a better mechanism of alternative dispute resolution (ADR) for IPR in FTZ?
2. How to further refine judicial proceedings of IPR protection in Shanghai FTZ from the perspective of rules of evidence and the enforcement mechanism for court orders or judgments?
II. The background of the research
This research and its conclusion based on the following background:
1. Enhancing IP protection has been the administrative idea of Chinese government.
Since China participating in World Trade Organization and IP playing more and more important role in Chinese economy, it has gradually became the administrative idea of Chinese government to protect IPR and promote the development of creative economy. Early in 2008, the State Council issued The Outline of National Intellectual Property Right Strategy which proposes to further improving IP legal environment, strengthen IP protection , and to amend laws on penalization against IP infringement; aggravate judicial punishment against IPR infringement; enhance IP holder’s awareness and ability of enforcing IPR; reduce the cost of enforce IPR and rise the price to commit infringement .
And with Chinese economy being in New Normal condition, it become urgent for China to transform the traditional way of economic growth into way of innovation-driven, which also requires China to take further measures in IP protection. The 18th Session of China Communist Party Congress in 2012 reiterated that China would implement its national IP strategy and strengthen the utilization and protection of IP. The Government Work Report of 2015 stressed to deeply implement the action plan of IP strategy, firmly fight against IP infringement acts and effectively protect the invention and creation. In response, reform on IPR protection system has been constantly carried forward in China in recent years. Since 2008, China has respectively amended Patent Law, Copyright Law and Trademark Law. Recently, China has started a new round of revision on Patent Law and Copyright Law to reinforce IP enforcement and enhance IP protection.
2. Free Trade Zone is the test field of advancing the reform of IP protection mechanisms
Another remarkable progress has been made is that China established 4 Pilot FTZs in Shanghai, Tianjin, Guangdong, and Fujian to carry forward reforms including IP-related mechanisms. Taking Shanghai FTZ as an example, the State Council issued the Framework Plan on China (Shanghai) Pilot Free Trade Zone on September 18th, 2013, which proposed to set up a comprehensive law enforcement system concerning IPR and establish mediation, aid and other mechanisms to settle IP disputes. The Administrative Measures of the Shanghai Pilot Free Trade Zone issued by Shanghai government on September 20, 2013, grants the Management Committee of Shanghai FTZ responsibilities for matters such as: (1) enhancing IP protection, (2) supporting professional institutions to provide alternative dispute resolution for IP disputes, and (3) supervising the joint administrative enforcement of IPR.
Under such background, on September 26, 2014, the IP bureau of Management Committee of Shanghai FTZ was founded in Shanghai Waigaoqiao FTZ to practice, inter alia, the three-in-one model, i.e. a unitary administrative enforcement system regarding to patent, trademark and copyright. In 2013 November, a FTZ Court was established in Shanghai Pudong New Distract and on April 9, 2015, specialized IP tribunal was set up to hear IP cases and explore the reform of IP judicial enforcement in Shanghai FTZ.
The further plan on deepening reform of China (Shanghai) Pilot Free Trade Zone issued by the State Council on April 8, 2015, puts forward that one of the main tasks of Shanghai FTZ is to accelerate the transformation of government functions and boost innovation on rights protection mechanism. The measures to be taken includes: (1) improving administration and enforcement mechanisms of IPR, improving the ADR mechanisms such as administrative supervision, arbitration, and the third party meditation, improving mechanisms of social participation regarding IP issue; (2) improving the environment for developing IP, gathering international IP resources and expediting turning Shanghai into an IP center of Asia-Pacific; (3) furthering conforming to international practice of resolving IP disputes, optimizing the arbitration rules of Shanghai FTZ, supporting the settlement of world-known business disputes resolution institution in Shanghai FTZ; (4) exploring to set up a national wide FTZ arbitration legal service alliance and a mechanism of communication and cooperation among arbitration institutions of Asia-Pacific.
3. The IP litigation explosion in Cities like Shanghai
At present, the litigation number of IP cases in China is enormous. In 2014, the nationwide district courts totally accepted 95,522 and concluded 94501 IP cases . Due to owning relatively high quality judicial resources, cities like Beijing, Shanghai, Guangzhou, absorb a large amount of IP cases all over the country. Taking Shanghai as an example, in 2014, Shanghai accepted 7,849 IP cases, which accounts for 8.21% of nationwide and concluded IP 7620 cases which accounts for 8.06% of nationwide. By the end of 2014, there were still 1384 non-concluded IP cases. The ratio of total IP cases accepted and concluded cases in 2014 both went up nearly 20% than that in 2013 . Compared with this, there is a marked shortage of IP judges in Shanghai. During the same period, there are only 75 IP judges in Shanghai, among which 45 IP judges in six gross-root courts, 21 IP judges in two Intermediate courts, 9 IP judges in SH High People’s Court. Averagely, each IP judges in gross-root courts had to take care more than 110 IP cases in 2014. Under the current trend, it is reasonable to predict that the workload of IP court judges in Shanghai FTZ will continue to increase. Too much workload for a judge is not only one of the reasons of recent wave of judge’s resignation, but also affects the quality and efficiency of resolving IP disputes.
IP Cases Accepted and Concluded by Shanghai Courts in Year 2014 and the 1st Quarter Of 2015
