On October 21,2021, the President of the Supreme People's Court of China, Justice Zhou Qiang, submitted the Report of the Supreme People's Court on the Work of the People's Courts on Intellectual Property Rights Trials to the Chinese People's Congress. The report is very detailed, and the relevant contents of the report are summarized as follows.

Data disclosure

  • The number of first instance cases of intellectual property received by courts nationwide increased from 101,000 in 2013 to 467,000 in 2020, an average annual increase of 24.5%, reflecting a significant increase in demand for intellectual property protection for high-quality economic and social development.

  • Formulated 19 judicial interpretations, 11 judicial policy documents and issued 30 guiding cases on the protection of intellectual property rights between 2013 to 2021.

  • Increased penalties. For instance, in the case of "Vanillin" technical secret infringement, the plaintiff was awarded RMB 159 million in damages on February 19,2021, the highest record so far a trade secret case in China.

In general, Chinese courts have recognized the significant economic value of IPR protection and have significantly increased the amount of damages to raise the cost of infringement. At the same time, the Supreme Court has attempted to unify  judicial views of local courts by issuing judicial documents to avoid conflicting decisions. Therefore, we will be cautiously optimistic about IPR protection in China.

Strengthen protection of innovation, serving innovation-driven development

  • Protect patents of science and technology innovation in accordance with law

    The Supreme People's Court has formulated guiding opinions and issued judicial interpretations for administrative cases on patent authorization and confirmation as well as patent infringement disputes. The Court has also introduced judicial interpretation to not only implementing drug patent linkage system but also to adjudicated on a volume of high-tech cases properly, involving 5G communications, biomedicine, high-end equipment manufacturing, as well as new materials and energy.

  • Protect legitimate interests of science and technology innovation entities in accordance with law

    Be able to handle those disputes arising from the identification of the ownership of achievements, the transfer of rights, and the distribution of benefits properly. Support the program of conferring the ownership or rights of long-term use of job-related scientific and technological achievements on scientific researchers. Guaranteeing the rights of service inventors while hearing cases involving service invention rewards and remuneration disputes.

  • Strengthen the protection of agricultural science and technology innovation

    The Supreme Court has Issued opinions on comprehensively promoting rural revitalization and also formulated judicial interpretations for rights in new variety of plants. In order to protect the plantation industry, the court set up a cooperation mechanism with the Ministry of Agriculture and Rural Affairs.

Strengthen protection of fair competition, optimizing market environment with adherence to rule of law in markets

  • Strengthen anti-monopoly adjudication

    The People’s Court has adjudicated on cases of monopoly involving the livelihood of people such as biomedicine, telecommunications services, and cultural consumption, as well as monopoly disputes between Qihoo and Tencent. The Court resoundingly disciplines monopoly agreements, abuse of market dominance, and Internet monopoly behaviors etc.

  • Prohibit unfair competition practices

    The People's Court has adjudicated on practices of unfair competitions on e-commerce platforms and has sanctioned against malicious confusion and misleading behavior in AI product markets.

  • Strengthen judicial protection of trade secrets

    The Supreme People's Court has issued judicial interpretations of trade secrets and clarified specific measures to protect trade secrets in litigation. The Court has adjudicated on cases of trade secrets infringement by former employees and cases of divulging and lowering the base price limit on bids.

  • Regulate trademark registration practices

    The Supreme People's Court has issued judicial interpretations for trademark authorization and confirmation. The Court resoundingly prohibits malicious preemptive registration and hoarding of trademarks, and enhances judicial protection of well-known trademarks.

Strengthen protection of intellectual property rights in emerging fields, guiding sound development of new fields and new business forms

  • Explore regulations of intellectual property protection in emerging fields

    The People's Court has adjudicated on copyrights of AI-generated articles and audiobooks, patents, and intellectual property rights of securities and financial information.

  • Promote the durable healthy development of platform economy

    The Supreme People's Court has issued guiding opinions on civil cases involving intellectual property rights on E-commerce Platforms. The Court has adjudicated on unfair competition of data rights in group control software, and resoundingly sanctions against excessive harvest and use of personal information as well as price discrimination or fraud through algorithms.

Future measurements and recommendations

  • Attentively improve the capacity of intellectual property adjudication

    The People's Court will improve the judicial protection system of intellectual property, further protecting patent, copyrights, trademark rights, and traditional culture and Chinese medicine’s intellectual property rights etc.

  • Purposefully promote and improve the Great Protection Paradigm of intellectual property

    The People's Court will strengthen the connection mechanism between judicial trials and administrative enforcement of law, improving pluralistic dispute resolution system, enhancing construction on credit system of intellectual property litigation, and leveraging the deterrence function of legal penalties.

Coping strategies for companies

Firstly, in view of the attitude of Chinese courts towards continuously strengthening protection of intellectual property rights, international companies can feel more comfortable about bringing enforcement actions in China where necessary while at the same time, they should be more vigilant on the defensive side as well for risk management.

Secondly, agricultural IPR protection will become a new focus for Chinese courts which should be encouraging to agricultural companies.

Finally, innovative pharmaceutical companies should try to take advantage of the newly introduced patent linkage system to safeguard their legitimate interests against those generic drug manufacturers.