10 November 2014

China establishes specialised intellectual property courts

China is often criticised for its lack of protection for intellectual property rights. At the same time, Chinese companies account for a significant portion of intellectual property applications worldwide. To strengthen the legal protection of intellectual property rights at home, the Chinese government recently passed legislation establishing specialised courts. Although it will remain a significant challenge for foreign companies to enforce their intellectual property rights in China, specialised courts are an important step in the right direction.

The exponential growth of intellectual property (IP) registrations by Chinese companies in recent years, as promoted by the Chinese government, has led to a corresponding increase in IP-related disputes. To improve dispute resolution, the Standing Committee of the National People’s Congress of China passed legislation on 31 August 2014 establishing specialised IP courts in Shanghai, Beijing and Guangzhou. It is not yet clear when the courts will become operational.

Once established, the IP courts will have exclusive jurisdiction in first instance over civil and administrative cases in their respective localities relating to patents, plant varieties, integrated circuit layout designs and technological know-how. The IP courts will also act as courts of appeal for appeals against judgments from the Basic People’s Courts on copyrights, trademarks and other intellectual property rights. Appeals against judgments from the IP courts are to be made before the High People’s Court of the locality where the IP court is located.

The establishment of IP courts is a welcome step towards better IP protection in China. Well-functioning IP courts would form an important step in improving the quality of IP court rulings, and could improve the protection of IP rights, which is often provided for in legislation, but not in practice. That in turn might make foreign companies less reluctant to invest in IP-intense businesses and products in China. However, these courts will still have to prove that effective IP protection is possible in China, which is why the developments will be monitored closely internationally.