Life Sciences & Healthcare Newsletter: Hong Kong & China update - November 2018

Three years after the setting up of Specialized Intellectual Property Courts in Beijing, Shanghai and Guangzhou, China decided to further consolidate the patent system and reroute all appeals of technology-related IP cases to the Supreme People's Court in Beijing. This is yet another move to streamline its IP protection system further. The reform will take effect on 1 January 2019. It signifies that patent dispute is, in China, a matter of national significance.

First instance technology-related IP cases (e.g. patent cases) are typically heard by the specialized IP courts or the IP tribunals of local intermediate courts. If the amount in dispute exceeds RMB 100 million and has a foreign party, typically the Higher People's Court would have jurisdiction. Before the reform, parties appeal against the trial decision to the local Higher People's Court if the first instance Court is at intermediate level, or appeal to the Supreme People's Court if the first instance trial starts at the Higher level. A request for review or permission to retrial can be further filed before the Supreme People's Court ("SPC") if a party are not happy with the appeal decision.

This framework is now changed by the implementation of the "Decision on several issues regarding the litigation procedures for patent related cases". The Decision was passed during the 6th Session of the 13th Standing Committee of the National People's Congress ("NPC") On 26 October 2018. It provides that the SPC will have jurisdiction over the following technology-related IP cases:

1. Appeal cases against the first instance civil litigation decisions regarding invention patent, utility model, new variety of plant, integrated circuit layout, technology secret, computer software and anti-monopoly behaviours;

2. Appeal cases against the first instance administrative litigation decisions regarding patent (including invention patent, utility model and design patent), new variety of plant, integrated circuit layout, technology secret, computer software and anti-monopoly behaviours;

3. If the first instance decisions mentioned in the above (1) and (2) have come into force without a second instance appeal, parties can also apply for a retrial before the SPC. The SPC will hear the retrial by itself or order the lower level court to handle the retrial of the case.

As explained by the Chief Justice of SPC, Judge Zhou Qiang, the reform aims to ensure consistency in judging criteria and unify application of laws on technology-related IP cases, so as to further encourage and protect innovation and create a fair business environment.

The Decision will be implemented since 1 January 2019. At present, the SPC is working with the relevant departments to set up the system and the detailed implementation rules. Though it has not been officially announced yet, it is understood that a specialised tribunal would be established under the current structure of SPC in Beijing. The SPC IP Appeal Tribunal's decisions can still be subject to retrial by SPC, but different judge panel would be formed to hear the retrial cases.