International brands seeing more success in China's IP Courts according to recent report
The first report into the work of the Beijing Intellectual Property ('IP') Court ('the Court') has confirmed high demand and increased success, particularly amongst international users. This will be noted with interest by many global brands, particularly those who have previously litigated in China (with varying success) such as Lego, Moncler, Michael Jordan and Apple.
The Court was the first of three specialist Chinese courts set up in November 2014 (its sister courts are in Guangzhou and Shanghai) to deal with IP matters and in particular it hears appeals against the decisions of the Trademark Review and Adjudication Board ('TRAB') and the Trademark Office of the State Administration of Industry and Commerce (SAIC), China’s trade mark-issuing agency.
In China if the SAIC rejects a trade mark application, or accepts a third party’s opposition, cancels or invalidates a trade mark, the IP rights holder is able to request a review of the decision by the TRAB. The TRAB’s decision in turn can be appealed to the civil courts in China.
The annual number of TRAB appeals has increased significantly since the inception of the Court with a total of 4,108 rulings being made in 2015. Interestingly, 766 (approx. 19%) were reversals of the TRAB decisions and almost half of these rulings related to parties from outside of China, including Hong Kong, Macau and Taiwan ('Non-Residents').
These figures show a higher success rate than in previous years for Non-Residents in relation to reversals of TRAB decisions. Between 2011 and 2015, 19.72% of cases brought by non-resident parties concluded with a successful reversal of the TRAB decision.
Of all cases dealt with by the Court in its first year, 22% of these involved Non-Residents. A significant proportion of these cases (36%) featured parties from the USA. This is a significantly higher number than any other country.
Apple is currently awaiting a decision of the Court in relation to a patent infringement claim made against it in respect of the iPhone 6 and iPhone 6 Plus. Parties in Germany (the second most active user of the Court) only initiated 13% of cases whereas only 9% of the cases involving Non-Residents related to UK parties.
Whilst it is too soon to gauge real success, this report indicates that the use of the Courts by Non-Residents is increasing and Non-Residents are succeeding. This appears to be a positive step towards dispelling the perception amongst international rights' holders of local bias in the Court (and its sister courts) and encouraging Non-Residents to take steps to protect their IP rights in China.
The report was prepared by Beijing IPHOUSE Network Technology Co., Ltd., the English translation of the report, courtesy of Beijing East IP Law Firm, can be viewed here.