China’s Supreme Court Issued Guidelines on Implementing the National IP Strategy

China's Supreme Court issued Guidelines on Implementing the National Intellectual Property Strategy ("the Guidelines") on March 29, 2009 to require people’s courts of various levels to fully implement the National IP Strategy.  Promulgated by China’s State Council on June 5, 2008, the National IP Strategy is a roadmap to lead China to become one of the world's most innovative countries by 2020. 

Some key points of the Guidelines are summarized below:

• The Guidelines urge Chinese courts to fully exercise their judicial functions in IP cases and strengthen judicial protection of IP rights.  The courts may use a variety of legal remedies to provide a full scope of IP protection.  In particular, damage awards should be emphasized in deterring infringement and providing remedy to the rights holder.  Aggravated damage awards should be imposed in severe cases such as willful infringement, repeated infringement and large-scale infringement cases. 
• The Guidelines suggest that a “case law system” tailored for application under the Chinese legal structure be established to provide guidance to court decisions, clarify application standards of relevant IP laws and reduce inconsistency in decisions by different courts.  Furthermore, trial processes should be open to public observation and court decisions should be published to make the litigation process more transparent. 
• In deciding IP cases, the courts should seek a balance between protecting IP rights and preventing abuse of IP rights.  On one hand, violation of IP rights should be severely punished, cost for IP rights enforcement should be reduced and stakes for IP infringement should be increased.  On the other hand, the courts should adequately consider defenses against infringement that include prior right, prior use, existing technology, prosecution history estoppel and reasonable use, and that prevent illegal monopoly. 
• The Guidelines set forth legal principles and critical issues to be considered in 16 different types of IP infringement cases, including, for example, cases involving patents, trademarks, copyrights, trade secrets, new plant varieties, unfair competition, antitrust and IP-related contracts.  (On April 21, 2009, the Supreme Court released the Opinions on Several Issues Regarding Intellectual Property Judgments Under the Current Economic Situation to provide further interpretation of a series of legal principles such as the prosecution history estoppel.)
• The Guidelines propose that unified IP tribunals be established by the courts for handling civil, administrative and criminal cases involving IP rights together.  Currently, IP cases are handled by the civil, administrative and criminal tribunals of the courts separately, based on the nature of the cases.  The Guidelines also suggest studying the feasibility and necessity of establishing a unified appeals court for IP cases.
• The Guidelines indicate that the Supreme Court will issue new judicial interpretations regarding protection of well-known trademarks, judgment criteria for patent infringement cases and civil procedures of antitrust cases in the near future.  (The new interpretation regarding protection of well-known trademarks was released on April 23, 2009 and became effective on May 1, 2009.)