[Shanghai Legal Daily] Shanghai Intellectual Property Court Carried out Large-scale Survey to Help Optimize the Business Environment and Solve “Urgent, Difficult and Challenging” Problems of Enterprises Effectively April 17, 2018 Shanghai Legal Daily A02: Rule of Law Reporter Hu Diefei “We find it very difficult to provide evidence when running into a patent dispute.” “As application and acquisition of intellectual property rights is time-consuming and costly, willful infringement should be severely punished. Is it possible to consider more punitive factors?”…Recently, many enterprises spoke out their urgent, difficult and challenging problems encountered during IPR protection in the “going out” survey of Shanghai Intellectual Property Court. A stable, fair, transparent and predictable legalized business environment is an important symbol of Shanghai’s enhanced attractiveness, creativity and competitiveness, while fair and efficient IPR judicial protection system is undoubtedly a key link to create a good business environment. As a “shield” for the innovation and entrepreneurship of market players, how’s the IPR judicial projection going in Shanghai now? What are the weak links? Did Shanghai Intellectual Property Court take any measure? The reporter paid a visit to Shanghai Intellectual Property Court to seek answers. Current situation 2,030 cases were accepted last year From the case of dispute over invention patent infringement - Hu Mou v. Mobike (Beijing) Information Technology Co., Ltd. to the case of dispute over trademark infringement - Chateau Lafite Rothschild v. Shanghai Mellowines Development Co., Ltd., and then to the appeal of dispute over unfair competition - Shanghai Zaihe Network Technology Co., Ltd. et al v. Zhejiang Tmall Network Co., Ltd. …Shanghai Intellectual Property Court has given full play to its trial function and handled a number of intellectual property cases with guiding significance and social influence. The reporter learned that a total of 2,030 intellectual property cases were accepted by Shanghai Intellectual Property Court in 2017, increased by 8.15% YOY. 2,031 cased were concluded, up 8.2% YOY. The clearance rate reached 100.05% in the same period throughout the year. Of these, there are 1,186 copyright cases, 444 patent cases, 172 trademark cases, 70 unfair competition cases, 82 franchise contract cases, 17 technology contract cases, 3 monopoly cases and 56 other cases. It’s noted that among the first-instance cases accepted by Shanghai Intellectual Property Court, technology-related cases accounted for 96.06%. Survey Small and medium-sized innovative enterprises have “concentrated” problems “Large enterprises have complete set of “equipment,” including legal specialists and professional lawyer teams. However, small innovative start-ups like us will easily get confused in various links even if we hire lawyers.” Mr. Zhang, an enterprise representative from Zhangjiang High-tech Industrial Development Zone, sighed. In fact, many small and medium-sized enterprises have the same confusion. During ordinary trials and communication, judges of Shanghai Intellectual Property Court found that high-tech enterprises, especially small and medium-sized enterprises, are highly eager for innovation and have made lots of achievements. However, little effort has been made in the protecting of intellectual property rights of these innovative achievements, leavingenterprises held up by lawsuits. Some well-known large enterprises are often subject to infringement, and the infringing products have a great impact on the market share, which is very detrimental to their development. “The effectiveness of IPR protection determines to some extent the soft power and the overall business environment of a city. In the process of building a globally influential technology innovation center in Shanghai and promoting the implementation of FTZ strategy, IPR protection is particularly important, and the difficulties in IPR protection must be conquered one by one using holistic approach.” Wang Qiuliang, President of Shanghai Intellectual Property Court, said. For this reason, Shanghai Intellectual Property Court took the initiative to “go out” to listen to the voices of all parties directly, learn about their difficulties and challenges in IPR protection, and seek countermeasures. Measures Make efforts to solve the compensation problems Difficulty in providing evidence, low compensation and long period have always been the problems in intellectual property cases. “Especially with regard to compensation, punitive damages are stipulated in the Trademark Law only at present, which aren’t applicable to willful copyright and patent infringement.” Judge of Shanghai Intellectual Property Court said frankly. In judicial practice, Shanghai Intellectual Property Court is constantly trying to determine the amount of damages using discretionary compensation method by guiding the obligees to provide evidences that prove their actual losses or the illegal gains of the infringers, so as to provide full protection for them as much as possible. Shanghai Intellectual Property Court established a judicial determination mechanism for infringement damages, which is oriented by the respect of intellectual property rights and encouragement of innovative application and guided by the market value of intellectual property that meets the market expectation of obligees. Statistics show that the court adjudicated 126 patent infringement cases in 2017, 99 of which ended with established infringement. The success rate for patentees reached 78.57%. At the same time, Shanghai Intellectual Property Court is actively exploring the role of market value (e.g. intellectual property awareness) in the determination of infringement damages. For example, in the case of dispute over copyright infringement and unfair competition filed by Hugen Star Information Technology Co., Ltd., the court decided that the infringer should bear the economic losses of RMB 4 million according to the popularity of the game involved. Besides, Shanghai Intellectual Property Court also determines the amount of damages as appropriate above the statutory damages. When it’s difficult to prove the losses suffered or profits earned as a result of the infringement, but evidences show that the above amount is obviously higher than the maximum statutory damages, the amount of damages will be determined reasonably above the maximum statutory damages based on all evidences in the case. Shanghai Intellectual Property Court also increased the punishment on willful and repeated infringement. In case of repeated infringement, willful infringement and other serious infringement, the amount of damages will be increased according to law to contain and deter IPR infringement effectively. According to the Opinions of Shanghai Intellectual Property Court on Giving Full Play to Judicial Functions and Roles to Provide Judicial Services and Security for the Optimization of Business Environment in Shanghai issued a few days ago, the information of infringers who commit infringement willfully and repeatedly will be incorporated into the public credit information system. Alleviate the problems of difficulty in providing evidences and long period In view of the problems of difficulty in providing evidences and long period generally reflected by the enterprises, Shanghai Intellectual Property Court took some countermeasures. In IPR disputes, many enterprises prefer “litigation preservation” to fix and extract evidence. In light of the professionalism and technology required by IPR litigation preservation, Shanghai Intellectual Property Court explored and perfected the litigation preservation mode of “judges + enforcement personnel + technical experts + technical investigators.” For example, in a pretrial evidence preservation case filed by a software company, judges, enforcement personnel, technical investigators and technical experts engaged by Shanghai Intellectual Property Court worked together to preserve and fix the infringing software in the defendant’s hundreds of computers. On this basis, two parties reached a settlement agreement (compensation + permission) successfully, which protected the patentee’s legitimate rights and interests effectively. Data show that Shanghai Intellectual Property Court adjudicated in favor of litigation preservation in 198 cases throughout the year, including 30 pre-litigation preservations and 168 preservations in legal proceedings, laying a solid foundation for the effective trial of cases and resolution of disputes. As to the problems that infringer has difficulty in proving his profits earned as a result of the infringement and some evidences can’t be obtained easily from third parties, Shanghai Intellectual Property Court made full use of investigation orders, investigation and evidence collection according to its authority and other mechanisms to relieve the burden of proof of patentees. To solve the problem of long trial period, Shanghai Intellectual Property Court has constantly perfected the “four-in-one” technical fact-finding mechanism (technical investigation, technical consultation, expert jury and technical appraisal) to improve the litigation efficiency shorten the trial period effectively. It’s learned that in 2017, technical investigators of Shanghai Intellectual Property Court participated in the trial of 67 cases, appeared in 91 court sessions, issued 16 technical examination opinions, and participated in 212 preservations, investigations and consultations; expert jurors participated in the trial of 158 cases; technical experts completed 42 consultations and 32 commissioned technical appraisals. “By giving full play to the role of technical experts in ascertaining technical facts, we improved the efficiency of litigation. The average trial period of cases is 113.07 days in 2017, down 16.19 days on last year.” Relevant person in charge from the Technical Investigation Division told the reporter. Moreover, Shanghai Intellectual Property Court employed diversified dispute resolution mechanism to constantly promote and deepen the pre-litigation mediation and court mediation, thereby resolving disputes timely and effectively. Popularize laws in court “Should the problems existing in the IPR management and protection of enterprises be noticed earlier, IPR infringement would have been avoided to a large extent. How to shift from post-trial to pre-warning and prevention remains a concern of Shanghai Intellectual Property Court.” Wang Qiuliang said. Recently, Shanghai Intellectual Property Court held a case study workshop on the theme of “safeguarding technological innovation and promoting the optimization of business environment.” More than 30 representatives of enterprises from Zhangjiang High-tech Industrial Development Zone were invited to attend the hearing of a case of dispute over computer software copyright infringement in court. It’s learned that Shanghai Intellectual Property Court is trying to establish a typical case database and also to popularize laws among enterprises by means of official website, Weibo, WeChat, editing books, etc. Over the past three years, it has compiled and published a number of casebooks to actively respond to the judicial needs of market players for IPR protection. “We hope that in this way, market players can fully perceive our respect for and effective protection of intellectual property rights, so that every judicial process will become a process for popularizing laws, thereby enhancing the awareness of the rule of law among enterprises and the general public.” Wang Qiuliang said. It’s reported that Shanghai Intellectual Property Court will continue to carry out a series of case study activities through public hearings, riding circuits, live hearings, release of typical cases, etc., so as to carry forward the spirit of rule-of-law and provide powerful judicial guarantees for the building of business environment.
