“3-in-1” Trial – An Innovation of IP Trial Mode

Issue 30 By Zhou Yi, China IP,[Comprehensive Reports]

On March 23, 2009, the Supreme People’s Court (SPC) issued the Opinion on Several Issues Concerning the Thorough Implementation of the State Intellectual Property Strategy (after abbreviated as the Opinion), suggesting that courts “actively explore the trial organization mode specialized for IP cases… study and set up IP tribunals to uniformly hear IP civil, administrative and criminal cases (the ‘3-in-1’ trial)…” 


After the promulgation of the Opinion, a judge who refused to be named told this journalist, “This Opinion is really meticulous in its wording. ‘Actively explore’ implies that the ‘3-in-1’ trial is not just being launched, but has been in the process, and has conducted its pilot tests already”.


At the China High-level Forum on Intellectual Property held on April 24 - one month after the promulgation of the Opinion, He Zhonglin, presiding judge of the Intellectual Property Tribunal of SPC, reiterated the necessity to “study and set up IP tribunals to uniformly conduct IP civil, administrative and criminal hearings,” and announced the list of forty experimental courts for the “3-in-1” trial (three higher people’s courts, 22 intermediate people’s courts and 15 district people’s courts).


“Such experiments have already been under way in local courts. It is since last year when the Outline of the National Intellectual Property Strategy (hereinafter Outline) stipulated clear regulations on promoting this system that the enthusiasm of local courts began to increase. Recently, SPC reinforced the role of this system in its series of documents issued. In my opinion, this ‘3-in-1’ trial mode is an inevitable trend for the trials of intellectual property cases,” said Prof. Li Shunde, deputy director of Intellectual Property Center of China Academy of Social Sciences (CASS).

Backgrounds of the 13-year pilot tests

Prof. Li explained, “The origin of the ‘3-in-1 trial’ system can be traced back to Shanghai Pudong Court, which used this mode to hear IP cases early in 1996. I remember that Prof. Zheng Chengsi, after getting this news, was very interested in it and wrote articles to show his admiration for the great reform.”

In the materials provided by Judge Yan Jianyi from Shanghai Pudong Court, we saw the earliest “3-in-1” trial mode ever used, though it went by another name: In 1996, the Intellectual Property Tribunal of Shanghai Pudong People’s Court set up a “three-dimensional trial mode” – to hear various IP cases (including IP criminal cases) by the Intellectual Property Tribunal of this court under the rules of Civil Procedural Law, Administrative Procedural Law and Criminal Procedural Law.

Pudong Court established this system which is not motivated by the instructions of the superior authorities, but out of social needs.

The Gillette “Flying Eagle” infringement case of 1995, for example, involved both criminal prosecution for trademark passing-off, and small business complaints against local administrative penalties on alleged trademark infringement, as well as Gillette’s unfair competition claims against its competitors. In the trial process, it came to the judges’ attention that consolidations of these processes were necessary for these highly specialized cases. Thus, they set up the “Pudong mode.”

However, it is acknowledged that complexity in IPR cases is not the immediate reason for the creation of the “3-in-1” mode. It was the overlapping jurisdiction over criminal, administration and civil proceedings which created the confusion.

Prof. Li continued, “The most common IP cases - civil IP cases, very special as it is, are usually within the jurisdiction of intermediate and above courts as required by the Civil Procedure. A few district courts may hear the general IP cases only by designation of SPC. Patent dispute cases, as they are more complex, can only be handled by higher people’s courts and a few intermediate courts mostly located in provincial capitals. Now only 72 intermediate courts are on this list. The courts competent to hear new plant variety cases are higher people’s courts and 38 intermediate courts. For integrated circuit cases, the competent courts are higher people’s courts and 43 intermediate courts.”

However, criminal and administrative cases involving IP issues are always within the jurisdiction of district courts, which causes practical confusions, particularly in cases involving both criminal and civil claims. Case proceeding in China usually adopts the principle of “criminal action prior to civil action”, but when the case is the criminal jurisdiction of low-level trial and the civil jurisdiction of high-level trial, conflict arises. Prof. Li gave us an example happened in Shandong Province: one party escalated an ordinary civil case involving patent infringement to a criminal one, just in order to make the local basic level court have the jurisdiction (which had no jurisdiction over IP civil cases), and finally, tricked the judicial authority into arresting the opposing party.   

Judge Yao Jianjun from the IP Tribunal of Xi’an Intermediate People’s Court told the journalist, “Restricted by trial levels, many cases, especially those involving business secrets, usually received judgments different criminally and civilly. This caused great inconvenience to both the court and the litigants, and it demand for a ‘3-in-1’ trial mode emerged. Citing the words of Sun Hailong - Vice President of Xi’an Intermediate People’s Court, this trial mode is a breakthrough and reconstruction of the traditional litigation system. The ‘civil action prior to criminal action’ principle in IP case proceeding upsets the ‘criminal action prior to civil action’ principle in the hearing of cases involving both criminal and civil proceedings, and the leading role of criminal proceeding in civil action collateral criminal proceedings.’”

The “liberal” innovation

Although this “3-in-1” mode was adopted by the Outline and the Opinion, it is in its heuristic process. Both documents word it as “actively exploring,” “studying and setting up” and “summarizing carefully,” and neither gives a clear definition of it, or plans to forcibly implement it.

According to Prof. Li, “The ‘3-in-1’ mode is a form of trial that courts fish out by themselves based on judicial practices. Although positive, there is no universal rule about it in our country. If you can do it, you do it. For example, in courts in northwest areas where IP cases rarely appear, this system is obviously not necessary. In one word, whether to adopt the ‘3-in-1’ mode or how to adopt it, it will be based on necessities and facts.” 

The different conditions of different local courts put the system on the path of “free” innovation: each court has their unique mode.

1996’s “Pudong mode” is a kind of helpful attempt by basic level courts to implement this “3-in-1” trial mode. The reason for Pudong Court to become the vanguard is that it has already got the civil jurisdiction over IP cases.

The Xi’an Intermediate People’s Court started its “3-in-1” trial test in 2006. Yao Jianjun said, “In Xi’an, only intermediate and above courts use this system, because basic level courts there are not qualified for hearing IP civil cases. Although Xi’an is a capital city, it doesn’t have as many IP cases as in Beijing or other big cities. IP case hearing won’t be a heavy burden for the intermediate courts there.” 

As the first intermediate people’s court in China which adopts the “3-in-1” system, Xi’an Intermediate People’s Court varies from “Pudong mode” in the specific implementation. It was called “Xi’an mode” by China Trial and Jiang Zhipei, former chief judge of IP Tribunal of SPC. This mode requires that civil cases, criminal cases and administrative cases be independently heard by three tribunals; but administrative cases and criminal cases to be heard by the collegiate bench composed of judges from IP tribunal, administrative tribunal and criminal tribunal; as the intermediate court, Xi’an Intermediate People’s Court also integrates the jurisdiction over IP criminal cases formerly belonging to basic level courts.

After three years of trial implementation, Xi’an Intermediate People’s Court is now expecting a further qualitative leap. “Now we are investigating into basic level courts authorized by SPC to hear ordinary IP cases involving copyright, trademark, illicit competition or intellectual property contracts. In due course, we will appoint certain basic courts to take in charge of the first instances of civil, criminal and administrative cases. Finally, all IP civil cases, criminal cases and administrative cases will be under the jurisdiction of the IP tribunal of the intermediate people’s court”, said Yao Jianjun.

However, Xi’an Intermediate People’s Court is not the “laboratory mouse” of this centralized jurisdiction mode, but Wuhan Jiang’a District People’s Court is. 

Last March, the IP Tribunal of Wuhan Jiang’an District People’s Court was set up. On May 30, SPC issued a document to appoint Wuhan Jiang’an People’s Court trial court of some IP civil cases under its jurisdiction. “Wuhan mode” was born: Wuhan Jiang’an People’s Court sets up the IP tribunal to hear all IP administrative cases and IP criminal cases of first instance of the city under the jurisdiction of basic level courts, as well as the first instance IP civil cases under the jurisdiction of the court. Cases under the jurisdiction of intermediate courts, i.e. IP criminal, administrative and civil cases of second instance will all be heard by the IP tribunal. IP administrative cases of first instance that were subject to the intermediate court will also be transferred to the IP tribunal. The IP Tribunal of Wuhan Intermediate People’s Court now has three collegial benches. The new one is responsible for supervising basic courts’ IP judicial works, training IP judges, and hearing IP administrative cases of first instance under the jurisdiction of the intermediate court, and IP civil, administrative and criminal cases of second instance.

“‘Wuhan mode’, which is a centralized hearing mode, is based on the small quantity of IP cases”, Zhang Tianwu, partner of Dewell & Partners told this journalist, “In Wuhan, there are about 10 IP criminal and administrative cases and about 300 civil cases in a year. After distribution, each court gets a small quota. Therefore, it is with reason to centralize them in one basic level court. According to investigation, there are about 40 IP civil cases in one year whose forum domicilii and locus delicti are in Jiang’an District, so it is appropriate to assign the jurisdiction to Jiang’an District People’s Court. Moreover, this mode reserves some expansion space for the IP procedural system. If the number goes up, there will be more experimental courts and one IP tribunal for each district.” 
   
The reform led by the civil tribunal

“Since its first appearance, the ‘3-in-1’ trial mode has had a loyal supporter: the IP tribunal of local courts”, said Prof. Li.

By local experiments and the rules of the National Intellectual Property Strategy and the Opinion, we can also see IP tribunal’s leadership of this reform. The IP tribunal implementing the “3-in-1” trial system is special to the civil tribunal.  

This is relatively reasonable and practical process. IP criminal cases and IP administrative cases are much less than IP civil cases in quantity, so it’s more appropriate for them to fall into the jurisdiction of the IP tribunal.

“Despite the different causes of action, these three case types are actually based on the same fact”, said Zhang Tianwu. But for this same fact, Zhang continued that “the criminal tribunal and the administrative tribunal lack trial experiences and the knowledge of IP area. They need helps from the IP tribunal.” 

Attorney Li Dayu from the Shanxi Jindi Law Firm shares the same opinion: “IP field is a strongly professional field. IP cases are usually beyond the knowledge of most judges. Only IP-specialized judges are up to them, who are mostly civil case-specialized, and weak in trials of IP administrative and criminal cases. Therefore, it is necessary to have some rearrangements and coordinate certain things.”  

Prof. Li is rather optimistic about the “3-in-1” trial system. He said, “Our study shows that in the actual process of this system, different opinions mainly come from the criminal tribunal and the administrative tribunal. But this is not a big problem. The National Intellectual Property Strategy and the Opinion have basically made this system a law.”

(Translated by Hu Xiaoying)

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