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Supreme People’s Court: Intellectual Property Protection by Chinese Courts in 2011

As the national adjudication authorities, the people’s courtsare a cornerstone in protection system for China’s intellectualproperty rights. They are irreplaceable in many aspects:

regulating intellectual property relationships, safeguarding thelawful rights of intellectual property owners, punishinginfringers, and maintaining the order of our socialist marketeconomy. Last year was the first year of the 12th five-year planperiod, during which accelerated progress was made inimproving the socialist rule of law, and major strides taken in thejudicial protection of intellectual property. Under the strongleadership of the Party Central Committee, headed by SecretaryGeneral Hu Jintao, and the effective supervision of the people’scongresses and their standing committees of all levels, thepeople’s courts adapted to emerging demands after theformation of a Chinese socialist legal system, discharged theirconstitutional and legal duties of intellectual propertyadjudication, and achieved the Three Key Tasks of social conflictresolution, development of innovative social administrationpractices, and enforcement of law in a fair and honest manner. 

 

Thepeople’s courts have also improved their level of competence andquality of adjudication, increased public confidence in the judiciary,furthered judicial protection of intellectual property, andfacilitated innovation and advancement in technology.Wang Shengjun, President of the Supreme People’s Court, hassaid that adjudication of intellectual property is increasinglyimportant as the economy grows and the society modernizes. Inrecent years, intellectual property is a major priority for thepeople’s courts of all levels. The courts have pursued judicialactivism, focused on delivering key tasks as determined by thecentral government and have served the overall interests of thecountry. They have developed innovative approaches, improvedjudicial ethics and built professional capacity. In doing so, thepeople’s courts have contributed significantly to China’s economicand social development and to its innovative endeavours.

 

I. Adjudicated according to Law andFocused on Delivery of Justice

 

In 2011, the primary focus of the people’s courts forintellectual property matters continued to be adjudication.Among the courts’ many responsibilities, adjudication was thetop priority. The people’s courts adjudicated cases fairly andefficiently, ensured that facts are properly determined, lawscorrectly applied and decisions complied with judicial policies,tried to balance legal outcomes and social effect, improved thequality and efficiency of adjudication, and increased publicconfidence in intellectual property adjudication.

 

 

—Civil Trials as the dominant method for intellectualProtection

 

In 2011, the people’s courts had focused on using civil hearingsfor intellectual property matters. Civil hearing was a dominantmethod for intellectual property protection. Greater intellectualproperty protection on the part of the people’s courts has helpedcurb infringing activities, safeguard the interests of owners ofintellectual property, and create an environment conducive forinnovation. By defining a reasonable scope and level of protection,the people’s courts aimed to prevent abuse of intellectual property,facilitate dissemination and application of knowledge and promoteinnovation. Additionally, this will level the playing field, realize themarket value of intellectual property, and encourage use ofintellectual property to increase productivity and competitiveness.Strengthening of intellectual property protection took place inmany forms to accomplish multiple goals: patent protection, toencourage indigenous innovation and improve state corecompetitiveness; trademark protection, to cultivate home-grownbrands and jumpstart the brand-driven growth; copyrightprotection, to foster creation of new business models anddevelopment of creative industries; and competition protection, toimprove market structure and ensure fair play.

 

In 2011, the number of first instance civil intellectual propertycases accepted and disposed by local courts grew by 38.86% and39.51% to 59,612 and 58,201 respectively. Among the casesaccepted in 2011, 7,819 were patent cases, up 35.16% year-on-year;12,991 were trademark cases, up 53.56% year-on-year; 35,185 werecopyright cases, up 42.34% year-on-year; 557 were technologycontract cases, down 16.87% year-on-year; 1137 were competitioncases (18 were monopoly-related), up 0.53% year-on-year; and2,193 were other intellectual property cases, up 11.55%year-on-year. Among the cases disposed in 2011, 1,321 involvedforeign parties, down by 3.51% year-on-year; and 635 involvedHong Kong, Macau or Taiwan parties, up 128.42% year-on-year.In 2011, civil intellectual property cases of second instanceaccepted and concluded rose 17.17% and 18.18% to 7,642 and 7,659(including cases carried over from previous years); new andconcluded reopened cases (zaishen cases) grew by 164.86% and105.50% to 294 and 224; cases accepted and concluded by theSupreme People’s Court (SPC) totalled 305 and 311 (includingcases carried over from previous years), among which 255 werereopened cases and 262 were concluded (including cases carriedover from previous years).

 

 

There was also improvement in adjudication quality andefficiency. The close rate of civil intellectual property cases of firstinstance at the local courts rose from 86.39% in 2010 to 87.61% in2011; appeal rate fell from 49.65% in 2010 to 47.02% in 2011;reopen (zaishen) rate increased from 0.27% in 2010 to 0.51% in2011; and remand for retrial (chongshen) rate decreased from4.57% in 2010 to 3.66% in 2011. The percentage of civil intellectualproperty cases of first instance concluded within time limitincreased from 97.93% in 2010 to 98.57% in 2011.

 

The people’s courts were prudent in handling applications forpreliminary injunction in intellectual property cases. In 2011, 130applications for preliminary injunction were admitted, and 98.23%were approved; 186 applications for pre-trial preservation ofevidence were admitted, and 93.42% were approved. To reduce theburden of proof on the part of the applicant, the people’s courtswere supportive in granting pre-trial preservation of evidence inaccordance with law. In 2011, 20 applications for pre-trialpreservation of property were admitted, and 100% were approved.High-profile cases included Gree Electric Appliances Inc. ofZhuhai v. Guangdong Midea Air-Conditioning Equipment Co.,Ltd, and Zhuhai Taifeng Electric Appliances Co., Ltd (patentinfringement), Guangzhou Hongtaiyang Auto Components Co.,Ltd. v. Anhui Jianghuai Automobile Group Co., Ltd and AnhuiJianghuai Automobile Co., Ltd (infringement of the exclusiveright to use registered trademark), E-LandInternational Fashion (Shanghai) Co. v. Zhejiang TaobaoNetwork Co., Ltd. and Du Guofa (trademark infringement),Société Civile de Château Lafite Rothschild v. ShenzhenJinhongde Trade Co., Ltd. and Health Industry DevelopmentCo., Ltd. under Hunan Biological & Pharmaceutical Group(infringement of the exclusive right to use registered trademarkand unfair competition), Tencent Technology (Shenzhen) Co.,Ltd. and Shenzhen Tencent Computer System Company Limited,v. Beijing Qihoo Technology Ltd., Beijing Sanji Wuxian NetworkTechnology Co., Ltd., and Qizhi Software (Beijing) Co., Ltd.(unfair competition), Beijing Kaixinren Information TechnologyCo., Ltd v. Beijng Qianxiang Hulian Technology DevelopmentCo., Ltd. and Beijing Qianxiang Wangjing TechnologyDevelopment Co., Ltd. (unfair competition).

 

—Supervised and Reviewed intellectualproperty-related administrative decisions and supportedthe intellectual property-related responsibilities ofadministrative authorities

 

The people’s courts adjudicated administrative cases (disputeswith administrative authorities) fairly and efficiently, andpromoted substantive resolution of intellectual property-relatedadministrative disputes. In 2011, the local courts accepted 2,433intellectual property-related administrative cases of first instance,6.06% less than previous year, and closed 2,470 such cases, 3.30%more than previous year. Of those accepted, 654 were patent cases,up 18.69% year-on-year; 1,767 were trademark cases, down 12.78%year-on-year; 2 were copyright cases, unchanged from the previousyear; 10 were other intellectual property cases. In 2011, SPCaccepted 102 intellectual property-related administrative cases andconcluded 101. Of those concluded, 73 cases or 72.28% weredismissed; 20 cases or 19.80% were issued tishen orders (similar tocertiorari), 3 cases or 2.97% were ordered to reopen (zaishen); 3cases or 2.97% were withdrawn; 1 case or 0.99% involved issuanceof written instructions to a lower court (fahan); 1 case or 0.99%through other methods. SPC reviewed 13 tishen cases andconcluded 11. Of those concluded, 1 or 9.09% was affirmed; 10 or90.91% were reversed.

 

The number of first instance cases involving foreign parties orHong Kong, Macao or Taiwan parties increased substantially to1,237, representing 50.08% of the concluded intellectualproperty-related administrative cases of first instance; 986 of theabove cases involved foreign parties, 116 Hong Kong parties, 3Macao parties and 132 Taiwan parties.

 

There was also a drastic increase in intellectualproperty-related administrative cases of second instance. Thenumber of cases accepted and concluded by the local courts was1,333 and 1,266 respectively. Of the concluded cases, 1,134 wereaffirmed, 67 reversed, 3 remanded for retrial (chongshen), 42withdrawn, 14 dismissed; in 2 other cases, the original ruling wasrevoked and a new order issued to docket the case for hearing; 4other cases were disposed of through other methods.High profile cases included Wei Tingjian and T.C.Pharmaceutical Industries Co., Ltd v. Trademark Review andAdjudication Board of the State Administration for Industry andCommerce (administrative dispute over reconsideration decisionon trademark cancellation), Beijing Resources Double-cranePharmaceutical Co., Ltd. and Xiangbei Welman PharmaceuticalCo., Ltd. v. Patent Re-examination Board of the State IntellectualProperty Office (administrative dispute over patent invalidation),France Castel Frères SAS v. Trademark Review andAdjudication Board of the State Administration for Industry andCommerce and Li Daozhi (administrative dispute relating to areview decision on trademark revocation).

 

—Punished and deterred infringement of intellectualproperty with criminal sanctions

 

To punish and deter infringement of intellectual propertyeffectively, the people’s courts stepped up criminal enforcement ofintellectual property, and actively participated in the special actionagainst intellectual property infringement and production and saleof counterfeit and sub-standard products.

 

In 2011, the number of intellectual property-related criminalcases of first instance increased considerably. New filings increasedby 42.96% to 5,707. The new filings included 3,134 intellectualproperty infringement cases (2,417 involved registered trademarks,such as use of counterfeit marks), up 142.19% year-on-year; 774were intellectual property infringement cases involving the crimeof production and sale of sub-standard products, up 29.87%year-on-year; 1,747 were intellectual property infringement casesinvolving the crime of illegal business operations, down 15.93%year-on-year; 52 were cases of other nature.Intellectual property-related criminal cases of first instanceconcluded by the local courts rose 39.62% to 5,504. Personsagainst whom judgments were effective totalled 10,055, including7,892 who were given criminal sanctions: 2,967 were criminalcases involving infringement of intellectual property and 5,384offenders were sentenced in effective judgments, up by 136.60%and 173.86% year-on-year; 750 were criminal cases of productionand sale of sub-standard products (involving intellectual propertyinfringement) and 1,509 offenders were sentenced in effectivejudgments; 1,735 were criminal case of illegal business operation(involving intellectual property infringement) and 3,032 offenderswere sentenced in effective judgments; 52 were criminal case ofother nature but also involving intellectual property infringementand 130 offenders were sentenced in effective judgments.For criminal cases involving intellectual property infringement,the defendants of 1,060 cases were found guilty of counterfeitingregistered trademarks and 2,163 offenders were sentenced ineffective judgments; the defendants of 863 cases were found guiltyof selling products bearing counterfeit registered trademarks and1,507 offenders were sentenced in effective judgments; thedefendants of 370 cases were found guilty of illegallymanufacturing or selling illegally manufactured counterfeitregistered trademarks and 691 offenders were sentenced ineffective judgments; the defendants of 1 case were found guilty ofpatent counterfeiting and 2 offenders were sentenced in effectivejudgments; the defendants of 594 cases were found guilty ofinfringing copyrights and 852 offenders were sentenced in effectivejudgments; the defendants of 30 cases were found guilty of sellinginfringing reproductions and 75 offenders were sentenced ineffective judgments; the defendants of 49 cases were found guiltyof infringing upon trade secrets and 94 offenders were sentencedin effective judgments. The case of Ju Wenming, Xu Lulu and HuaYi, who were convicted of copyright infringement, was ahigh-profile case.

 

 

In 2011, the landscape for intellectual property casesexhibited the following characteristics:First, new filings increased considerably. The local people’scourts have accepted 59,612 new first instance intellectualproperty cases, 38.86% more than 2010; 2,433 first instanceadministrative intellectual property cases, 6.06% lower than2010; and 5,707 intellectual property-related criminal case offirst instance, 42.96% more than 2010.

 

Second, the number of major complex and difficult cases,and new type cases has increased. Cases involved foreign partiesand attracted international attention were proportionally higher.There was also a growing percentage of cases where the legalprovisions were too general and the courts had to define theboundaries of the law, or cases where the outcome of thejudgement affected the parties’ interests significantly.

 

Third, encouragement of innovation led to increasingdemand to protect proprietary innovations; hence, risingnumber of patent cases. There was a notable increase in thenumber of cases involving high tech inventions or cases relatedto pharmaceutical, communications and environmentalindustries. The economic interests involved in the patent casesand the damages awarded have risen. There were also moredisputes over patented items developed by local Chinesecompanies, and more Chinese companies are suing foreigncompanies or foreign-invested companies. As more foreignparties are involved in patent disputes, trials and court decisionsattracted greater international attention.

Fourth, increasing awareness among enterprises in thebuilding and protecting of their own brands, the number oftrademark cases have increased. Cases involving the grantingand validation of trademarks have increased significantly. Therewas also increase in the number of trademark infringement casesthat either overlapped or are connected with the granting andvalidation of trademark rights, and cases that involved the majorbrands of well-known companies. Disputes involving commercialmarks have also continued to rise.

 

Fifth, as the creative industry prospered, copyrightprotection must not only arise out of cultural considerations, butalso for economic reasons. This has led to the continued increasein the number of copyright cases, which accounted for half of thetotal volume of intellectual property-related cases. Internetcopyright issues were most prominent. The number of trialscombining multiple cases involving common parties and thenumber of interrelated cases have risen. Copyright disputes overthe development and application of internet technology wereclosely followed by the industry. The balance between copyrightprotection and development of new business models has becomemost imperative.

 

Sixth, fierce market competition and diverse commercialactivities require that competitive activities be more regulated.Although unfair competition is prohibited by law and as such,incidents of unfair competitive behaviour have been declining,there were more cases that challenged the boundary of law.Therefore, application of the general principles of theAnti-Unfair Competition Law was increasing. In addition,behaviours previously accepted as legal were challenged sinceimplementation of the Anti-Monopoly Law. The courts havesince received “test cases”, where the action was initiated not forpersonal interests but to test or challenge the limits of the law.

 

Such cases have received much public attention.

 

—Followed the principle of “Mediation as Priorityand Combining Mediation and Adjudication” in disputeresolution

 

The people’s courts tried to balance mediation andadjudication, and attaced importance to regulating mediationactions for better mediation results. The courts followed theprinciples of “resolving disputes, reconciling differences anddispelling problems” and considered the facts of the cases todetermine their approach to a case.

 

The courts observed the lawful and voluntary use ofmediation, avoided the impractical reliance of mediation rate ascriteria for effectiveness, and respected the will of the parties;where mediation was inappropriate or unsuccessful, judgementwas promptly delivered.

 

The courts were building a dispute resolution mechanismthat combined judicial and non-judicial processes, and werepromoting “Greater Mediation” (da tiaojie), which includes“people’s mediation”, administrative mediation and judicialmediation. The courts have also strengthened judicialconfirmation for settlement agreements reached throughpeople’s mediation, and have supported mediation agencies,arbitration bodies and the industrial organizations in their workof resolving social conflicts.

 

The high people’s courts of Tianjin, Shandong, Liaoning,Hubei, Anhui, Shannxi, Xinjiang, Guizhou, Hainan, Ningxia,Qinghai and Tibet and the Court of Xiangjiang Production andConstruction Corps were exploring a judicial mediation disputeresolution system tailored to their local conditions.

 

Beijing High People’s Court deepened its partnership withInternet Society of China for Mediation and Chinese Writers’Association by developing a dispute resolution system. It hasalso signed a cooperation agreement with Beijing IntellectualProperty Bureau to appoint the bureau as mediator forintellectual property disputes, and has formulated the Guidelinesin Coordinating Judicial Mediation with AdministrativeMediation.

 

Under the coordination of Hunan High People’s Court, theChangsha County People’s Court and Changsha City (at countylevel) Arbitration Commission established a mechanism to aligntheir work with the alternative dispute resolution system ofChangsha Economic and Technological Development Zone.The courts of Fujian Province leveraged professionalmediators, people’s assessors (lay judges), industrial associationsand agents ad litem to create the necessary structure for “GreaterMediation”.

 

The courts of Sichuan Province established a “three-in-one”mediation scheme comprising of people’s mediation,administrative mediation and judicial mediation.The Shanghai Mediation Centre for Copyright Disputes andthe Internet Society of China successfully mediated more than120 intellectual property cases referred to them by Shanghaicourts. The Shanghai Mediation Center for Copyright Disputesalone assisted the settlement of 68 intellectual property casesreferred by the People’s Court of Putuo District. In 2011, 72.72%of intellectual property-related first instance civil cases werewithdrawn after mediation, 4.13% higher than 2010.

 

—Gained Public Confidence through Greater JudicialOpenness

 

The people’s courts adhered to the policy of judicial openness,improved fairness, openness and transparency in courtproceedings, upheld the parties’ and public’s right to know, andpracticed “sunshine justice” during adjudication. To enhancetransparency and public confidence, the courts relied on differentmeans, such as press conferences, Court Open Day, and livewebcast.

 

 

To promote judicial openness, SPC released the white paperentitled Intellectual Property Protection by Chinese Courts in 2010(Chinese and English Editions), organized the National Seminar onOpenness in Intellectual Property Cases, trained informationofficers in all the courts to build online databases of intellectualproperty judgements and decisions. The China IntellectualProperty Rights Judgements and Decisions website was alsoupgraded to ensure that intellectual property judgements anddecisions are promptly uploaded on the website and to improve thewebsite’s function. By the end of 2011, 40,175 judgements anddecisions were published on the website. SPC also improved uponthe content and upgraded the Intellectual Property Protectionwebsite, a sub-website under its official website.

 

The Shanghai High People’s Court launched the IntellectualProperty Protection by Shanghai Courts website. The courts ofJiangsu Province launched a province-wide initiative called“Real-time Court Reporting” (which includes real-time videotaping,real-time transcribing and real-time display of transcript). Underthe initiative, all judgments and decisions were posted online, andcourt proceedings were shown on live webcast.

 

The high people’s courts of Beijing, Tianjin, Chongqing,Shandong, Guangdong, Guangxi, Sichuan, Gansu, Hebei, Jiangsu,Hainan and Xinjiang issued white or blue papers on judicialprotection of intellectual property for 2010. The high people’scourts of Anhui, Jilin, Qinghai and Tibet and the court of XinjiangProduction and Construction Corps advanced the mechanism ofjudicial openness for intellectual property cases. The intellectualproperty divisions of Liaoning courts were generally equipped withIT systems and smart devices, and provided regular live webcastsof court proceedings. The Jiangsu High People’s Court continuedto improve on the professionalism of its people’s assessors byselecting assessors from the intellectual property administrativeagencies to hear intellectual property cases, and by issuingOpinions on Managing Professional People’s Assessors forHearing Intellectual Property Cases.

 

II. Served the Overall interests of the Partyand the Country and Implemented the NationalIntellectual Property Strategy

 

In 2011, based on the actual work of intellectual propertyadjudication, the people’s courts have followed out “judicialactivism” in their work. They identified areas and issuesconsistent with the overall interests of the Party and the country,expanded the scope of services and further developed theirjudicial capacities, and implemented the National IntellectualProperty Strategy. Enhanced judicial protection of intellectualproperty contributed to the steady and rapid economic growthduring the 12th five-year plan period.

 

—Followed out judicial activism to serve the overallinterests of the party and the country, and to promotebalanced development of the economy and society

 

 

Intellectual property cases were handled by the people’scourts with both the national as well as internationalconsiderations in mind. Adjudication was to serve the ultimategoal of accelerating change of China’s growth pattern throughstrategic economic restructuring, technological advancement andindigenous innovation. The development of domestic andinternational situations was closely observed by the people’scourts, as they leveraged the judicial protection function tobalance economic and social development.

 

To facilitate the development of pillar industries andincrease the core competitiveness, the people’s courts haveimproved upon their adjudication of patent and othertechnology-related cases. To give impetus to the brand-driveneconomy, the courts have strengthened protection forwell-known trademarks; at the same time, the courts protectedwell-known trademarks from abuse as well as infringement. Topromote development of new industries, use of informationtechnology and the rise of China’s soft power, the courts havestrengthened adjudication of software, database, internet andother copyright-related cases. To safeguard fair competition andmaintain market order, the courts have also improvedeffectiveness in adjudication of competition cases.

 

Additionally, the people’s courts have also imposed heaviersanctions for infringement, reduced the cost of litigation, andaccelerated the building of a robust judicial protection system forintellectual property. They have stepped up protection forindigenous brands, essential and leading-edge researches, coreand important technologies and the creative industry. Theyhave also participated in operations to crack down on intellectualproperty infringement and production and sale of counterfeitand sub-standard products so as to build our national capacityfor innovation and to nurture core competitiveness.The “Stronger Judicial Protection of intellectual property forChange of Growth Pattern” project was launched to help reshapeChina’s economy. SPC issued the Opinions on the Role of Courtsin the Development and Prosperity of Socialist Culture, adoptedthirty measures to protect authors of creative works andscientific and technological findings, and instructed local courtsto step up protection for intellectual property.

 

The Shandong High People’s Court released the Guidelineson Strengthening the Adjudication of Intellectual PropertyCases, which provided direction for the courts.The courts of Zhejiang Province expanded the role ofadjudication of intellectual property cases based on the localeconomy and progress of industrial development, andimplemented the “Local Context-Based Intellectual PropertyCase Adjudication” project.

 

The Tianjin High People’s Court has issued theImplementing Opinions on the Provision of Judicial Safeguardsand Services for the Great Development and Great Prosperity ofa Socialist Culture. The Hubei High People’s Court has alsoissued the Implementing Opinions on Leveraging Initiatives onJudicial Protection for Intellectual Property to Strengthen theProvince through Culture and Scientific Development.The Yunnan High People’s Court issued the Opinions onImproving Judicial Protection of the Intellectual Property ofSpecial Industries and Industries with a CompetitiveAdvantage.

 

—Promoted the pilot project of centralisedadjudication of civil, administrative and criminal caseson intellectual property by the intellectual propertydivision.

 

The people’s courts of all levels have pursued reform anddeveloped innovative methods for intellectual propertyadjudication, and have also tried to establish a scientifically soundadjudication system and work mechanism.

 

Advancements of the National Intellectual Property Strategyhave been made, in that there has been additional pilots launchedin respect of centralised adjudication of civil, administrative andcriminal cases involving intellectual property (“three-in-oneadjudication”) by intellectual property divisions.

 

At the National Meeting of the Presidents of High Courts inDecember 2011, the SPC specified that the pilot project oncentralised adjudication of intellectual property-related civil,administrative and criminal cases by intellectual property divisions.This will ensure comprehensive protection, resourceoptimisation and scientific operations. As a result, intellectualproperty adjudication will become an efficient and authoritativesystem.

 

The courts that are in the pilot project have reviewed theirwork under the pilot programme, operated with a morestandardised approach, and promptly discovered new issues andresolved new problems. To further the pilot programme, the courtshave established coordinating mechanisms for adjudicating civil,administrative and criminal cases involving intellectual property,and have stepped up collaborative efforts with the public security,prosecutorial and administrative authorities. This was to ensuregreater judicial efficiency and consistency in judicial standards andto provide effective and comprehensive protection. The system alsoenables optimal use of resources, rational operations and theestablishment of an efficient and authoritative adjudication systemfor intellectual property matters.

 

As at end 2011, the pilot programme has been launched in 5high courts, 50 intermediate courts and 52 grassroots courts.The high courts in Jiangsu, Zhejiang and Inner Mongolia haveworked more closely with the local prosecutor’s office and police,and have provided guiding opinions on criminal protection issuesunder the pilot project on “three-in-one adjudication”.The Jiangsu High People’s Court and the provincial publicsecurity and prosecution departments have jointly issued theOpinions on Procedural Issues Relating to Adjudicating CriminalCases Involving Intellectual Property. The Opinions includedcomprehensive provisions on review of rights, collection andperpetuation of evidence, and determination of technologicalsecrets relating to the handling of criminal cases involvingintellectual property matters. Also, the introduction of “publiclyknown technique” defence for criminal cases involving tradesecrets was effective in unifying the standard of judgement forenforcing the law in criminal cases involving intellectual property,and was instrumental in increasing the level of criminal judicialprotection.

 

—Focused on publicity for judicial protection ofintellectual property, and continued to broaden theimpact of judicial protection for intellectual property.

 

The people’s courts have used various forms of publicity topromote the judicial achievements in intellectual propertyprotection. Publicity was comprehensive and multi-dimensional.As an important aspect of the court’s responsibility, publicity wasused to broaden the impact of judicial protection for intellectualproperty, and to establish a positive image of the judiciary inintellectual property protection.

 

The World Intellectual Property Day was observed as usual on26 April. Different activities were organised during the publicityweek, and the organisers continued to improve upon the publicitycontent. The courts of all levels organised publicity activities basedon the Circular on the Activities for the 2011 National IntellectualProperty Publicity Week issued by the Organizing Committee ofthe National Intellectual Property Publicity Week consisting of 25authorities, including the CPC Central Committee PublicityDepartment and SPC. The achievements of all courts in protectionof intellectual property were widely publicised. Publicity activitieswere varied and innovative, and have created extensive andpositive social impact.

 

During the publicity period, the SPC conducted the followingactivities:

• Convened a Symposium for National Courts on JudicialOpenness;• Signed Memorandum on Mediation Mechanism forInternet Intellectual Property Disputes;• Published white paper Intellectual Property Protectionby Chinese Courts in 2009 in Chinese and English;• Published the Annual Report on Intellectual PropertyCases;• Open the upgraded and revised China IntellectualProperty Rights Judgements and Decisions website;• Established theoretical research bases, field researchbases and demonstration models of local courts in respect ofintellectual property protection;• Published the Ten Major Cases and Fifty Typical Caseson Judicial Protection of Intellectual Property for 2010;• Published the draft judicial interpretation onadjudication of civil disputes involving monopoly to solicitpublic opinion; and• Organised the “Judicial Protection of IntellectualProperty in Jiangsu” activity for the central media agencies.The publicity activities were extensively reported by dozens oflocal media agencies. The Associated Press and other foreignmedia have also highly commended our efforts in strengtheningintellectual property justice and improving judicial transparencyfor intellectual property matters. The achievements of our courts injudicial protection of intellectual property have been well-praisedat home and abroad. Judicial protection of intellectual propertyhas won greater confidence in China’s intellectual propertyprotection and achieved greater international impact.The “Judicial Protection of Intellectual Property in Jiangsu”activity was als0 extensively reported by central media agencies,including the People’s Daily, www.people.com.cn, Xinhua News,Guangming Daily, China Central Television, China IntellectualProperty News, Legal Daily and People's Court Daily. Journalistsvisited Nanjing in Jiangsu Province, Suzhou, Changzhou, and Wuxiand reported the activities, and were able to obtain first-handinformation on the judicial system and operational reforms of theJiangsu courts and their open judiciary for intellectual propertymatters. Reporters also provided in-depth reports on the localdispute resolution mechanism for intellectual property disputes,and institutional-building and workforce-building for intellectualproperty judicial protection.

 

—Improved upon the jurisdiction structure forintellectual property cases, and promoted the concept ofjustice for the people and accessible by the people.

 

Embarking from the angle of providing convenience forintellectual property right holders to ensure that the rights holdersbetter exercise their lawful rights, and economising litigation costs,the people’s courts complied with the SPC’s Circular on Adjustingthe Criteria for Jurisdiction over First Instance Civil CasesInvolving Intellectual Property by Different Levels of LocalPeople’s Courts and Circular on Publication of Criteria forJurisdiction over First Instance Civil Cases Involving IntellectualProperty by Different Levels of Local People’s Courts, andimproved upon the jurisdiction structure for intellectual propertycases such that it was now more reasonable and logical. It alsooptimised allocation of judicial resources.

 

In areas that were economically, culturally and technicallymore developed, more basic-level courts were given, as appropriate,jurisdiction over general intellectual property cases. Intermediatecourts and grassroots courts were encouraged to exercisetrans-regional, centralised jurisdiction covering designatedadministrative regions in light of their work needs.As at end 2011, there were 82 intermediate people’s courtswith jurisdiction over patent cases, 45 over plant breeders' rights,46 over integrated circuit topography and 43 over determination ofwell-known marks. 119 basic-level courts had jurisdiction overgeneral intellectual property cases, and 3 basic-level courts weredesignated as pilot sites for adjudicating disputes relating to utilitymodels and industrial design patents.

 

The Jiangsu High People’s Court had been actively working ontrans-regional jurisdiction over intellectual property cases atbasic-level courts, such as Suzhou, Wuxi and Nanjing. The courtalso issued a Circular on Further Clarifying the Criteria for GradeJurisdiction over Intellectual Property Cases in the Province tounify criteria of jurisdiction over intellectual property cases acrossdifferent levels of courts.

 

—Focused on developing an innovative adjudicationsystem for intellectual property matters, and continuedto improve upon its fairness, efficiency, and authority

 

The people’s courts have always focused on developing aninnovative adjudication system for intellectual property matters:The Intellectual Property Division of SPC has signed aMemorandum on Mediation Mechanism for Internet IntellectualProperty Disputes with the Internet Society of China. Thememorandum represents a development in judicial andnon-judicial approaches (ADR) to dispute resolution. The highpeople’s courts of Heilongjiang, Shanghai, Tianjin, Qinghai, Hebei,Zhejiang, Fujian, Guangxi, Shanxi, Jiangxi, Xinjiang and InnerMongolia explored ways to establish and improve upon themechanism for finding technical facts. The courts also capitalisedon the role of experts by launching pilots in expert assessor andexpert witness systems to ensure better adjudication quality.The high people’s courts of Shandong and Hunan provincessigned with their respective provincial associations for science andtechnology a memorandum of understanding on cooperation injudicial protection of intellectual property. The two sides haveemployed special advisors and experts in science and technology,developed operation guidelines for them, and have explored newavenues that technical experts may participate in adjudication ofintellectual property matters.

 

The Jiangsu High People’s Court assisted the intermediatepeople’s courts within its jurisdiction to establish an expertdatabank and has issued provisional guidelines for themanagement of databank on technical experts in intellectualproperty.

 

The Guangdong High People’s Court has established an legalexpert advisory system, whereby ten experts who have extensiveexperience in theoretical research in science and technology andintellectual property and in administrative and law enforcementwere appointed as consultants for intellectual property law for theentire provincial court system.

 

—Reinforced horizontal relationships and built acomprehensive institution for protection of intellectualproperty.

 

Building a strong relationship with the administrativeauthorities for intellectual property, science and technology,industry associations and tertiary institutes has always beenpriority for the people’s courts. This is a way to achieve substantialresults in protecting intellectual property and to achieve synergybetween judicial and administrative protection, to elevate the levelof protection in China. The people’s courts of all levels have workedwith the Patent Re-examination Board of the State IntellectualProperty Organisation in organising meetings and exchangesbetween their personnel, and have been an active and effectiveforce in providing legislative and administrative and policyrecommendations.

 

The Beijing court system has been a driver in strengtheninghorizontal relationships, building exchange platforms and forgingcooperation. It has also explored the possibilities of establishingdistrict-level intellectual protection regimes: together with thedistrict’s intellectual property bureau and judicial bureau, theShijingshan District Court has established the “ZhongguancunTech Park Shijingshan Park Legal Service Platform”; the ChaoyangDistrict Court and the relevant authorities in the district havejointly organised a theme activity called “Protect Your IntellectualProperty, Usher in Innovation and Development”; the DongchengDistrict Court, the district’s intellectual property bureau,Yongheyuan Management Committee jointly organised the Third“IP-Yonghe Campaign”; the Huairou District Court worked withseven industry associations, including the Beijing ElectronicChamber of Commerce to establish a focal point.The Henan courts have also forged communication andcoordination mechanisms with the relevant intellectual propertyauthorities to create synergy for intellectual property protection.

 

—Increased international and inter-regionalexchanges, and elevated the image of China as aresponsible country in judicial protection of intellectualproperty.

 

The people’s courts have always looked upon international andinter-regional exchanges as important avenues in the judicialprotection of intellectual property. As such, the courts havecontinued to develop different channels of exchange and enrichedthe forms of cooperation, and have increased communication andcooperation with the United States and Europe.

 

Selected intellectual property judges have gone on study visitsto the United States, and judges have participated in China-EuropeIntellectual Property Working Group Meeting, China-US JointCommission on Commerce and Trade Intellectual Property WorkGroup Meeting, and the Meeting of the Chinese-Swiss WorkingGroup on Intellectual Property. By participating in activitiesinvolving foreign counterparts, the courts were able to respond toareas of concern of foreign parties, clarify misunderstandings, aswell as made known our achievements in intellectual protection toelevate our international image.

 

 

Last year, the SPC received nearly two hundred high-levelvisitors from countries as Japan and the United States, andprovided for the visitors a comprehensive overview of the situationand achievements in China in respect of judicial protection ofintellectual property, thereby increasing China’s internationalimpact in judicial protection of intellectual property.

To step up exchanges between the intellectual property legalfraternity and judiciary between the mainland of China and Taiwan,the SPC organised a visit to Taiwan by a delegation from the ChinaJudges Association. The members of the delegation were mainlyintellectual property judges. The delegation met with members ofthe judiciary in Taiwan, and conducted extensive discussions aboutjudicial systems, judicial protection of intellectual property andother issues relating to the adjudication systems. The visit hadhelped improved understanding between the two jurisdictions,developed friendship, and facilitated consensus in many issues. Itwas significant in building trust and cooperation between themainland and Taiwan, and in improving communication andexchange.

 

III. Strengthened the foundation of basic-levelcourts, unified application of law, and focused onadjudication supervision and operationalguidance

 

Fundamentals and local capacity affect the overall operationsof the people’s courts, and unifying judicial standards is necessaryfor rule of law in the country and for public confidence in thepeople’s courts. In 2011, strengthening the fundamentals and localcapacity was the focus of all the people’s courts, includingunification of judicial standards, supervision of adjudicationactivities and provision of operational guidance. The courts havestreamlined the line relationship between superior and inferiorcourts and have clarified the scope and procedures of supervisionby superior courts, so as to raise the intellectual property-relatedjudicial standard at the basic-level courts.

 

—Strengthened the fundamentals and local capacityfor intellectual property adjudication and consolidatedthe operational foundation of intellectual propertyadjudication.

 

Based on characteristics and general practice of intellectualproperty trials, the people’s courts of all levels have implementedthe SPC’s opinions on strengthening the fundamentals andcapacity of the basic-level people’s courts. The efforts taken weremanifold: further improved the institutional set-up for intellectualproperty adjudication at basic-level courts and increased theworkforce; focussed on specific issues when organising training forthe basic-level courts; enabled greater exchange-postings, suchthat intellectual property judges from basic-level courts may dopostings at a superior court or at courts of the same level to sharpen the skills and abilities of intellectual property judges atbasic-level courts.

 

The basic-level courts also received support in reforming andreviewing of institutions and operational mechanisms relating tointellectual property adjudication, to enable them to promptlyreflect upon and share their experience. Demonstrative courts wereestablished at the basic level as models and to lead the other courtsin improving the quality and efficiency of intellectual propertyadjudication, in developing innovative systems of adjudication andoperation, and in unifying adjudication approaches and standardsand strengthening of the adjudication team.

 

The SPC implemented the “Three-Five’s Project” to strengthenthe fundamentals and the basic courts capacity. The projectinvolves the following three dimensions: Established theoreticalresearch bases at the Peking University, Renmin University ofChina, East China University of Political Science and Law,Southwest University of Political Science and Law and ShenzhenUniversity; on top of the current China field research base forintellectual property judicial protection (in Suzhou), establishedfour more field research bases in Qingdao, Shenzhen, Changshaand Chengdu; established demonstrative courts for intellectualproperty adjudication at the basic-level courts in Chaoyang Districtin Beijing, Pudong New Area in Shanghai, Huqiu District inSuzhou of Jiangsu Province, Yiwu City of Zhejiang Province andJiang’an District of Wuhan City of Hubei Province.SPC’s Intellectual Property Division signed a memorandum ofunderstanding of cooperation with the Gaoxin DistrictManagement Committee of Suzhou to establish Suzhou’s GaoxinDistrict as a base for the selection and distribution of typical caseson the judicial protection of intellectual property in China. TheLiaoning High People’s Court has also cooperated with DalianMaritime University to jointly establish a “Liaoning Research Basefor the Judicial Protection of Intellectual Property”.

 

—Strengthened thematic research relating tointellectual property adjudication.

 

The people’s courts of all levels have recognised theimportance of “research-based adjudication”. The courts havecontinued to improve their research abilities and to use theirresearch outcomes to serve their adjudication needs. Researchtopics include: imposition of heavier sanctions, reducing the cost ofrights protection, setting down the principles and standards forcalculation of damages for intellectual property cases, andimproving the rationale and reasonableness of damagescalculation.

 

Research on the judicial protection of copyright on the internetcontinued, and key topics on the judicial protection of internetcopyright have been completed. For patents, research includedadjudication of administrative cases involving granting andvalidation of patents, judicial protection of trade secrets andpre-trial provisional measures for intellectual property cases.Research for trademarks was also carried out in aspects relating toimproving the quality and efficiency of adjudication ofadministrative cases and in the reform of the bounds ofjurisdiction over administrative cases involving trademarkdisputes. Other thematic researches involved copyright protectioninvolving foreign works, copyright disputes involving internet cafés,and protection of traditional opera works.

 

The resources of the Specialised Committee on IntellectualProperty of the China Adjudication Theory Research Associationwere also fully exploited, in that the committee serves as aspecialised academic body in intellectual property adjudication andplatform for academic exchange. To lay theoretical foundation foradvancing adjudication of intellectual property issues in thecountry, the Specialised Committee on Intellectual Property of theChina Adjudication Theory Research Association held the AnnualConference 2011 cum Seminar on “Increasing the Level ofProtection for Intellectual Property and Reducing the Cost ofRights Protection” in Chongqing. The meeting adopted a Decisionto Adjust Major Membership of the Specialised Committee onIntellectual Property of the China Adjudication Theory ResearchAssociation. The courts also worked closely with the relevantauthorities to amend laws and regulations, such as the CivilProcedure Law and the Anti-Monopoly Law. Experienced andtheoretically-sound judges were selected from different parts of thecountry and were divided into a copyright law research team andtrademark law research team. The teams conducted researches andprovided high quality legislation recommendations.

 

There were also specific researches targeting at difficult andhot topics, and at new situations and emerging issues. The people’scourts at all levels continued to improve on their methods ofresearch using innovative ways, and based on their research,prepared research reports, summarised their adjudicationexperience and published research papers. They also documentedtheir adjudication experience for exchanges, and organised forumsand lectures. The courts and judges dedicated themselves toimproving their research ability and the quality of their research,so as to serve the needs of adjudication practice.

 

—Continued to develop channels that help guideadjudication of intellectual property matters.

 

The people’s courts of all levels provided work guidance forinferior courts in many forms, including issuing judicialinterpretations, judicial documents, guiding cases, guidingopinions, and through special researches.

 

The SPC took on the important responsibility of providingjudicial interpretation or normative documents of a judicialinterpretation nature for laws relating to intellectual propertyrights. Also, SPC completed the drafting of the judicialinterpretation for adjudicating anti-monopoly civil cases, andsought public feedback on its judicial interpretations. Otherdrafting responsibilities of SPC include judicial interpretation foradjudicating internet copyright infringement cases, guidingopinions on the adjudication criteria relating to adjudicatingadministrative cases for the granting and validation of patents, andguiding opinions on procedural issues relating to adjudicatingadministrative cases for the granting and validation of trademarks.The Supreme People’s Court, Supreme People’sProcuratorate and Ministry of Public Security jointly issued theOpinions on Issues Relating to the Application of Law forCriminal Cases of Intellectual Property Infringement to clarifythe conviction and sentencing criteria for intellectual propertycrimes, in doing so, improved upon the normative regime ofjudicial protection for intellectual property crimes. The Opinionswas necessary for providing the public security organs, theprocuratorates and the courts with regulatory support, fordispelling doubts in the application of law, and for issuing lawfulsanctions. The Opinions are instrumental in enablingcapitalization of judicial initiatives to protect intellectualproperty, and maintain a fair and orderly market environment.A Work Conference for Intellectual Property Adjudicationfor National Courts was convened in Hangzhou of ZhejiangProvince, during which the requirements set forth by the 17thNational People's Congress of the CPC and the 6th PlenarySession of the 17th CPC Central Committee were thoroughlylearned and implemented. The conference captured theopportunities and addressed the challenges in intellectualproperty adjudication guided by the concept of socialist rule oflaw; highlighted the importance of intellectual propertyadjudication; reflected upon adjudication work in 2011 forintellectual property cases; analysed the current situation andtasks; and planned and designated work relating to adjudicationof intellectual property for the near term. It was a significantevent that helped improve the work of the judges in 2012 and inthe period after.

 

In addition, the expertise of intellectual property experts andacademics and of outstanding intellectual property judges wasrelied upon to write up a book on intellectual property casestudies for all the courts, so that intellectual property judgeswere equipped with high quality educational materials. TheGuangdong High People’s Court also assisted the Zhongshan CityIntermediate People’s Court in establishing a ZhongshanDecorative Lighting Intellectual Property Express RightsProtection Mechanism and an Intellectual Property Circuit Court,and the Shenzhen Longgang District Court in establishing asystem for perpetuating electronic evidence.

 

—Leveraged judicial policies in unifying judicialapplication of intellectual property laws.

 

Based on the judicial policy of “classification, differentiatedtreatment and appropriate stringency”, the people’s courtsadjusted and formulated specific policy guidelines for adjudicationof intellectual property cases, and in doing so, enabled thejudiciary to play an important role in protecting intellectualproperty. During adjudication, the courts were able to relyaccurately on judicial policies to guide them in the correctapplication of laws and regulations. The courts also reviewed andelaborated intellectual property judicial policies and used everymeans to ensure that these judicial policies are observed andimplemented, so that the administration of intellectual propertyjustice will eventually be uniform, standardised and open.—Innovated and strengthened adjudicationmanagement.

 

The people’s courts of all levels were working towardsestablishing a management system for intellectual propertyadjudication which was logical, complete and effective. Thisenabled management to be systematic; and management ensuredquality and efficiency. The emphasis on adjudication managementwas based on rules and standards, and to be scientifically sound.The management system included every adjudicator and everyprocess in the adjudication, so that quality and efficiency and theadjudication management process were improved continually. Themanagement system also included a regular reporting mechanismfor disposed cases. This was implemented to improve adjudicationefficiency, and to ensure that disposition of cases was evenlyspread out throughout the year.

 

Another area of focus was the quality of written judgements.Judges were urged to prepare judgements that were detailed inreasoning and that might be used as models or quality references.Well-written judgements were frequently selected and awardsissued to encourage greater focus on the quality of writtenjudgements. To improve on the adjudication of difficult cases, thecourts relied on different approaches such as joint-meetings ofpresiding judges, conferences of relevant judges and expert paneldiscussions to ensure fair administration of justice.

 

 

Further enforced were elevated jurisdiction (tiji guanxia: ahigher court exercises jurisdiction where necessary) andtrans-regional jurisdiction (yidi guanxia), so as to prevent localprotectionism and to ensure fair adjudication. The courts alsoattached importance to coordinating adjudication of related cases,so that related cases were handled consistently. The GuangdongHigh People’s Court established three work mechanisms as anon-going effort to improve the quality of adjudication work. Thesewere intellectual property adjudication work analysis and sharing,guidance by category, and communication and coordination. Thecourts of Chongqing Municipality have also developed a reportingsystem for major cases.

 

—Leveraged the demonstrative role of typical cases inadjudication of intellectual property cases.

 

The people’s courts attached great importance to thedemonstrative role of typical cases in intellectual propertyadjudication; selection and publication of typical cases wasconsidered an important long-term task. Case guidance inintellectual property adjudication was increasingly standardised,institutionalized and perpetuated. The Supreme people’s Court’s2010 Annual Report on Intellectual Property Cases incorporatedthe ten major cases and fifty typical cases relating to the judicialprotection of intellectual property by Chinese courts in 2010. Otherhigh people’s courts such as those of Beijing, Tianjin, Chongqing,Shandong, Anhui, Fujian, Jiangxi, Hunan, Sichuan, Shanxi,Heilongjiang, Guangdong, Guangxi, Gansu and Guizhou, thatpublished their local typical cases made an on-going effort toimprove on the typical case guidance system.

 

IV. Strengthened the adjudication team andfocused on quality

 

A strong team of adjudicators is critical for adjudicationquality. In 2011, capacity-building at the people’s courts of alllevels was carried out under the initiative of “Party-building inservice of capacity building for quality judgement”. The aim was toimprove the overall quality of our team of judges. Our intellectualproperty judges were fully committed to cultivating a robust courtculture and to improving their personal legal culture capacity, so asto develop a sound culture in the administration of intellectualproperty justice.

 

—Strengthened development of a court culture, andestablished a positive professional image of intellectualproperty judges.

 

A judicial culture was being fostered to stimulate the mind andbroaden the vision of intellectual property judges, and to enhancetheir professional conduct and humanistic qualities. Anatmosphere of learning and advancement was created to cultivate aprofessional image of fairness, honesty and care for the people forintellectual property judges.

 

—Developed learning-based trial courts and improvedthe political and professional qualities of intellectualproperty judges.

 

The people’s courts of all levels applied themselves to buildinglearning-based intellectual property courts that have both politicalawareness and professional knowledge. The educational emphasiswas on strengthening the core values of “loyalty, care for the people,justice and honesty” set for all officers of justice. The judgesbroadened their learning in the areas of applied jurisprudence andsought innovative learning methods. The courts organised regularcourses on the latest developments in applied jurisprudence, so asto adapt to the impact of the declared formation of the Chinesesocialistic legal system on how the people’s courts protectintellectual property.

 

—Organised two thematic activities to consolidate theconcept of socialist rule of law.

 

The people’s courts organised a thematic activity entitled“People’s Judge for the People” under a thematic educationalactivity organised by the CPC Central Political and LegalCommittee, called “Advance Our Tradition, Strengthen Our Belief,Enforce for Our People”. As required by the CPC Central Politicaland Legal Committee and the SPC, the activities focused onParty-building and judicial conduct. The activities were based onthe practice of intellectual property adjudication and revolvedaround organisational leadership and delivery of work results, soas to ensure that both activities achieved the desired outcomes.Part of the activity curriculum was to improve on the judicialconduct of intellectual property judges, such that judges wouldadhere to the Party’s mass line, and broaden theirpeople-perspective. Debates on people’s demands were organizedto ingrain the people-perspective in judges’ minds. The activitiestried to develop a spirit of honesty in the intellectual propertyjustice system and implement the central concept of “people beingthe basis and governing for the people”. Intellectual propertyjudges were urged to observe honesty, integrity and self-discipline.—Organised professional training and education forintellectual property judges and improved the overallquality of the intellectual property team.

 

SPC and the high people’s courts have organised various formsof training to improve the judicial abilities of intellectual propertyjudges. The people’s courts of all levels have implemented theeducation and guiding principles of “one goal (‘rule of law’), twoshifts (‘from theory to practice, from knowledge to ability’) andthree approaches (‘judges being trainers’, ‘case-based education’,and ‘field education’)” in training intellectual property judges, andhave adhered to the SPC’s 2011-2015 Education and Training Planfor National Courts to continue to improve the content ofintellectual property training, develop innovative methods fortraining intellectual property adjudication skills, and better thequality of training in intellectual property adjudication.SPC has organised national training in intellectual propertyadjudication to strengthen understanding of judicial policies andthe socialist rule of law concept, and to facilitate discussions onimportant concepts of intellectual property justice. This will honethe judicial skills of intellectual property judges, and as a result,elevate the level of judicial protection for intellectual property.Together with the United States Agency for InternationalDevelopment and the Asia Foundation, SPC also organised the firstNational Workshop for Chief Judges of Intellectual PropertyDivisions. More than 230 chief judges of intellectual propertydivisions from all levels of the people’s courts participated. Theone-week workshop covered macro and meso topics as judicialconcepts of intellectual property, judicial policies and basic legalsystem.

 

Conclusion

 

In 2011, our judges for intellectual property cases adopted anopen and innovative approach, and worked tirelessly to achieveimpressive results. 2012 will be a year when they will strive withgreater confidence and will accomplish greater success.2012 is a year of special significance for China, as this is theyear of the 18th National Congress of the Communist Party. Forintellectual property-related judicial matters, the people’s courtswill continue to focus on adjudication, so as to fulfil its objective to“serve the overall interests; deliver justice for the people”. Thecourts will seek depth, results and improvement in their work toaddress emerging situations and new challenges and to fulfil theheavy task of judicial intellectual property protection. The courtswill tighten research and pursue judicial activism to facilitatecreation of an innovative intellectual property adjudication system,and to achieve better legal and social outcomes. The courts willpromote cooperation with enforcement authorities for moreeffective action against intellectual property crimes, to ensure faircompetition necessary for a good market-based economic order.The courts will improve capacity-building by developingeducational activities that focus on the core values of “loyalty, carefor the people, justice, honesty” set for all officers of justice toguide professional conduct. The courts will strive for progress anda greater contribution to the development of intellectual propertyadjudication.

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