Judicial Interpretation [2018] No. 21
Provisions of the Supreme People's Court on Several Issues concerning the Application of Law in Reviewing Act Preservation Cases involving Intellectual Property Disputes
(Adopted at the 1755th meeting of the Judicial Committee of the Supreme People's Court on November 26, 2018, and coming into force on January 01, 2019)

These Provisions are formulated in accordance with the Civil Procedure Law of the People's Republic of China, the Patent Law of the People's Republic of China, the Trademark Law of the People's Republic of China, the Copyright Law of the People's Republic of China and other laws and regulations and in combination with the actual conditions in trial and enforcement practice, in order to correctly review act preservation cases involving intellectual property disputes and protect the legitimate rights and interests of the parties concerned in a timely and effective manner.

Article 1 For the purpose of these Provisions, “intellectual property disputes” mean the intellectual property and competition disputes in the Provisions on Causes of Action of Civil Cases.

Article 2 Where a party in an intellectual property dispute applies for act preservation in accordance with Article 100 or Article 101 of the Civil Procedure Law before the judgment, ruling or arbitral award takes effect, the people's court shall accept the application.
Where a licensee under an intellectual property licensing contract applies for the issuance of a pre-litigation order to stop intellectual property infringement, the licensee under an exclusive licensing contract may file an application in its own name with the people's court; the licensee under a sole licensing contract may file an application in its own name if the right holder does not file any application; the licensee under a general licensing contract may file an application in its own name upon specific authorization by the right holder.

Article 3 An application for pre-litigation act preservation shall be filed with the people's court with jurisdiction over the corresponding intellectual property dispute at the domicile of the respondent or the people's court with jurisdiction over the case.
Where the parties concerned agree to arbitration, they shall apply to the people's court prescribed in the preceding paragraph for act preservation.

Article 4 To apply to the people's court for act preservation, an application and corresponding evidence shall be submitted. The application shall specify the following items:
(1) the identities, addresses for service, and contact information of the applicant and the respondent;
(2) the content and time limit of the act preservation measures applied for;
(3) the fact and reason for the application, including the specific explanation that the applicant's behavior will cause irreparable damage to the legitimate rights and interests of the applicant, or cause difficulty in the enforcement of the ruling for the case, or cause other damages;
(4) information or credit certificate on the property provided as a security for act preservation, or reasons for unnecessary provision of security; and
(5) other items that need to be specified.

Article 5 Before deciding to take act preservation measures, the people's court shall inquire with the applicant and the respondent, except where the situation is urgent or the inquiry may affect the implementation of the preservation measures.
Where the people's court rules to take act preservation measures or reject an application, it shall serve the applicant and the respondent with the ruling. If serving the respondent with the ruling may affect the adoption of preservation measures, the people's court may serve the respondent with the ruling no later than five days after taking the preservation measures.
If a party applies for act preservation during the arbitration process, the application, notice of acceptance of the arbitration case and other relevant materials shall be submitted to the people's court through the arbitration institution. Where the people's court rules to take act preservation measures or reject the application, it shall serve the party with the ruling and notify the arbitration institution.

Article 6 In any of the following circumstances, if not taking act preservation measures immediately is sufficient to damage the applicant’s interests, it shall be determined that the situation is "urgent" as stipulated in Articles 100 and 101 of the Civil Procedure Law:
(1) the applicant's business secrets are about to be illegally disclosed;
(2) the applicant's right of publication, right of privacy and other personal rights are about to be infringed;
(3) the intellectual property rights in dispute are about to be illegally disposed of;
(4) the applicant's intellectual property rights are being or are about to be infringed upon in a time-sensitive context such as a trade show;
(5) time-sensitive hit shows are being or are about to be infringed upon; and
(6) other situations where act preservation measures need to be taken.

Article 7 When reviewing an application for act preservation, the people's court shall comprehensively consider the following factors:
(1) whether the applicant's request has a factual basis and legal basis, including whether the validity of the intellectual property rights for which protection is requested is stable;
(2) whether failure to take act preservation measures will cause irreparable damage to the applicant’s legitimate rights and interests or make it difficult to enforce the ruling of the case;
(3) whether the damage caused to the applicant by not taking act preservation measures exceeds the damage caused to the respondent by taking act preservation measures;
(4) whether the adoption of act preservation measures harms public interests; and
(5) other factors which need to be considered.

Article 8 When reviewing and judging whether the validity of the intellectual property right for which protection is requested by the applicant is stable, the people's court shall comprehensively consider the following factors:
(1) the type or attribute of the right in question;
(2) whether the right in question have been substantively examined;
(3) whether the right in question is in the process of being declared invalid or revoked and the possibility of being declared invalid or revoked;
(4) whether there is a dispute over the ownership of the right in question; and
(5) other factors that may cause instability of the validity of the right in question.

Article 9 Where an applicant applies for act preservation on the basis of a utility model or a design patent, it shall submit a search report or a patent evaluation report made by the patent administration department under the State Council, or a decision of the Patent Reexamination Board on maintaining the validity of the patent. If the applicant refuses to submit without justifiable reasons, the people's court shall rule to reject its application.

Article 10 In act preservation cases involving intellectual property and unfair competition disputes, under any of the following circumstances, it shall be determined to be "irreparable damage" stipulated in Article 101 of the Civil Procedure Law:
(1) the respondent's conduct will infringe upon the applicant's goodwill or personal rights such as the right of publication or right of privacy, and cause irreparable damage;
(2) the respondent's conduct will make the infringement uncontrollable and significantly increase the damage to the applicant;
(3) the infringing behavior of the respondent will lead to a significant reduction in the relevant market share of the applicant; and
(4) other irreparable damages are caused to the applicant.

Article 11 An applicant applying for act preservation shall provide a security in accordance with the law.
The amount of security provided by the applicant shall be equivalent to the possible losses suffered by the respondent due to the implementation of the act preservation measures, including reasonable losses such as sales revenue and storage costs of the products involved in the order to stop the infringement.
In the process of implementing act preservation measures, if the loss that the respondent may suffer therefrom exceeds the amount of security provided by the applicant, the people's court may order the applicant to add a corresponding security. If the applicant refuses to do so, a ruling may be made to remove or partially remove the preservation measures.

Article 12 The act preservation measures adopted by the people's court generally shall not be cancelled for a security provided by the respondent, unless the applicant agrees.

Article 13 Where the people's court rules to adopt act preservation measures, it shall reasonably determine the time limit for the preservation measures based on the applicant's request or the specific circumstances of the case and other factors.
The validity of the ruling to stop the infringement of intellectual property rights shall generally be maintained until the judgment of the case takes effect.
The people's court may rule to continue taking preservation measures based on the applicant's request and additional securities, etc. Where the applicant requests the renewal of the preservation measures, such request should be made within seven days before the expiration of the time limit.

Article 14 Where a party refuses to accept the act preservation ruling and applies for reconsideration, the people's court shall review and make a ruling within ten days after receiving the application for reconsideration.

Article 15 A people's court which takes act preservation methods and measures shall handle them in accordance with the relevant provisions of the enforcement procedure.

Article 16 Under any of the following circumstances, it shall be deemed that "the application is erroneous " as stipulated in Article 105 of the Civil Procedure Law:
(1) the applicant fails to institute a lawsuit or apply for arbitration within 30 days after act preservation measures are taken;
(2) the act preservation measures are improper from the beginning for the reason that the intellectual property rights for which protection is requested are declared invalid or for other reasons;
(3) an application for ordering the respondent to stop infringing intellectual property rights or unfair competition is made, but the effective judgment determines that infringement or unfair competition is not established; and
(4) other circumstances where the application is erroneous.

Article 17 Where a party applies for the cancellation of act preservation measures, after receiving and reviewing the application, the people's court shall rule to cancel the act preservation within five days if the circumstances specified in Article 166 of the "Interpretations of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China” are met.
Where the applicant withdraws the application for act preservation or applies for the cancellation of act preservation measures, the liability for compensation stipulated in Article 105 of the Civil Procedure Law shall not be exempted accordingly.

Article 18 Where the respondent initiates a compensation lawsuit in accordance with Article 105 of the Civil Procedure Law, if the applicant fails to institute a lawsuit after applying for pre-litigation act preservation or the parties agree to arbitration, the people's court that takes preservation measures shall have jurisdiction over the compensation lawsuit; if the applicant has instituted a legal action, the compensation lawsuit shall be under the jurisdiction of the people's court that accepts the action.

Article 19 Where an applicant applies for act preservation and property preservation or evidence preservation at the same time, the people's court shall review respectively whether the different types of preservation applications meet the conditions according to the law, and make a ruling.
In order to prevent the respondent from transferring property, destroying evidence, etc., which would make the purpose of preservation impossible to achieve, the people's court may decide the execution order of different types of preservation measures according to the specific circumstances of the case.

Article 20 An applicant applying for act preservation shall pay the application fee in accordance with the provisions of the "Measures on the Payment of Litigation Fees" on application for act preservation measures.

Article 21 These Provisions shall come into force on January 01, 2019. If the relevant judicial interpretations previously issued by the Supreme People’s Court are inconsistent with these provisions, these provisions shall prevail.