Supreme Court Issues Notice on Limited Discovery in Property Cases

Additionally, on December 30, 2006 China's Supreme Court issued a new set of regulations to improve the effectiveness of enforcing the court's rulings. These Regulations state that courts may levy judgment against a debtor's income, bank deposits, securities, real estate, vehicles, machinery equipment, intangible assets, such as intellectual property, investment interests, and creditor's rights. The Regulations are applicable to all level of courts. The main points stipulate that there is a time limit of six months for executing court rulings involving property. Applications to defer enforcement must be submitted to the SPC five days ahead of the deadline, and court officials should instruct the parties concerned to report and register their properties within three days of receiving a ruling. It also states that courts should take prompt measures to prevent relevant parties from transferring, hiding, selling or damaging property during the enforcement period, and courts are asked to verify the compliance of the registered properties within five days.

The regulations go on to state that for those who cannot provide evidence, courts should start an investigation 10 days after submission of an application,and a court is also obliged to host public hearings (however, at the court's discretion) if the party that applies to enforce a ruling is not satisfied with the enforcement result, and finally, that all the legal documents and related materials produced during the enforcement period, except those involving state or commercial secrets, shall be made available to the parties concerned for reference and copying.

China to Impose Stricter Penalties for IPR Violations

China's Supreme People's Court issued a notice in January 2007 ordering stricter penalties on IPR violators. According to the notice all illegal gains and manufacturing tools of IPR violators shall be confiscated and their pirated products shall be destroyed. The notice also said courts shall impose fines large enough to strip pirates of their ability to resume production of illegal copies. The Supreme People's Court and the Supreme People's Procuratorate jointly released a judicial interpretation at the end of 2004 decreeing that counterfeiters could be sentenced up to seven years in prison. Criminal penalties will be imposed on people earning an illegal income of more than 30,000 yuan (3,700 U.S. dollars), or producing more than 1,000 pirated copies, according to the interpretation.

Patents

More Courts Allowed to Handle Patent Cases

The Supreme People's Court has also announced that twenty-five Intermediate People's Courts were endowed with jurisdiction over first-instance trials of patent disputes. Intermediate People's Courts in provincial capitals, autonomous regions and municipalities, are also competent courts of primary jurisdiction. According to Civil Procedure Law, the jurisdiction of first instance >over patent cases is limited to the intermediate courts located at provincial capitals and some developed cities. The jur>isdiction of first instance over copyright and trademark cases is limited to the intermediate courts and the higher court may designate some district courts to handle with copyright and trademark cases. As of November 22, 2006, first-instance courts for patent dispute cases have increased to fifty-nine.

Third Revision Drafted for Patent Law

Finally, the Patent Law is being revised for the third time after it was promulgated in 1985 and amended in 1992 and 2000. Draft amendments to the law were handed to the State Council for deliberation on December 27, 2006, according to the State Intellectual Property Office, which was in charge of drafting the amendments. About half the current 69 clauses have been changed in the draft. The draft amends the novelty standard and design patent. It also incorporates infringement determination standards, strengthens patent protection, extends the scope of patent infringement exemptions and further clarifies stipulations on compulsory licenses.

3. Policy and Planning

IPR Development in National Plan

For the first time an IPR development program has been incorporated into national planning. The 11th Five-Year-Plan includes an IPR plan, highlighting IPR's role in promoting social and economic growth. The draft of the IPR development program for 2006-2010 has been submitted to the State Council for approval in January 2007, and will be made public soon, according to the State Intellectual Property Office.

Easier Market Entry for Chain Stores

China has also lowered the threshold to opening chain stores that specialize in audio or visual products. According to Measures on the Administration of Wholesale, Retail and Lease of Audio and Video Products that came into effect on December 1, 2006, the government requires registered capital of a minimum of 5 million yuan (about $41,000 U.S. dollars) to open nationwide chain stores for audio and video products, instead of the 30 million yuan previously required. The government has also simplified procedures for chain store outlets to start business as a way to cut circulation cost.

II. Taiwan

I. Litigation and Enforcement

New IPR Courts

The Judicial Yuan's proposal to create a separate court system of Intellectual Property Courts has been passed by Taiwan's Legislature. The new court system, long desired by foreign companies, will be established this year. The new courts will have judges who specialize in Intellectual Property, and presumably value intellectual property more highly that judges in other, general courts. The change should also help speed up intellectual property litigation, as the specialist judges should be more experienced and more confident to make decisions. There will also be a separate IPR Public Prosecutor's Office created. The move is seen as a significant improvement, as IP rights holders should be able to command immediate attention for their complaints, rather than waiting for Prosecutors to handle violent crimes before they have time for IP cases.

Changes to Patent and Trademark Appeals

Taiwan's Intellectual Property Office (â??TIPOâ??) will revise and simplify its appeals process for its administrative cases. In the future, patent and trademark appeals to the TIPO, for example in opposition or cancellation cases, will be reviewed by a panel of examiners, rather than a single examiner. In addition, appeals cases will be handled as disputes between two private parties, rather than as between the TIPO and the appellant. In the past, a party opposing a trademark registration, for example, was essentially taking action against the TIPO. The TIPO had no obligation to keep the opposer informed as to the response and position of the trademark applicant. Under the new structure, parties filing or appealing an opposition or cancellation will have the right to know more about the opposing parties' arguments and deadlines, and to take a more active role in the process.