Resources
Apr 22,2020
Newsletter n° 3 News: IP ∣ SPC Releases Draft Documents for the Enforcement of Intellectual Property Judgments, Soliciting Public Opinions
Total word count:2830
On March 15, 2020, the Supreme People's Court, in response to the Sino-American trade agreement signed in January 2020, issued a notice, soliciting public opinions on two documents: its Implementation Plan for the Enforcement of Intellectual Property Judgments and a Guide for the Enforcement of Intellectual Property Judgments. The deadline for comments is May 15, 2020.
The draft Implementation Plan proposes two encouraging measures regarding information disclosure of the enforcement of judgments: (1) a dedicated section of "disclosure of the enforcement of intellectual property judgments" is to be created and incorporated in the China Enforcement Information Disclosure Network at https://zxgk.court.gov.cn before the end of June 2020, and (2) a quarterly report compiling the national statistics (numbers, categories, status quo, among others) of the enforcement cases of intellectual property judgments will be released within two months after the end of each quarter.
The draft Guide, which consists of 27 articles, is basically a compilation of existing laws and regulations pertaining to the enforcement of judgments, without introducing any new measures.
The draft Guide provides among others, the following measures:
In practice, there are two more remedies available to enforce a judgment in China.
Comment
Effective enforcement of judgment is an issue of strong technicality.
The promulgation of the SPC’s two documents on enforcement of intellectual property judgments may serve as an opportunity, for the judiciary, to review the entire enforcement regime, so as to bring further clarity and simplification to the procedure as well as the procedure of bankruptcy.
As far as it goes, pre-trial preservation of assets works best and as the proverb goes, better early than late, better late than never.
The draft Implementation Plan proposes two encouraging measures regarding information disclosure of the enforcement of judgments: (1) a dedicated section of "disclosure of the enforcement of intellectual property judgments" is to be created and incorporated in the China Enforcement Information Disclosure Network at https://zxgk.court.gov.cn before the end of June 2020, and (2) a quarterly report compiling the national statistics (numbers, categories, status quo, among others) of the enforcement cases of intellectual property judgments will be released within two months after the end of each quarter.
The draft Guide, which consists of 27 articles, is basically a compilation of existing laws and regulations pertaining to the enforcement of judgments, without introducing any new measures.
The draft Guide provides among others, the following measures:
- Pre-trial property preservation: irreparable damages must be proved and a bond equivalent to the amount requested for preservation shall be posted;
- Property preservation during a civil proceeding is much easier to obtain, which requires, inter alia, posting of a bond not exceed 30% of the amount requested for preservation;
- During the enforcement proceeding, the IPR owner may request that court initiate investigation over funds, movable property, real estate and any other properties owned by the person/organization, which is subject to a court decision being enforced, through the Chinese courts’ network-enforcement enquiry system.
- The IPR owner could also leverage other indirect measures to pressurize the infringers into complying with the court decisions: (1) apply for restrictive consumption measures making services that are unnecessary for living or business no longer accessible to the infringers; (2) request that the court restrict the infringers from going abroad; and (3) request that the infringers being included in the list of discredited persons/organisations.
In practice, there are two more remedies available to enforce a judgment in China.
- In case the shareholders of the company being enforced did not fulfill their obligation of capital contribution, the IPR owner can ask the court to order these shareholders to bear joint liability of the infringement;
- In case the company being enforced is confirmed of insolvency, the IPR owner can also ask the court to convert the enforcement procedure to the bankruptcy procedure.
Comment
Effective enforcement of judgment is an issue of strong technicality.
The promulgation of the SPC’s two documents on enforcement of intellectual property judgments may serve as an opportunity, for the judiciary, to review the entire enforcement regime, so as to bring further clarity and simplification to the procedure as well as the procedure of bankruptcy.
As far as it goes, pre-trial preservation of assets works best and as the proverb goes, better early than late, better late than never.
Contributed by: Zhigang Zhu