Monday, May 5, 2014

Preliminary injunctions in China

I discuss the topic of preliminary injunctions in China in my book at pages 351-52.  Two of the blogs I read on a regular basis recently published some interesting updates on the topic. 

First, on the Kluwer Patent Blog, Benjamin Bai published a post titled Preliminary Injunctions in China:  The Pendulum Has Swung Back!, which provides an overview of the procedure and standards for granting preliminary injunctions, as well as how the courts have applied the law over the past decade or so.  According to Mr. Bai, preliminary injunctions in China can be divided into two types: pre-suit injunctions, which must be decided within 48 hours, and in-suit injunctions, which a court grant during the course of a pending action.  In November 2013, the Beijing Third Intermediate Court enforced a pre-suit injunction for the first time ever in a patent case, in a matter involving a design patent owned by Abbott Laboratories.  Two months later the Beijing Second Intermediate Court enforced an in-suit injunction against a generic drug company's "cross-label use" in a case involving a method patent owned by Novartis.  Mr. Bai also discusses China's first-ever pre-suit injunction in a trade secret matter, which was issued by the Shanghai Intermediate Court in January 2014; and (briefly) the first in-suit injunction issued in a trade secret case last year, on behalf of Eli Lilly.  (For previous mention of the Eli Lilly case on this blog, see here and here.)

Second, on the China IPR Blog, Mark Cohen has published a post titled What the Supreme People's Court Data for 2013 Shows.  The blog discusses the Court's White Paper Intellectual Property Protection by Chinese Courts in 2013, which provides statistics on IP litigation in China.  (The Court publishes a report of this nature every year.  Here is the link to the English-language translation of the newly-issued report. )  On preliminary injunctions in particular, the White Paper states:
The courts have accepted 11 cases involving application for preliminary injunction relating to intellectual property disputes; 77.78% were granted approvals. 173 applications for pre-trial preservation of evidence were accepted, and 97.63% were granted approval, which have reduced the burden of proof on the parties concerned. 47 applications for pre-trial preservation of property were accepted, and 96.97% approved.

For example, in the computer software copyright infringement case of Microsoft vs. e-Future Information Technology Inc., where e-Future was alleged to have infringed upon Microsoft’s Microsoft Office series of software, Microsoft had applied for pre-trial preservation of evidence and its application approved. The case was handled by the Wuhan Intermediate People’s Court at Hubei Province. The court approved preservation of the facts of infringement. Subsequently, the respondent accepted the court’s decision and did not continue with the suit.
High profile cases include: Hunan Keliyuan New Energy Co., Ltd vs. Ailantian High Technology Materials (Dalian) Co., Ltd, involving infringement of invention patent; Foshan Haitian Flavouring and Food Company Ltd vs. Foshan Gaoming Wei Pole Condiments Limited involving trademark infringement and unfair competition; Baidu Online Network Technology (Beijing) Co., Ltd etc. vs. Beijing Qihoo Technology Ltd, involving unfair competition; Tsuburaya Productions Co., Ltd etc. vs. Shanghai Audio & Video Publishing House, involving copyright infringement; SI Group Inc. etc. vs. Sino Legend (Zhangjiagang) Chemical Co., Ltd etc., involving trade secrets dispute; Fujian Chaoda Modern Seed Industry Co.,Ltd vs. Rice Research Institute of the Anhui Academy of Agricultural Sciences, involving determination of invalidity claims of a licensing agreement on plant breeders’ rights etc.
Citing these statistics, Mr. Cohen writes:
Of course, one might ask if approval rates for provisional measures are so high, why then are applications for preliminary injunctions only about .01% of the total of disposed cases? The answer seems to be that cases are being rejected in the Case Filing Division of the courts, as I have previously discussed (   Still there have been some positive signs: the Civil Procedure Law amendments provide for a more expanded role for the courts, the courts granted provisional measures in trade secret cases, and Beijing’s newly established in Beijing Third Intermediate Court, which has jurisdiction over the Beijing headquarters of many multinationals and a large foreign docket,  may also be playing an active role.
This is very interesting information, and together Mr. Bai's and Mr. Cohen's posts nicely complement one another--except for one matter that initially didn't make sense to me.  Under the heading "PI Statistics," Mr. Bai writes:
Generally speaking, most IP suits in China do not involve an application for a PI. The following statistics are a snapshot for 2010-13.
While the grant rate is rather high among those who sought a pre-suit injunction, the overwhelming majority of the IP cases do not get the benefit of pre-suit injunctions. Only clear cases of infringement are likely to get a pre-suit injunction, assuming other requirements, such as irreparable harm and adequate bond, are met. There are no statistics for in-suit injunctions; but it is safe to assume that they are similar to pre-suit injunctions.
Mr. Bai's numbers for pre-suit injunctions requested for 2010, 2011, and 2012, are all identical to the numbers reported in the 2010, 2011, and 2012 White Papers, and his numbers for IP cases filed in 2010, 2011, 2012, and 2013 are identical to the numbers reported in the 2010, 2011, 2012, and 2013 White Papers.  So what explains the discrepancy between the 2013 White Paper's statement that 11 requests were made in 2013, and Mr. Bai's statement that 110 were made?

I suspect that the 2013 White Paper--both the translation and the Chinese original--simply inadvertently omitted  a "0" after "11".  If you think about it, it would be pretty odd if at the same time China was liberalizing its practice of granting preliminary injunctions the numbers requested should fall from 27 to 11.  Moreover, if there really only were 11 requests made, the White Paper's reported grant rate of 77.8% would mean that there were 8.5558 grants, which doesn't make a lot of sense; whereas 85 out of 110 comes to a 77.3% grant rate, as reported by Mr. Bai.   So if I had to hazard a guess, it would be that there were 110 requests last year, not 11, which though still a tiny percentage of all cases filed is not quite as tiny as one might have assumed.

1 comment:

  1. the Beijing Third Intermediate Court enforced a pre-suit injunction for the first time ever in a patent case, in a matter involving a design patent owned by Abbott Laboratories. Mandarin Interpreter