In 2017, Shanghai courts, giving a full play to their leading role in judicial protection of IP (hereinafter referred to as IP) rights and conscientiously implementing the judicial policy of “Primacy of the judiciary, strict enforcement of law, differentiated measures, and proportionality” heard various IP cases in a fair and efficient manner, and kept improving the judicial protection mechanism of IP rights and deepening foreign exchanges and cooperation. By doing so, new achievements have been made in the judicial protection of IP rights, providing powerful judicial services and guarantees for promoting the innovation-driven development of Shanghai, and speeding up the construction of a scientific and technological innovation center with global influence and a first-class business environment with international competitiveness.
I. General Situation of IP Cases
(1) A record high of received and concluded cases.
In 2017, there was a significant rise in the total amount of civil, administrative and criminal cases regarding IP received and concluded by Shanghai courts, with 15,809 received and 15,715 concluded, up 40.76% and 38.47% respectively from the previous year (See Figure 1).
（ Figure 1: Comparisons of IP cases received and concluded by Shanghai courts between 2016 and 2017 )
Among them, 14,270 IP cases of first instance were received and 14,199 of them were concluded, representing an increase of 42.76% and 40.96% respectively over the same period from the previous year.The recent two years has witnessed a surge in the number of civil cases regarding IP. In 2017, Shanghai courts received 14,091 civil cases regarding IP of first instance, and concluded 13,961 of them, up 43.98% and 41.56% respectively from the previous year; received 1,417 civil cases regarding IP of second instance and concluded 1,399 of them, up 18.08% and 11.83% respectively from the previous year (See Figure 2).
（ Figure 2: Comparisons of civil IP cases received and concluded by Shanghai courts between 2015 and 2017）
(2) Good quality and efficiency of trials.
Despite the marked growth in the number of cases received and the shortage of manpower for case handling, the courts across the city have generally maintained the good quality and efficiency of trials. The rate of concluded cases in the same period was 99.41%; the withdrawal and mediation rate of civil cases was 76.31%, up 3.23% compared with a year earlier; and the number of cases concluded by judges was 194 per capita, up 19.58% compared with a year earlier. The rate of willingly accepting the judgments of cases of first instance reached 89.83%, up 1.77% compared with a year earlier; the rate of concluded cases within the statutory trial term limit was 98.03%, up 0.81% compared with a year earlier.
(3) Fruitful high-quality cases.
Shanghai courts continued to achieve good results in the high-quality IP cases. The copyright infringement case of Yicha Online Corporation and Yu Dong was selected as one of the “Top Ten Cases on Judicial Protection of IP Rights in the Courts of China in 2017”; the Trademark Infringement Case of Les Domaines Barons de Rothschild v. Shanghai Baochun Industrial Development Co., Ltd., Baozheng (Shanghai) Supply Chain Management Corporation , the malicious Filing of Damage litigation infringement case of Sino Legend (China) Cheical Co.,Ltd v. Si Group (Shanghai) Co.,Ltd, the administrative review decision case of Jaguar Land Rover (china) Investment Co., Ltd. v. Pudong New Area District Market Supervision Administration of Shanghai Municipality and Pudong New Area People’s Government of Shanghai Municipality, were selected as the “50 Typical Cases on Judicial Protection of IP Rights in the Courts of China in 2017.” The dispute of Shanghai Pafuluo Stationery Co., Ltd. v. Shanghai Yixiang Stationery Co., Ltd. and Picasso International Business Co., Ltd. over the trademark license contract, and the dispute of Vitoria's Secret Store Brand Management Company v. Shanghai Mice Investment Management Co., Ltd. over the infringement of trademark and unfair competition were respectively published in the second and eighth issue of the Gazette of the Supreme People's Court in 2017.
(4) Features of Cases
a. A significant growth in the number of disputes of copyright, unfair competition, franchise contracts and technology contracts, and of administrative IP cases. In 2017, Shanghai courts received altogether 11,713 copyright cases of first instance, up 58.54% from the previous year; 7,323, or 62.52% of them were disputes over the infringement of the information network transmission right of works, up 41.70% from the previous year, indicating that despite the prosperity in Shanghai's cultural creativity industry and network information industry, there are risks and challenges in the protection and management of copyright. The number of unfair competition cases of first instance received was 194, up 40.58% from the same period, suggesting the urgent need of imposing regulations on the competition behaviors in the market as business models keep innovating and market activities become increasingly active. 370 franchise contracts cases of first instance were received, an increase of 25% over the previous year, indicating that there are still many rule-breaking operations in the franchise business model. 104 technology contracts cases of first instance were received, up 11.83% from the previous year, indicating that the promotion of the construction of a scientific and technological innovation center in Shanghai has intensified the demand for the protection of technological innovation. 15 administrative cases regarding IP of first instance were received, an increase of 9 over the same period, indicating that the leading role of judicial protection of IP has become increasingly prominent, and the judicial review and supervision over the administrative enforcement concerning IP rights has been further strengthened.
（Figure 3: Types of civil IP cases of first instance received by Shanghai courts in 2017）
b. A decline in the number of cases of trademarks, patents and of criminal IP cases . In 2017, Shanghai courts received 1,229 trademark cases of first instance, down 4.51% from the same period; 446 patent cases of first instance, down 17.71% year-on-year, and 22 of those were patent application disputes, down 15.38% year-on-year; and 164 criminal IP case of first instance, down 7.87% from the previous year. Such declines indicate that trademark infringement and patent infringement have been effectively restrained with the enhancement of IP protection and the increasing awareness of IP protection in all walks of life in recent years.
（ Figure 4: Comparison of of all types of IP cases of first instance received by Shanghai courts between 2016 and 2017）
c. A large number of cases involving a large dispute amount. In 2017, in civil IP cases, there were 43 involving a dispute amount of more than RMB 5 million and less than RMB 10 million; 41 involving a dispute amount of more than RMB 10 million and less than RMB 100 million; and 4 involving a dispute amount of more than RMB 100 million. Among them, the dispute over the copyright license contract of Hongwu Singapore Private Limited v. HQ Link Pte Ltd., Qifei International Development Co., Ltd. et. al., which was designated by the Shanghai High People's Court to Shanghai IP Court, involved a dispute amount of RMB 1 billion.
d. A large number of new types of cases.
In 2017, Shanghai courts tried a large number of new cases and some of them were first cases across the country. They mainly include: the dispute over infringement of copyright and trademark and over unfair competition which involved Shanghai Zhaouc Information & Technology Co., Ltd. v. Guangzhou Hugenstar Information & Technology Co., Ltd., the first case in China which decided that the whole picture of the role playing network game shall be protected in general as a work created in a way similar to cineatography; the dispute over unfair competition of Zhejiang Taobao Network Co. Ltd. v. Shanghai Zaihe Network Technology Co., Ltd. v. Zaixin Software (Shanghai) Co., Ltd., the first dispute over unfair competition of online shopping assistants in China; and the dispute over unfair competition of Beijing Iqiyi Technology Co., Ltd. v. Beijing Sogou Information Service Co., Ltd. et. al., which involved the judgment of legitimacy of “search candidate words” in the input method system, a new issue raised by technological development in the field of competition law.
e. A large number of cases with great social influence.
In 2017, Shanghai courts tried a number of major IP cases involving well-known multinational companies and famous trademarks. For example, the of first instance dispute over trademark infringement and unfair competition of Shanghai Gotop Semiconductor Co., Ltd. v. Qualcomm Incorporated, tried and concluded by Shanghai High People's Court, attracted enormous attention and was called the “No. 1 IP Case” in China following the iPad trademark dispute concerning Apple Corp and Proview. The dispute over infringement of patent right of Hu Tao v. Mobike (Beijing) Information Technology Co., Ltd., tried by Shanghai IP Court for the first instance and by Shanghai High People's Court for the second instance , draw much attention and had a great social impact for its involvement of QR coded identification and unlocking patents on sharing bicycles. The case of Jaguar Land Rover (China) Investment Co., Ltd. against the decision on administrative penalty of the Pudong Market Supervision Bureau and the decision on administrative review of the government of Pudong New Area District, tried by the Pudong New Area District People's Court, is China's first administrative litigation regarding unfair competition in the free trade zone.
II. Fair and Efficient Judicature Ensured Remarkable Achievements in the IP Rights Protection
(1) Strengthened civil judicial protection and promoted innovation and fair competition.
Taking provisional protection measures in accordance with the law, Shanghai courts received and concluded 22 cases of pre-trial evidence preservation and 2 of pre-trial act preservation in 2017, fixed evidences and issued injunctions in time to effectively safeguard the legitimate rights and interests of the parties. Also, Shanghai courts increases the compensation for IP damage to accurately reflect the market value of the infringed IP rights, taking into account the subjective state of the infringer to achieve a double result focusing on compensation and supplemented by punishment. In the dispute over infringement of patent rights of Duan Youlu and Zou Hexian (the appellants) v. Shanghai Xinguang Chemical Co., Ltd. (the appellee), Shanghai High People's Court actively guided the parties to present evidences about the amount of damages, and by carefully checking the documented evidences and properly determining the profit rate of the sale of the infringed products, it calculated rather accurately the profits made by Shanghai Xinguang Chemical Co., Ltd. through the sale of the infringed products to persons not involved in the case. Accordingly, the Court changed the compensation amount of RMB 500,000 decided of the first instance to RMB some 1,400,000. In the dispute over infringement of trademark and false publicity of HUGO BOSS Trade Mark Management GmbH & Co. KG et. al. v. Shenzhen Yalan Boss Clothing Co., Ltd. et. al., the Shanghai IP Court took into consideration the reputation of the trademark BOSS of the plaintiff, the infringement scale and the subjective malice of the defendant, decided that the defendant should compensate the plaintiff for an economic loss of RMB 4,500,000, which exceeded the upper limit of legal compensation, and supported the plaintiff in claiming that the defendant should pay RMB some 340,000, the full amount of the attorney fees, according to the market price of the lawyer's work.
(2) Strengthened criminal justice protection and impose severe punishment on IP crimes.
In 2017, 140 criminal IP cases decided by Shanghai courts entered into force, involving 209 people in total. Among the penalties, 19 persons were sentenced to imprisonment from 3 to 7 years; 176 were sentenced to imprisonment for less than 3 years or criminal detention; in terms of criminal fine, 13 persons were sentenced to a single fine and 193 to additional fines. In 2017, Shanghai courts tried and concluded a number of major IP criminal cases, severely cracking down on the crimes of infringement of IP. For example, in the case of Zhu Xiaofeng counterfeiting the registered trademark, Zhu Xiaofeng, the defendant, made use of a blank license signed and affixed by the trademark holder to produce fake “Dongjin” brand batteries and sold a great deal of them to foreign countries, profiting RMB more than 10 million. The Putuo District People's Court sentenced Zhu Xiaofeng to imprisonment for five years and six months in accordance with the law and fined him RMB 5 million for the recovery of illegal income. In the case of Liu Yanchun selling products with a counterfeit registered trademark, Liu Yanchun, the defendant, was a CPPCC member of Minhang District who bought from Beijing liquors with counterfeit registered trademarks of “Kweichow Moutai” and “Wuliangye” and sold them to others, profiting over RMB 390,000. The value of the unsold liquors discovered was over RMB 490,000. The Minhang District People's Court sentenced Liu Yanchun to four years' imprisonment and a criminal fine of RMB 600,000 in accordance with the law, confiscated the infringing products and criminal tools and recovered illegal gains.
(3) Strengthened judicial review of specific administrative actions and supervised administrative enforcement regarding IP rights according to law.
Shanghai courts gave a full play to the leading role of the judiciary in the trial of administrative IP cases and supervised and supported the enforcement regarding IP in administrative organs according to law. In the case of Jaguar Land Rover Automotive Trading (Shanghai) Co., Ltd. (the plaintiff) against the decision on administrative punishment of the Market Supervision Bureau of Pudong New Area District (the defendant) and the decision on administrative review of the People's Government of Pudong New Area District (the defendant), for example, the People's Court of Pudong New Area District, after a comprehensive review of the administrative actions concerned, held that the plaintiff, as a professional operator, used non-general terms to publicize its vehicle configuration, and based on the relevant professional background of the terms and the history of the plaintiff's use of them, the public's perception of the terms would lead to misunderstandings of the configuration and performance of the products. Therefore, the publicity content constituted false advertising. Accordingly, the Court rejected the plaintiff's request for withdrawing the Decision on Administrative Punishment and the Decision on Administrative Reconsideration.
III. Give Full Play to the Judicial Functions to Serve and Guarantee the Overall Situation
(1) Served and guaranteed the construction of Shanghai scientific and technological innovation center.
The Supreme People's Court research base (Shanghai) of IP judicial protection for science and technologyl innovation was established to improve the accuracy and effectiveness of scientific and technological innovation through judicial services and guarantees; centering on the practical issues relating to service invention, the base and the Municipal Law Society jointly organized the first seminar on the scientific and technological innovation of the judicial protection of IP rights to explore how the judiciary guided and guaranteed the incentive mechanism for scientific and technological innovation talents. The area covered by services of the “Workroom of National Trial Specialist Judge Chen Huizhen” has been further expanded, radiating the high-tech industrial parks across the city. The “Workroom of National Trial Specialist Judge Ding Wenlian” has been set up to respond to the demand for the protection of IP rights in the scientific and technological innovation cluster area.
(2) Served and guaranteed the construction of the Free Trade Zone.
The role of the special collegiate panel of Shanghai IP Court has been given full play on the cases of IP rights in the free trade zone by accepting 286 cases and concluding 259 of them. The People's Court of Pudong New Area District issued the White Paper on Strengthening the Judicial Protection of IP Rights, Serving and Guaranteeing the Construction of China (Shanghai) Free Trade Pilot Zones (October 2016 - September 2017), and held the second seminar on the judicial protection of IP rights in the free trade zone.
(3) Served and guaranteed the construction of Shanghai international trade center.
In order to carry out the Construction Plan of Shanghai International Trade Center in the “13th Five-Year” Period issued by Shanghai Municipal People's Government, the Opinions on Shanghai IP Court Providing Judicial Guarantee for the Construction of Shanghai International Trade Center in the “13th Five-Year” Period was formulated to promote the system innovation in the free trade pilot zone and create a new high land for the trade system, thereby providing stronger judicial services and guarantees for the construction of Shanghai international trade center.
(4) Served and guaranteed regional economic development.
The Huangpu District People's Court properly tried the cases involving time-honored brands according to law and strengthened the protection of the IP rights of the time-honored brands by convening seminars, issuing a white paper, and holding lectures on IP rights. Taking the occasion of the 10th anniversary of the establishment of the IP division, the Yangpu District People's Court grasped judicial publicity and focused on co-construction and cooperation to provide strong judicial services and guarantees for the construction of the “three areas and one base” (namely, the national innovation area, the critical bearing area of Shanghai scientific and technological innovation center, the higher-quality central area in the international metropolis, and the national demonstration base of “universal start-up and innovation”) in Yangpu District.
IV. Kept Pioneering and Innovating to Optimize the Trial Mechanism Regarding IP rights
(1) Deepened the reform of the “three-in-one” comprehensive trial mechanism.
The Shanghai High People's Court formulated and issued the Opinions on Further Promoting the “Three-in-One” Trial of the Civil, Administrative and Criminal IP Cases, ran through the relevant documents on the implementation of the “three-in-one” trial mechanism regarding IP rights in Shanghai courts, thus directing and regulating in a more systematic way the “three-in-one” trial of IP cases in the courts across the city. Working with the Municipal Public Security Bureau and the Municipal Procuratorate, Shanghai High People's Court formulated the Provisions on Assigning Huangpu District People's Court to try the Criminal IP Cases in the Jurisdiction of Changning District to put into practice the designated jurisdiction of the cross-district criminal IP cases.
(2) Promoted the construction of a diversified dispute IP mediation mechanism.
In 2017, Shanghai IP Court, together with the six local courts in Pudong, Huangpu, Yangpu, Xuhui, Minhang and Putuo, established a diversified mediation mechanism for IP cases, and explored to set up the work modes with their own characteristics. In the process of implementation, the courts, based on the requirements in institutionalization and normalization and their own reality, developed some pertinent normative documents.
(3) Improved the diversified technical fact-finding mechanism.
Shanghai courts actively explored and improved the comprehensive application rules in relation to the technical fact investigation and finding system, which involved technical investigation, technical consulting, expert assessor and technical appraisal; formulated and issued the Hearing Rules of Technical Investigators, steadily implemented the exchange and rotation of permanent technical investigators and started the recruitment of technical investigators under appointment. In 2017, the technical investigators participated in 67 cases, appeared in court for 91 times, formed 16 technical investigation opinions and joined in 212 preservation and consultations. The construction of the technical investigator system achieved preliminary results.
(4) Promoted the construction of the judicial think-tank for IP trials.
The IP research branch of the Shanghai judiciary think-tank society was established, and experts and scholars from the Shanghai Municipal IP Office, the Shanghai International College of IP of Tongji University, the IP School of East China University of Political Science and Law, and Fudan University were employed as advisers. Also, there was the experts' meeting on promoting the construction of the think-tank and raising the level and influence of the judicial protection of IP rights. Lectures on “big data and cloud computing” were given by technical experts to the judges on IP rights in Shanghai.
(5) Increased the trial level through information construction.
The two disputes over infringement of the information network transmission right and over contracts of computer software development led to the exploration of AI auxiliary case handling through the research and development of the “Intelligent Auxiliary Case Handling System for the Civil, Commercial and Administrative Cases in Shanghai .” The city's courts explored the use of remote videos to hear IP cases and organize technical appraisal, so as to improve the efficiency of case hearing and save litigation costs. For example, the People's Court of Pudong New Area District tried and concluded 229 IP cases in 2017 through the Internet.
V. Deepened Publicity and Exchanges to Expand the Influence of IP Trials
(1) Deepened international exchanges in judicial protection of IP rights.
During the 14th Shanghai International IP Forum in December 2017, the “Chinese Courts International Exchanges Base (Shanghai) for Judicial Protection of IP Rights and the China Office of the World IP Organization jointly held an international forum on the “International Exchanges and Dispute Intermediation Mechanism in (Judicial) Protection of IP Rights.” IP judges from Belgium and South Africa, officials and arbitrators from the World IP Organization, academics from some colleges and universities in Shanghai and lawyers from the same city, and people from the Supreme People’s Court, the high people's courts in some provinces and cities, the IP courts in Beijing, Shanghai and Guangdong, ten IP divisions and other related circles discussed in depth for IP cases and the WIPO's alternative dispute intermediation of IP. The Base also received the delegation of the IP Owners Association, the Consulate General and IP officials of the United States to Shanghai, the delegation of the First Tokyo Bar Association, the delegation of the Korea Electronics Association, and the judges from the IP courts in Taiwan. Shanghai IP Court sent people to the American Chamber of Commerce in Shanghai to give lectures on judicial protection of trademarks.
(2) Strengthened the publicity of the judicature.
During the 17th World IP Day, a series of publicity activities on the IP protection were carried out in Shanghai courts and achieved successful results. Shanghai High People's Court held a press conference on the judicial protection of IP rights, in which it issued the White Paper on the Trial of IP Cases by Shanghai Courts in 2016 (in both Chinese and English versions for the first time) and the “Top ten IP cases concerning the judicial protection in Shanghai's courts in 2016”; Shanghai IP Court, the People's Court of Pudong New Area District, the Minhang District People's Court and the Huangpu District People's Court also published respectively the white paper on IP trials (the white paper on special trials) and typical cases. The courts across the city broadcast live 18 hearings through new media means such as TV, the Internet, WeChat and Weibo, and announced 20 cases in public; CCTV, People's Court Daily, China IP News and Legal Dailypublicized and covered the IP trials and typical cases in Shanghai. The city's courts also sought to extend the judicial functions through visits, seminars, moot courts, lectures, etc., so as to serve the regional innovation and development.
VI. Intensified Research and Guidance to Promote the Unification in the Applications of IP Laws.
(1) Carried out academic seminars.
In view of the new situation and new problems in the IP trials, three national professional seminars - the “Seminar on Legal Issues Related to Disputes over Franchise,” the “Research on Criminal Issues in Relation to IP Rights” and the “Seminar on Legal Issues Related to Live Broadcast of Sports Events” were organized and senior judges, scholars from colleges and universities and experts from governments were invited to have discussions and exchanges, thereby providing guidance for the trial of related cases.
(2) Unified the judicial rules.
Based on the seminar on the “Issues Concerning Copyright Infringement Involving Deep Links,” Shanghai High People's Court developed the guiding opinions on trials, promoted the transformation of the results of the seminar and further unified the judicial rules. Shanghai IP Court prepared a special report entitled Research on the Problems with the Disputes over Franchise Contracts, formulated and issued the Guidelines for the Trial of Disputes over Infringement of Trade Secrets.
(3) Strengthened research on trials.
The Reflection on and Reconstruction of Criminal Protection of IP in China, a key research bidding project for Shanghai courts was completed. Two research projects, The Status Quo of, Problems with and Countermeasures Against cases over Computer Software Development Contracts and The Inquisition of Problems with the Judicial Protection of IP Rights Relating to Animation Images in the Context of International Tourist Resorts, were evaluated as excellent research projects of Shanghai's courts in 2017. Shanghai High People's Court translated and published the Annual Reports on the IP Cases of the Supreme People's Court (2008-2015); wrote a book called Judicial Application and Trial Practice of the General Principles of Civil Law; and completed the first draft of the “Procedural Case” part in the IP Law, a book compiled by the Supreme People's Court, and wrote the IP trial in A Dictionary of Trials in China. The People's Court of Pudong New Area District assumed the task of compiling the technology contract chapter of the contract section in the civil code.
VII. Strengthened Team Building to Improve the Ability and Quality of Judges
(1) Strengthened the cultivation of well-known judges.
In 2017, Shanghai courts strove to cultivate expert and complex judges with an international vision. Zhu Dan, the president of the Chongming District People's Court, was named as a national specialist in court trials, Tang Zhen, from Shanghai High People's Court, and Li Guoquan, from the Minhang District People's Court, were rated as the specialists in court trials in Shanghai. 3 judges were sent to the United States and Australia to participate in the international academic exchange projects, such as the forum on anti-monopoly law and policy and the exchanges and study of anti-trust, to broaden the international vision and enhance the theoretic level in economics and the judicial ability in anti-trust cases. Also, the leading role of the well-known judges in building the judge team was strengthened through the establishment of a well-known judge's studio to further expand the scale and coverage caused by well-known judges.
(2) Conducted training on special business.
In order to improve the professional trial ability of IP judges in Shanghai courts, Shanghai High People's Court, relying on the “menu” training, conducted special training against the IP judges in the courts across the city, inviting experts and scholars to teach the new progress and new trends in the development of IP in China, the theories and the practical problems with the trials of anti-unfair competition, trademark and copyright, and related issues in the technology field such as the Internet and industrial development, artificial intelligence, and information security.
(3) Saw a number of advanced collectives and individuals.
The IP division of the People's Court of Pudong New Area District was rated as the national advanced collective for its work in combating infringement and counterfeits. The IP division of the Putuo District People's Court was awarded the first prize by the State Copyright Bureau for its contribution in handling cases concerning infringement and piracy, the IP divisions of the Pudong, Yangpu and Xuhui District People's Courts got the third prize. Ju Yiliang, from the Yangpu District People's Court, was awarded the title of “National Advanced Individual in Courts.” Jiang Guangrui, from Shanghai IP Court, was selected as the national advanced individual for his work in the international exchange and cooperation in courts.
2018 kicks off our efforts to put all the guiding principles from the Party’s 19th National Congress into action. It is the 40th anniversary of reform and opening-up and the 10th anniversary of the implementation of the National Strategic Outline of IP. Shanghai courts will take President Xi Jinping’s thought on socialism with Chinese characteristics for a new era as guidance and follow the spirit of 19th National Congress of the CPC and the second plenary session of the 19th CPC Central Committee. According to the Opinions on Issues Relating to Strengthening the Reform and Innovation in IP Trials, the courts will adhere to the main line of justice for the people and judicial justice, earnestly implement the judicial policy of “a leading role of justice, strict protection, policy implementation by categories, and balanced proportions,” give full play to the function of trial, deepen the judicial reform, promote the construction of the IP trial team, and further raise the authority and influence of the IP trials in Shanghai, thereby contributing more to the cause of building Shanghai into a remarkable global city and a modern international socialist metropolis with global influence!