22 March 2021
On December 10, 2020, the Supreme People’s Court promulgated the Guidelines for the Enforcement of Intellectual Property Rights Decisions (the “Guidelines”), which mainly include the following contents.
I. Specific scope of intellectual property rights (IPR) cases
IPR cases include: (1) IPR-related civil cases involving IPRs such as copyrights, trademarks, patents, technology contracts, trade secrets, new varieties of plants and integrated circuit layout designs, or those involving unfair competition, monopoly, or franchise contracts; (2) IPR-related administrative cases filed by parties before the people’s courts contesting administrative rulings rendered by an administrative agency on copyrights, trademarks, patents, technology contracts, trade secrets, new varieties of plants and integrated circuit layout designs, or unfair competition; and (3) IPR-related criminal cases involving IPR infringement as provided for under Section 7 of Chapter III of the Criminal Law of the People’s Republic of China.
II. Enforcement of IPR-related civil cases
1. Preservation during and prior to litigation
In cases where enforcement of a decision may be difficult or otherwise cause harm to a party due to a party’s actions or any other cause, the opposing party may apply for preservation on that party’s property, or for a court order to compel or enjoin that party to take certain action. The people’s court can order preservation measures on its own if necessary even if no party has petitioned for such measures. When taking preservation measures, a people’s court may order the applicant to provide security, and if the applicant fails to do so, a ruling may be issued to dismiss the petition.
If irreparable damage to the rights and interests of an interested party is imminent unless a petition for preservation is filed immediately, a party may, before filing a lawsuit, apply to the people’s court in the place where the property subject to preservation is located, the place of the domicile of the respondent, or to a people’s court of competent jurisdiction, to take preservation measures. The applicant shall provide a security for the petition, otherwise, such petition shall be dismissed.
2. Enforcement procedures and property reporting obligations
The parties are required to perform pursuant to legal documents that have entered into effect. If one party fails to do so, the opposing party may apply to a competent people’s court for enforcement. An effective civil decision, ruling, or mediation agreement shall be enforced by the people’s court of first instance, or the people’s court at the same level with the people’s court of first instance at the place where the property subject to enforcement is located. The higher people’s court at the place where an IPR court is located may designate an intermediate people’s court within its jurisdiction to enforce the first instance cases tried by the IPR court.
If an effective decision or ruling handed down by a foreign court requires recognition and enforcement by a people’s court of the People’s Republic of China, a party may directly petition the intermediate people’s court of competent jurisdiction for recognition and enforcement in the People’s Republic of China, or the foreign court may request recognition and enforcement by the people’s court in accordance with an international treaty concluded or acceded to by the People’s Republic of China, or the principle of reciprocity.
An enforcement petitioner may apply to a people’s court to compel the person subject to enforcement to report their current property holdings and changes within the past year of the receipt of the enforcement notices when the enforcement notice is received, or petition the people’s court to investigate the funds, movable property and real estate held by the person subject to enforcement through an online enforcement inquiry and control system. If the person subject to enforcement refuses to report, makes a false report or delays the reporting of his/her property situation without cause, the people’s court may include him/her in the list of persons without credit that are subject to enforcement, and may fine or detain that person his/her legal representative, the main responsible person or those directly responsible persons in the relevant entity, depending on the severity of the circumstances. If such act constitutes a crime, the criminal liability shall be pursued pursuant to law.
3. Enforcement measures
After locating the property of the person subject to enforcement, the people’s court may, as circumstances require, take measures such as attachment, seizure, freezing, transfer, sale or notification to a third party to perform due obligations. The people’s court shall not freeze the bank deposits and online funds of the person subject to the enforcement at Alipay and Tenpay for over one year, attach or seize personal property for over two years, and attach real estate or freeze other property rights, such as equity or IPRs, for over three years. If the enforcement petitioner is requesting for an extension of enforcement, the people’s court shall handle the attachment, seizure and freezing extension procedures before the measures expire, and the extension shall not exceed the periods mentioned above. The people’s court may also ex officio extend the attachment, seizure, freezing measures.
4. Enforcement relief for the parties, interested parties and non-parties
During enforcement, any party or interested party who believe that the enforcement is in violation of the law for reasons such as excessive seizure may submit a written objection to the people’s court handling the enforcement. The people’s court shall review the written objection within 15 days after the date of receipt, and if it is persuasive, a ruling may be issued to vacate or amend the enforcement order; otherwise, the people’s court will rule to dismiss the objection. The petitioner (interested) party may appeal to the higher level people’s court for reconsideration within 10 days after the date of service of the ruling.
If a non-party files a written objection to the subject of the enforcement on grounds of ownership or other substantive rights that are sufficient to prevent the transfer or delivery of the subject of enforcement, the people’s court shall review the written objection within 15 days after the date of receipt and rule to suspend the enforcement if it is persuasive; otherwise, the people’s court will rule to dismiss the objection. The non-party or party may follow the trial supervision procedure if it believes the original decision or the ruling was in error; if the matter is not related to the original decision or ruling, a lawsuit
may be brought with the people’s court within 15 days after the date of service of the ruling.
III. Enforcement of IPR administrative cases
If an administrative agency refuses to perform a payment obligation ordered by a people’s court, the other party may apply to the court for compulsory enforcement. For administrative decisions and rulings that have entered into effect, they are to be enforced by the people’s court of first instance. If the people’s court of first instance believes that special circumstances require the enforcement to be carried out by the people’s court of second instance, the second instance court may be requested to carry out the enforcement, and the second instance court may decide to carry out enforcement on its own or decide to have the first instance court carry out the enforcement.
With respect to the enforcement procedure for IPR administrative cases, a people’s court handling an administrative enforcement case shall apply the Administrative Law, Administrative Litigation Law and relevant judicial interpretations; in the absence of corresponding provisions, the court shall apply the relevant civil enforcement provisions as reference.
IV. Enforcement of property-related matters in criminal IPR cases
The people’s court of first instance shall carry out the enforcement with respect to the following property-related matters pursuant to the holdings of a legally effective criminal judgment: (1) fines and confiscation of property; (2) compensation orders; (3) the disposal of stolen money and property transferred with the case; (4) confiscation of the property of the actor that was provided for use in the crime and transferred with this case; and (5) other related matters to be enforced by the people’s court.
Enforcement cases involving property portions of a criminal judgment shall be governed by the Criminal Law, the Criminal Procedure Law and relevant judicial interpretations. In the absence of corresponding provisions, the court shall apply the relevant civil enforcement provisions as reference.
For further information, please contact:
Karl Zhang, Lee Tsai & Partners
lawtec@leetsai.com
