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Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Review of Act Preservation in Intellectual Property Disputes


Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Review of Act Preservation in Intellectual Property Disputes
 
Announcement of Supreme People’s Court of PRC
The Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Review of Act Preservation in Intellectual Property Disputes has been approved by the 1755th conference of the judicial committee of the Supreme People's Court on November 26, 2018, and is hereby announced to be enacted from January 1, 2019.
 
Supreme People's Court
December 12, 2018
 
Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Review of Act Preservation in Intellectual Property Disputes
 
 
(approved by the 1755th conference of the judicial committee of the Supreme People's Court on November 26, 2018, to be enacted from January 1, 2019)
Judicial Interpretation [2018] No. 21
 
In order to properly review act preservation in intellectual property disputes and to protect the legitimate rights and interests of the parties in a timely and effective manner, this Provisions is stipulated in accordance with related articles and provisions of the Civil Procedure Law of PRC, the Patent Law of PRC, the Trademark Law of PRC, the Copyright Law of PRC, etc. in conjunction with the practical conditions of trial and execution.
 
Article 1 “Intellectual property disputes” herein refers to disputes over intellectual property right and competition under the Provisions on Cause of Action of Civil Lawsuits.
 
Article 2 Where a party to an intellectual property dispute applies for act preservation in accordance with Articles 100 and 101 of the Civil Procedure Law before the judgment, ruling or arbitral award takes effect, the people's court shall accept the application of the party in question.
 
Where a licensee of an intellectual property license contract applies for an order to stop the infringement of intellectual property rights before trial, a licensee of an exclusive license contract may apply to the people's court separately; a licensee of a sole license contract may apply separately if the right holder does not apply to the court; a licensee of an ordinary license contract may, when explicitly authorized by the right holder to file a lawsuit in his own name, apply to the court separately.
 
Article 3 An application for pre-trial act preservation shall be filed before the corresponding local people’s court having jurisdiction over the intellectual property dispute in the location of the respondent or before a people’s court having jurisdiction over the case.
 
Where the parties agree to arbitration, the application for act preservation of shall be filed before the people's court prescribed in the preceding paragraph.
 
Article 4 To apply for act preservation to the people's court, an application and corresponding evidence shall be submitted. The application should contain the following items:
 
(1) the identity, address, and contact information of the applicant and the respondent;
(2) the content and time limit of the applied act preservation measures;
(3) the facts and reasons on which the application is based, including the specific description of, for example, the irreparable loss in the lawful rights and interests to be suffered by the applicant and the potential difficulty in the enforcement of the judgment of the case due to the respondent's actions;
(4) the property information or credit certificates as guarantee for the act preservation, or the reasons for not providing the guarantee;
(5) other matters that need to be stated.
 
Article 5 The people's court shall, before deciding to take act preservation measures, query the applicant and the respondent, except when the situation is urgent or the inquiry may affect the implementation of the preservation measures.
 
Where the people's court decides to take act preservation measures or decides to reject the application, it shall serve the ruling to the applicant and the respondent. Where the service of the ruling to the respondent may affect the implementation of the preservation measures, the people's court may serve the ruling to the applicant in a timely manner, which is, no later than 5 days after the preservation measures are taken.
 
Where a party applies for act preservation during arbitration, it shall submit an application form, an acceptance notification of the arbitration, and other relevant materials to the people's court via the arbitral authority. In such case, if the people's court decides to take act preservation measures or decides to reject the application, it shall serve the ruling to the involved parties and notify the arbitral authority.
 
Article 6 Insofar as the interests of the applicant will be harmed if the act preservation measures are not taken immediately, any of the following circumstances shall be deemed to be “urgent” as prescribed in Article 100 and Article 101 of the Civil Procedure Law:
 
(1) the applicant's trade secret is about to be illegally disclosed;
(2) the applicant's right of publication, privacy, etc. will be infringed upon;
(3) the intellectual property right involved in the dispute will soon be illegally disposed of;
(4) the applicant's intellectual property right are being or will be infringed upon at a time-sensitive occasion such as a trade fair;
(5) a time-sensitive hot-spot show is or will be infringed upon;
(6) other circumstances requiring immediate act preservation measures.
 
Article 7 The people's court shall take the following factors into consideration in the examination of the application for act preservation:
(1) whether the applicant's request has a factual basis and a legal basis, including whether the claimed intellectual property right is stable;
(2) whether not taking act preservation measures will cause irreparable damage to the applicant's lawful rights and interests or cause the judgment of the case to be difficult to enforce;
(3) whether the damage caused to the applicant by not taking act preservation measures exceeds the damage caused to the respondent by taking the act preservation measures;
(4) whether taking act preservation measures harms the public interest;
(5) other factors that should be considered.
 
Article 8 When the people's court examines and judges whether the validity of the intellectual property right claimed by the applicant is stable, the following factors shall be comprehensively considered:
 
(1) the type or attribute of the rights involved;
(2) whether the rights in question have gone through substantive examination;
(3) whether the rights in question are in the invalidation or cancellation procedure and have the possibility of being invalidated or revoked;
(4) whether there is a dispute over ownership of the rights in question;
(v) other factors that may lead to instability of the rights in question.
 
Article 9 Where an applicant applies for act preservation on the basis of a utility model or a design patent right, the applicant shall submit a search report, a patent right evaluation report issued by the patent administration of the State Council or a decision made by Patent Reexamination Board to maintain validity of the patent right. Where the applicant refuses to submit the above documents without justifiable reasons, the people's court shall decide to reject the application.
 
Article 10 In act preservation of intellectual property and unfair competition disputes, any of the following circumstances shall be deemed to include “irreparable damage” under Article 101 of the Civil Procedure Law.
 
(1) where the behavior of the respondent will infringe upon the applicant's personal rights such as the right to goodwill or publication right, privacy, etc. and will cause irreparable damage;
(2) where the behavior of the respondent will lead to uncontrollable infringement and significantly increase the loss suffered by the applicant;
(3) where the infringement of the respondent result in a significant reduction in the relevant market share of the applicant;
(4) where other irreparable damage is suffered by the applicant.
 
Article 11 Where an applicant applies for act preservation, it shall provide a guarantee according to law.
 
The amount of guarantee provided by the applicant shall be equivalent to the possible loss to be suffered by the respondent due to the act preservation measures, including the reasonable loss of sale proceeds and custody expenses of the products involved in order to stop the infringement.
 
In the process of implementing the act preservation measures, where the possible loss to be suffered by the respondent may exceed the amount of the applicant's guarantee, the people's court may order the applicant to add a corresponding amount of guarantees and may decide to cancel or partially cancel the preservation measures provided that the applicant refuses to add to the guarantee.
 
Article 12 The act preservation measures taken by the people's courts are generally not cancelled because the respondent provides a guarantee, except with the applicant's consent.
 
Article 13 Where the courts decides to take act preservation measures, the court shall determine a reasonable duration of the act preservation measures according to the request of the applicant or the specific conditions of the case.
 
The validity of the ruling to stop the infringement upon intellectual property rights shall generally be maintained till the time the judgment of the case takes effect.
 
The people's court may decide to continue to take preservation measures according to the request of the applicant, additional guarantees, etc. Where the applicant requests to renew the preservation measures, it shall make a proposal within 7 days before the expiration of the duration.
 
Article 14 Where the parties involved are not satisfied with the decision of act preservation and petitions for reconsideration, the people's court shall review the petition of reconsideration and make a ruling within 10 days after receiving the petition of reconsideration.
 
Article 15 The method and measures of act preservation of the people’s court shall be dealt with pursuant to the relevant articles and provisions of the implementation procedures.
 
Article 16 Where any of the following circumstances occurs, it shall be deemed to fall within the circumstance of “defective application” under Article 105 of the Civil Procedure Law:
 
(1) where the applicant does not file a lawsuit or apply for arbitration within 30 days after taking the act preservation measures;
(2) where the act preservation measures are improper from the beginning because of the invalidation of the intellectual property claimed to be protected;
(3) where the application is to apply an order to cease the infringement upon intellectual property rights or unfair competition, yet the effective judgment determines that infringement or unfair competition is not constituted;
(4) other circumstances where the application is defective.
 
Article 17 Where an application of the involved party for cancelling the act of preservation is received and examined by the people's court to fall within the circumstances prescribed by Article 166 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China, the act preservation measures shall be decided to be cancelled within five days.
 
Where the applicant withdraws the application for act preservation or applies for cancelling the act preservation, it shall not be exempted from indemnification under Article 105 of the Civil Procedure Law.
 
Article 18 An action for indemnity filed by the respondent under Article 105 of the Civil Procedure Law shall be, provided that the applicant does not file a lawsuit after applying for pre-trial act preservation or the involved parties agree to arbitration, under the jurisdiction of the people's court that has taken the preservation measures, or, provided that the applicant files a lawsuit, under the jurisdiction of the people’s court that accepts the lawsuit.
 
Article 19 Where the applicant applies for act preservation and property preservation or evidence preservation at the same time, the people's court shall separately examine and determine whether the applications for the different types of preservation meet the conditions.
 
In order to prevent the respondent from implementing an act of, for example, transferring property and destroying evidence to make it impossible to realize the purpose of the preservation, the people's court may decide the order of the execution of the different types of preservation measures according to the specific circumstances of the case.
 
Article 20 To apply for act preservation, the applicant shall pay the application fee in accordance with the provisions of the Measures for Payment of Litigation Fees on the application for act preservation measures.
 
Article 21 This Provisions is to be enacted on January 1, 2019. Where the relevant judicial interpretation previously issued by the Supreme People's Court is inconsistent with this Provisions, this Provisions shall prevail.
 
December 13, 2018
Source: Supreme People's Court
 
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