Chinese Patent Litigation: Leveraging Specialized IP Courts

Chinese Patent Litigation: Leveraging Specialized Ip Courts

Selecting a Jurisdiction for Patent Litigation in China

In China, when multiple courts would have jurisdiction over a plaintiff’s case, a patent owner can choose which court will try their case. Also known as forum selection or forum shopping, patent owners must consider which court to select to hear their case when patent infringement arises.

In China, two courts have jurisdiction over patent infringement-related matters.

1. The Intermediate People’s Court, where the infringement occurs.
2. The Intermediate People’s Court, where the defendant’s domicile is located.

In China, “patent infringement” refers to the manufacture, sale, offer for sale, use, or import of patented products. This applies to where the infringing activities occur and where the patent infringement results occur. That means if a company designs an infringing product in city A but manufactures in city B, then patent infringement would occur in cities A and B.

There are special considerations for forum selection when the patent infringement in China is online, or would be hard to prove the location of the infringement. For example, it may be difficult to identify the infringer when the patent infringement may only occur on an e-commerce website. In that case, the safest approach would be to file the patent infringement case where the defendant’s domicile is located (option 2).

A common mistake for plaintiff’s asserting patent infringement in China is to choose a court at a delivery address used to acquire infringing products from an e-commerce website. Some might consider the delivery location from the e-commerce website to the location occurs (option 1). However, the Supreme People’s Court ruled in 2017 that the delivery address of any online shopping does not grant jurisdiction over patent or trademark litigation.

Specialized IP courts are responsible for patent and trademark infringement cases within the Intermediate People’s courts. Generally, the specialized IP courts in Beijing, Shanghai, or Guangzhou will have less local protectionism and tend to award greater damages in Chinese Patent Litigation cases. Therefore, for non-Chinese entities looking to initiate patent litigation in China, selecting one of the specialized IP courts as a forum for patent litigation in China may be beneficial.

One common approach for plaintiffs is to utilize trade shows in Shanghai, Guangzhou, Beijing, or Hainan to secure a forum of their choosing in the preferred specialized IP courts. To secure a forum in one of these courts, plaintiffs can attend exhibitions based in the preferred jurisdiction and conduct a notarized investigation or notarized purchase at the exhibition to secure evidence of the infringement. As many large exhibitions exist in these cities, a plaintiff can concurrently secure evidence of infringement and jurisdiction in their preferred forum. According to a report by the Shanghai IP court, in almost 72% of the IP infringement cases, the plaintiffs use exhibitions held in Shanghai to establish jurisdiction in Shanghai.

Other forums to consider for patent infringement litigation in China include the intermediate people’s courts in Hangzhou, Suzhou, and Shenzen. These cities are relatively economically developed and have many experienced judges to hear patent infringement-related cases.