TOKYO — China will set up specialized courts for intellectual property cases as early as next spring in response to the sharp rise in such litigation — a development seen holding both promise and pitfalls for Japanese corporations.
The country saw some 90,000 intellectual property cases last year, nearly seven times the tally eight years earlier.
The move was included in a plan released recently by the Supreme People’s Court for judicial system reforms over the five years through 2018. The document did not provide details of where the courts will be located. But they are expected to be set up in big cities with a concentration of corporations, such as Shanghai and Guangzhou.
In China, intellectual property cases are now handled in the equivalent of Japanese district courts. These courthouses number about 3,500 nationwide. While the figure may seem high, “only about 20% have judges well-versed in intellectual property, and the shortage is especially pronounced in regional cities,” says Yoshifumi Onodera, an attorney knowledgeable about the Chinese judicial system.
Since intellectual property cases are heard in the regions where the problems arise, parties risk an unfair trial if they get stuck with a judge lacking expert knowledge. Regional bonds and personal ties may also lead judges to rule in favor of local businesses. The creation of specialized intellectual property courts is meant to address these issues.
“The biggest focal point is the jurisdiction of each intellectual property court,” says Akihisa Kamegaya, head of the intellectual property rights department at Jetro Beijing. Hearing a case in a faraway court helps to bypass judges partial to local businesses, Kamegaya argues.
Yoshio Iteya, a lawyer familiar with intellectual property issues in China, says the creation of these courts is a “double-edged sword” for Japanese businesses. China has about 500,000 patent applications, more than any other country, he notes. And these days, Chinese companies are increasingly taking Japanese, American and European corporations to court.”Japanese companies will have to think more about the risks of being sued,” Iteya says, since the launch of intellectual property courts will make it easier for Chinese companies to file lawsuits.
Meanwhile, some Japanese companies are hopeful that the reforms to China’s judicial system will lead to a decrease in pirated products made there.
