China: Q & A On Patent Litigation In China (Part III - Injunction And Preservation Of Evidence)

1. Can I ask the court to rule to preserve evidence?

Yes. According to Article 81 of the Civil Procedure Law, where any evidence may be extinguished or be hard to obtain at a later time:

  • a party may, in the course of an action, apply to the People's Court for evidence preservation, and the People's Court may also take preservation measures on its own initiative; or
  • if the circumstances are urgent, an interested party may, before instituting an action or applying for arbitration, apply for evidence preservation to the People's Court at the place where the evidence is located or at the place of domicile of the respondent or the People's Court having jurisdiction over the case.

Please note that the procedures for evidence preservation shall be executed by referring to procedures for property preservation.

2. How much time do I have to file a lawsuit after the court issued an order to preserve evidence?

The lawsuit should be filed within 30 days. If no lawsuit is filed in this time, the court will release the preserved evidence.

3. Can the court ask a proved judicial observer to prove the technical issues?

There are two possible types of technical experts in litigation that can be appointed by the court to prove the technical issue:

1) Experts according to Article 79 of the Civil Procedure Law. A party may apply to the People's Court to notify a person with expertise to appear in court to offer an opinion regarding an identification opinion issued by an identification expert or regarding a specialized issue.

2) Technical experts that belong to the court to assist the judicial personals. Their role is based on the judicial interpretation of the Supreme People's Court of China relating to the issues of Intellectual Property Courts (IP Courts) investigation officers involved in litigation activities (2015). Such investigation officers are members of the court, who assist the court to understand technical facts. Their presence is at the request of the court. However, they do not have judicial power, and must comply with the rules and procedures relating to disqualification (i.e. can be excused due to conflict of interest). These investigation officers are attached to the IP Court in matters that relate to civil and administrative litigations.

4. Can I apply for an injunction before filing a lawsuit?

Yes. The time limit for evidence preservation also applies to a preliminary injunction, and the court will ask the applicant to put up a guarantee (i.e. safety deposit) for the injunction.

5. What are the requirements for an application for a preliminary patent injunction?

There are four requirements for a preliminary patent injunction application:

  1. The applicant should be also qualified as a plaintiff. The applicant will initiate the lawsuit, therefore, they can only be the right-holder of the patent right or the interested party (i.e. licensee). That is, the patent holder should provide the patent letter; and other relevant parties should provide documents that certify their right to sue.
  2. The applicant must have clear evidence that there has been an infringement, or will be an infringement.
  3. If the infringement is not stopped, there will be irrevocable damage to the right-holder or interested party.
  4. The applicant must provide a guarantee to the court (i.e. a safety deposit). The guarantee should be equivalent to the value of the seized goods or the cost in lost business for the subject of the preliminary injunction, or pre-trial preservation of evidence / property.

6. After receiving an application for a preliminary injunction, how fast will the court make a ruling?

If the case is urgent, and without any action, irrevocable damage will be done to the right-holder or the interested party, then the court shall make the decision on the injunction within 48 hours after receiving the application.

Once the injunction decision is granted, it shall be enforced immediately.

7. If property preservation is granted by a ruling, will the preservation be enforced immediately?

Yes. Once the preservation or preliminary injunction is granted, the court should enforce it immediately. In IPR cases, the court should notify the opposite party within five days of the ruling. If the opposite party does not comply, the court may ask the relevant departments, entities, or people to seize, freeze, detain, and / or withhold prosperities or evidence.

8. What can the other party do if unsatisfied with the ruling?

The opposite party could provide a counter guarantee to stop the preservation enforcement. Where a party concerned is dissatisfied with the ruling on an injunction, it may within 5 days of receipt of the ruling, apply once for reconsideration. The court shall examine the ruling within 10 days of receipt of the application for reconsideration. The enforcement of the ruling shall not be stopped during the period of reconsideration.

9. Within which time limit does the petitioner have to file a lawsuit after the court has adopted the preservation measures?

Once the court grants the preservation request, the petitioner shall file a lawsuit within 30 days after the grant.

10. What will happen if the petitioner doesn't file a lawsuit in due time?

The court will release the evidence or property. If there is any damage to the evidence or the property as a result of the preservation measures, the party that suffered the damage could request reimbursement. If the preservation is requested by the petitioner, then the damage reimbursement will be deducted from the preservation guarantee. If the preservation measure was initiated by the court, then the damaged party could ask the court itself for reimbursement.

11. If the application is denied, does the applicant have to compensate the losses suffered by the respondent due to ceasing of the relevant activities?

Yes, that is what the guarantee is for. The guarantee is equal to the cash value of the seized goods. The applicant will be responsible for any losses suffered due to injunction or seizure.

12. How high is the percentage of granted preliminary injunction requests in China?

In 2013 there were:

  • 11 injunction requests for patent infringement, 8 of them were granted (72%);
  • 173 preservation for evidence requests, 169 of them were granted (98%);
  • 47 preservation of property requests, 45 of them were granted (96%).

13. On which party is the burden of proof placed for a preliminary injunction request or preservation of property / evidence?

The burden of proof lies with the applicant. As stated in the answer to the above question 5, the applicant needs to produce clear evidence of an infringement, or that there will be an infringement. Moreover, if the infringement is not stopped, there must be evidence that there will be irrevocable damage to the right-holder or interested party.

14. Is it true that China has very strict rules on notarization and legalization??

Generally, these rules on notarization and legalization are only needed for evidence formed outside China. Notarized evidence proves its authenticity.

15. A Power of Attorney (POA) issued by a foreign party outside China must undergo notarization and legalization. What about a Power of Attorney issued by a foreign party in China?

This notarization and legalization requirement also applies to a POA issued by a foreign party in China, unless the signature of the representative of the foreign party on the POA is witnessed by the judge of the court.

16. Is it necessary to notarize and legalize evidence obtained from official or publicly accessible foreign publications or a patent searching database?

If the evidence is obtained outside of China, it needs to be notarized and legalized. However, if the publication of the evidence is available in a database that could be searched within China, then such evidence will not be necessary to be notarized and legalized.

17. Is the evidence obtained by entrapment admissible?

As long as the evidence is obtained via legal means, even if it is obtained by means of entrapment, generally speaking it should be admissible before the court. However, the process by which the evidence is obtained would require notarization.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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