As from 3 November 2014, the judicial interpretation "Provisions on Beijing, Shanghai and Guangzhou Intellectual Property Courts' Jurisdiction over Cases" issued by the Supreme People's Court (FASHI [2014] No. 12) (hereinafter referred to as the "Interpretation") has officially come into effect. The Interpretation has laid down rules specifying the arrangements regarding the jurisdiction of intellectual property (hereafter, "IP") courts by the NPC Standing Committee in the "Decision on Establishment of Intellectual Property Courts" (hereinafter referred to as the "Decision"), and effectuated issues such as case types under the jurisdiction, relationship with upper and lower courts, and cross-regional jurisdiction of IP courts, as raised in the Decision. However, it does not provide a clear solution for the transitional issues in the conversion from the old jurisdiction system of IP cases which had been relatively complex into the new jurisdiction system [1]. In addition, it represents new requirements for the new court system to effectively complete the trial of IP cases and protect the legitimate rights of action of the parties in order to achieve the initial goal of establishing IP courts.

The Interpretation has eight articles in total, mainly covering the jurisdiction over cases, and relationship between different instance levels of IP courts, including first-instance jurisdiction, cross-regional jurisdiction, exclusive jurisdiction, second-instance jurisdiction, appellate jurisdiction, handling of pending cases, etc.

(A) First-instance Jurisdiction. According to Article 1 of the Interpretation, the cases under the first-instance jurisdiction of IP courts mainly include three types: (a) patent, new plant varieties, IC layout design, technical secrets, computer software, and other civil and administrative cases of a technical nature (hereinafter referred to as "Technical Civil and Administrative Cases"); (b) administrative cases filed against administrative acts, involving copyrights, trademarks, unfair competition, etc., by the departments under the State Council or governments above county level; (c) civil cases involving determination of well-known trademarks.

(B) Cross-regional Jurisdiction. According to Article 2 of the Interpretation, the Guangzhou IP Court shall have cross-regional jurisdiction over first-instance Technical Civil and Administrative Cases and first-instance civil cases involving the determination of well-known trademarks.

(C) Exclusive Jurisdiction. As provided in Article 5 of the Interpretation, Beijing IP Court has exclusive jurisdiction over the IP grant and invalidation cases and administrative cases arising out of other administrative acts in relation to IP grant and invalidation.

(D) Second-instance Jurisdiction and Appellate Jurisdiction. As provided in Article 6 of the Interpretation, IP courts have the second-instance jurisdiction over the first-instance decisions of general civil and administrative IP cases made by a grass-root people's court in the municipality where such IP court is situated. As provided in Article 7 of the Interpretation, appeal against the first-instance judgments or rulings made by an IP court are to be heard by the IP tribunal within the higher people's court for the territory where such IP court is situated.

(E) Handling of Pending Cases. As provided in Article 8 of the Interpretation, the courts which accepted the cases shall continue to hear the Technical Civil and Administrative Cases and civil cases involving the determination of well-known trademarks which have been accepted before the establishment of IP courts but are yet to be concluded by grass-root courts in the provinces (municipalities directly under the Central Government) where IP courts are situated and intermediate courts in Guangdong province (except Guangzhou Intermediate Court).

Therefore, the Interpretation has effectuated the requirements of the relevant decision of the NPC Standing Committee, succeeding and breaking through the existing regime. First of all, the Interpretation has achieved a limited cross-regional jurisdiction, that is, for the three types of cases as provided in Article 1, grass-root courts for the provinces (municipalities directly under the Central Government) where IP courts are situated have cross-regional jurisdiction, and places other than Beijing, Shanghai and Guangdong for the time being are not affected. Secondly, in view of the characteristics that the computer software cases involving professional and technical fact-finding and of a more technical nature which would be more difficult for the grass-root courts to trial, the Supreme Court has added civil and administrative cases for computer software in addition to the four types of cases specified in the Decision, and set aside room for the scope of acceptance of cases by IP courts. Thirdly, the Interpretation has achieved the "two to one" jurisdiction for civil and administrative trials by IP courts and the higher people's courts for the territories where such IP courts are situated, that is, IP courts and the IPR tribunals within the higher people's courts for the territories where such IP courts are situated have unified jurisdiction over all civil and administrative cases involving IP, which will facilitate the unification of the standards of IP cases and improve the quality of the judicial protection of IP. According to a relevant official from the Supreme Court, "three to one" jurisdiction over intellectual property cases is also foreseeable in the future.

But with institutional innovation there are often challenges in practice. The system and implementation of the jurisdiction reform over IP cases as decided in the Interpretation are likely to face some new problems and difficulties.

A. Jurisdiction Issues for Civil Cases of General Trademarks and Copyrights

Despite the Interpretation having clarified the relationship among the IP courts, grass-root courts and higher courts, it does not specify the jurisdiction over general civil and administrative IP cases, for example, civil cases for general trademarks (not involving well-known trademarks) , general copyrights (not involving computer software) and technical agreements, which are not clearly within the jurisdiction of IP courts. According to the "Notice of the Supreme People's Court on Adjusting Standards for Jurisdiction of All Levels of Local People's Courts over First-instance Civil Cases of IP", grass-root courts generally only have jurisdiction over first-instance "copyright and trademark cases" with the case value of 5 million Yuan or less, so it remains unclear whether the old rules should continue to apply to general trademark and copyright cases for which the intermediate people's courts previously had jurisdiction. However, as provided in Article 3 of the Interpretation, "Intermediate people's courts of Beijing, Shanghai and Guangzhou cease to accept civil and administrative cases of IP", which seems to be in contradiction with the Supreme Court's old rules concerning the first-instance jurisdiction over general trademark and copyright cases, and this needs to be addressed by the Supreme Court by issuing further transitional rules concerning jurisdiction. On this issue, Article 1 of the "Provisions regarding Transition for Jurisdiction Adjustment of IP Cases" issued by Beijing Higher Court on 4 November, 2014 provides that "Beijing IP Court will accept cases as from 6 November, 2014, having an integrated jurisdiction over civil and administrative cases which were previously under the jurisdiction of Beijing intermediate people's courts pursuant to the Supreme People's Court's Provisions on Beijing, Shanghai and Guangzhou IP Courts' Jurisdiction over Cases". Judging from this provision, Beijing Higher Court has construed Article 1 of the Interpretation in such a way that the scope of jurisdiction of IP courts is not merely limited to three types of cases as specified in Article 1, but instead covers all civil and administrative IP cases which should be under the jurisdiction of the intermediate people's courts. Based on this understanding, we have submitted materials of a case for technical agreement to Beijing IP Court, waiting for its decision to accept the case or not. The rules of Shanghai and Guangdong higher courts have yet to be issued.

B. Issues concerning Undertaking of New and Old Cases

For cases under the jurisdiction of IP courts that have been accepted by other courts, the Interpretation only provides that the cases accepted by grass-root courts for the provinces (municipalities directly under the Central Government) and intermediate courts of Guangdong province (except Guangzhou Intermediate Court) are continuing to be heard by the courts which accepted them. It does not, however, provide for issues on how to deal with the cases which have been accepted by intermediate courts in Beijing, Shanghai and Guangzhou. In addition, as can be seen from the published list of judges of Beijing IP Court, all of them are outstanding judges transferred from grass-root courts, intermediate courts and the Higher Court, who have undertaken a large number of cases, especially major and tricky ones, in their previous courts. If the undertaker is replaced in the process of the trial of these cases, the court will have to face an important issue of how to protect the parties' rights of action, and this also presents challenges for the case lawyers to represent the cases and protect the interests of the parties. Article 2 of "Provisions regarding Transition for Jurisdiction Adjustment of IP Cases" issued by Beijing Higher Court has set a transitional period for this issue from 5 November to 21 December, during which the previous undertaking judge will continue to hear the case in the previous court, and the undertaker will be replaced if the case is not concluded after the transitional period. Shanghai and Guangdong higher courts have yet to introduce transitional measures.

C. Issues concerning Contradiction between Number of Judges and Number of Cases in IP Courts

According to the type of jurisdiction as determined by the Interpretation, the IP courts will undertake a large number of IP and unfair competition cases. However, from the "Guiding Opinions (Trial) on Electing Judges of IP Courts" as issued by the Supreme Court and the appointment and removal decisions for Beijing IP Court issued by Beijing People's Congress, the IP Court will adopt the judge responsibility system and quota system, further highlighting the dominant position of the judge, which represents higher standards for the electing conditions of judges, and the number of judges is limited by applying a strict distinction among judges, assistant judges and administrative staff. Therefore, facing the contradiction between a small number of judges and a large number of cases, the Interpretation may raise very high requirements for the capacity of IP courts to undertake the cases that may even be beyond its capacity. How to meet and realize the need for parties to litigate in a legitimate, efficient and timely manner, and break the existing mechanisms to select outstanding IP judges, is an important issue which urgently needs to be addressed by the Supreme Court in the next step.

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[1] "Beijing High People's Court's Provisions regarding Transition for Jurisdiction Adjustment of Intellectual Property Cases" issued by Beijing Higher Court on 3 November, 2014, providing for a transitional solution for Beijing Intellectual Property Court.