Supreme Court Promulgates New Provisions on IP Interim Injunctions

The Adjudication Committee of the Supreme People's Court adopted the Provisions of the Supreme People's Court on Several Issues Concerning the Examination of Law Application on the Preservation of Acts in Intellectual Property Disputes (“New Provisions”) on November 26, 2018. The New Provisions will come into effect on January 1, 2019.

The Supreme People's Court issued Several Provisions of the Supreme People's Court on the Law Application on Ceasing Infringement of Patent Right Before Litigation and Interpretation of the Law Application on Ceasing Infringement of Exclusive Rights of Registered Trademarks and Preservation of Evidence Before Litigation successively in 2001 and 2002 (“Interpretations”), which preliminarily established the regulations on stopping infringements of patent rights and exclusive rights of registered trademarks (“Trademark Rights”) before litigation. The formulation and implementation of the New Provisions improve the above-mentioned two Interpretations, with the following highlights:

1、Applicable to competition disputes

The previous two Interpretations are specifically applicable to injunctions regarding infringements of patent rights and Trademark Rights, respectively, while the New Provisions stipulate clearly in Article 1 that “Intellectual Property Disputes in these Provisions refer to the disputes over intellectual property rights and competition as stipulated in the Causes of Action for Civil Cases”. It shows that the New Provisions not only cover the previous two Interpretations, but also apply to competition disputes for the first time.

2、Detailing the procedure requirements of injunction

The New Provisions provide more detailed rules on the content of application, procedure of investigation, and procedure of review, etc.

(1) The New Provisions require the following information to be included in the application:

● The identities, service addresses and contact information of applicant and respondent;

● The content and term of the injunction to be applied for;

● The facts and reasons of the application including the detailed descriptions on the irreparable harm of rights and interests of the applicant or harm such as the difficulty in enforcement to be caused by the act of the respondent;

● The asset information or credentials of credit to be provided as collateral for the injunction, or the reason why collateral is not necessary.

(2) The New Provisions clearly stipulate that the court shall inquire the applicant and respondent before ruling for the injunction, unless under urgent circumstances or under the circumstances that the inquiry may affect the implementation of injunctive measures. The previous interpretation on patent infringement stipulates that the court may summon and inquire one or both parties if the court needs to verify the relevant facts before rendering the ruling. Now it is the first time to stipulate that the respondent should be inquired before injunction.

Also, the New Provisions list several urgent circumstances, mainly including circumstances where:

● The applicant's trade secret is about to be illegally disclosed;

● The applicant's publication right, privacy and other personal rights are about to be infringed;

● The disputed intellectual property is about to be illegally disposed of;

● The intellectual property of the applicant is or is about to be infringed in events of timeliness such as trade fairs;

● The popular program of timeliness is or is about to be infringed, etc.

The New Provisions enhance the protection of the infringed, and also aim to prevent malicious application for injunctive measures.

(3) The New Provisions stipulate that if a party is not satisfied with the injunction ruling and applies for a review, the court should review and render a ruling within ten days upon receipt of the review application. The previous interpretation only provides that a party may apply for review within ten days upon the receipt of the ruling. By clarifying the time limit for review the New Provisions provide better protection over the rights and interests of the parties.

3、Clarifying the factors to consider when court reviews the application for injunction

The New Provisions clarify several factors to consider when the court reviews the application for injunction, and point out that the court should review whether the effectiveness of the IP applying for protection is stable. However, the factors mentioned are still general principles, more detailed judicial interpretations or practical guidance as to the depth of review, weighing of factors, standard for the effectiveness of the IP, etc., are still required in order to make the New Provisions clearer and more predictable.

Meanwhile, the New Provisions set forth the circumstances of irreparable harm, including:

● The circumstances where the act of respondent would cause irreparable harm to the applicant’s business reputation, publication right, privacy and other personal right;

● The act of respondent would cause the infringement difficult to control and the applicant’s damage to be significantly increased;

● The infringing act of respondent would lead to significant decrease of the market share of applicant, etc.

4、Objective attribution of liability applied in judging whether the application for injunction is wrongful

The New Provisions clearly provide the four circumstances of wrongful application for injunction. Different from the principle of liability attribution applied in ordinary torts, the New Provisions apply objective attribution of liability to judge whether the application for injunction is wrongful without considering the “wrongful mind” of applicant. The New Provisions also set forth the contents such as jurisdiction of court over compensation lawsuit arising out of wrongful application and removal of injunction.