The Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Review of Act Preservation in Intellectual Property Disputes has been approved by the 1755th conference of the judicial committee of the Supreme People's Court on 26 November 2018, and is hereby announced to be enacted from 1 January 2019. 

Supreme People's Court
12 December 2018
 

Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Review of Act Preservation in Intellectual Property Disputes

 
(approved by the 1755th conference of the judicial committee of the Supreme People's Court on 26 November 2018, to be enacted from January 1, 2019)
Fa Shi [2018] No. 21

 

In order to properly review cases involving act preservation in intellectual property disputes and to protect the legitimate rights and interests of the parties in a timely and effective manner, this Provisions is stipulated in accordance with related articles and provisions of the Civil Procedure Law of PRC, the Patent Law of PRC, the Trademark Law of PRC, the Copyright Law of PRC, etc. in conjunction with the practical conditions of trial and execution.
 
Article 1 For the purpose of the Provisions, “Intellectual property disputes” refer to disputes over intellectual property right and competition under the Provisions on Cause of Action of Civil Lawsuits.
 
Article 2 Where a party in an intellectual property dispute applies for act preservation in accordance with Article 100 or 101 of the Civil Procedure Law before the judgment, ruling or arbitral award takes effect, the people's court shall accept the application.
 
Where a licensee under an intellectual property license contract applies for an order to cease the infringement of intellectual property rights before trial, a licensee of an exclusive license contract may file an application with the people's court separately; a licensee of a sole license contract may file an application separately if the right holder does not file any application; a licensee of a general license contract may file an application separately when explicitly authorized by the right holder to file a lawsuit in his own name.
 
Article 3 An application for pre-trial act preservation shall be filed with the people’s court having jurisdiction over the corresponding intellectual property dispute at the domicile of the respondent or with a people’s court having jurisdiction over the case.
 
Where the parties concerned agree to arbitration, they shall apply to the people’s court prescribed in the preceding paragraph for act preservation.
 
Article 4 To apply for act preservation to the people's court, an application and corresponding evidence shall be submitted. The application should contain the following items:
 
(1) the identity, delivery address, and contact information of the applicant and the respondent;
(2) the content and time limit of the applied act preservation measures;
(3) the facts and reasons on which the application is based, including the specific description of the irreparable loss in the lawful rights and interests to be suffered by the applicant and the potential difficulty in the enforcement of the judgment of the case due to the respondent's actions;
(4) the property information or credit certificates as guarantee for the act preservation, or the reasons for not providing the guarantee;
(5) other matters that need to be specified.
 
Article 5 The people's court shall, before deciding to take act preservation measures, inquire of the applicant and the respondent, except when the situation is urgent or the inquiry may affect the implementation of the preservation measures.
 
Where the people's court decides to take act preservation measures or reject the application, it shall serve the ruling to the applicant and the respondent. Where the service of the ruling to the respondent may affect the implementation of the preservation measures, the people's court may serve the ruling to the applicant in a timely manner, which is, no later than 5 days after the preservation measures are taken.
 
Where a party concerned applies for act preservation during arbitration, it shall submit an application form, a notification of acceptance of the arbitration, and other relevant materials to the people's court via the arbitral authority. In such case, if the people's court decides to take act preservation measures or decides to reject the application, it shall serve the ruling to the involved parties and notify the arbitral authority.
 
Article 6 Insofar as the interests of the applicant will be harmed if the act preservation measures are not taken immediately, any of the following circumstances shall be deemed to be “urgent” as prescribed in Article 100 and Article 101 of the Civil Procedure Law:
 
(1) the applicant's trade secret is about to be illegally disclosed;
(2) the applicant's personal rights, such as right to publication or the right to privacy, will be infringed upon;
(3) the intellectual property right involved in the dispute will soon be illegally disposed of;
(4) the applicant's intellectual property right is being or will be infringed upon at a time-sensitive occasion such as a trade fair;
(5) a time-sensitive hit show is being or will be infringed upon;
(6) other circumstances requiring immediate act preservation measures.
 
Article 7 The people's court shall take the following factors into consideration in reviewing the application for act preservation:
(1) whether the applicant's request has a factual basis and a legal basis, including whether the validity of the claimed intellectual property right is stable;
(2) whether not taking act preservation measures will cause irreparable damage to the applicant's legitimate rights and interests or cause the judgment of the case to be difficult to enforce;
(3) whether the damage caused to the applicant by not taking act preservation measures exceeds the damage caused to the respondent by taking the act preservation measures;
(4) whether taking act preservation measures harms the public interest;
(5) other factors that should be considered.
 
Article 8 When the people's court examines and judges whether the validity of the intellectual property right claimed by the applicant is stable, the following factors shall be comprehensively considered:
 
(1) the type or attribute of the right involved;
(2) whether the right involved has gone through substantive examination;
(3) whether the right involved is in the invalidation or cancellation procedure and is likely to be invalidated or revoked;
(4) whether there is a dispute over ownership of the right involved;
(v) other factors that may lead to instability of the right involved.
 
Article 9 Where an applicant applies for act preservation on the basis of a utility model or a design patent right, the applicant shall submit a search report or a patent right evaluation report issued by the patent administration department under the State Council or a decision made by Patent Reexamination Board to maintain the validity of the patent right. Where the applicant refuses to submit the above documents without justified reasons, the people's court shall rule to reject the application.
 
Article 10 In a case involving act preservation in intellectual property or unfair competition disputes, any of the following circumstances shall be deemed to fall under the “irreparable harm” prescribed in Article 101 of the Civil Procedure Law.
 
(1) where the act of the respondent will infringe upon the applicant's personal rights such as goodwill or the right to publication, the right to privacy, and will cause irreparable harm;
(2) where the act of the respondent will lead to uncontrollable infringement and significantly increase the loss suffered by the applicant;
(3) where the infringement of the respondent will lead to a significant reduction in the relevant market share of the applicant;
(4) where other irreparable loss is suffered by the applicant.
 
Article 11 Where an applicant applies for act preservation, it shall provide a guarantee according to law.
 
The amount of guarantee provided by the applicant shall be equivalent to the loss that the respondent may suffer due to the implementation of act preservation measures, including the reasonable loss of sale proceeds and custody expenses of the products involved in order to cease the infringement.
 
In the process of implementing the act preservation measures, where the loss that the respondent may suffer exceeds the amount of the applicant's guarantee, the people's court may order the applicant to provide a corresponding additional guarantee and may rule to cancel or partially cancel the preservation measures provided that the applicant refuses to provide such additional guarantee.
 
Article 12 The act preservation measures taken by the people's courts shall generally not be cancelled on account of the provision of guarantee by the respondent, except with the applicant's consent.
 
Article 13 Where the people’s court rules to take act preservation measures, it shall determine a reasonable time limit for the act preservation measures according to such factors as the request of the applicant or the specific conditions of the case.
 
The ruling for ordering the cessation of the infringement upon intellectual property rights shall generally be maintained valid until the judgment of the case takes effect.
 
The people's court may rule to continue to take preservation measures according to the request of the applicant, additional guarantees, or other circumstances. Where the applicant requests to renew the preservation measures, it shall make a proposal within 7 days before the expiration of the time limit.
 
Article 14  Where the parties concerned petitions for review as being not satisfied with the decision of act preservation, the people's court shall review the petition and make a ruling within 10 days after receiving the petition for review.
 
Article 15 The methods and measures of the people’s court for act preservation shall be subject to the relevant provisions on the implementation procedures.
 
Article 16 Where any of the following circumstances occurs, it shall be deemed to fall within the circumstance of “erroneous application” under Article 105 of the Civil Procedure Law:
 
(1) where the applicant does not file a lawsuit or apply for arbitration within 30 days after taking the act preservation measures;
(2) where the act preservation measures are improper ab initio because of the reasons, such as the invalidation of the claimed intellectual property;
(3) where the application is for ordering the respondent to cease the infringement upon intellectual property rights or unfair competition, while the effective ruling determines that infringement or unfair competition does not occur;
(4) other circumstances where the application is erroneous.
 
Article 17 Where the party concerned applies for cancelling the act preservation and the people's court holds, upon examination after receiving the application, that it fall within the circumstances prescribed in Article 166 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China, the act preservation measures shall be decided to be cancelled within five days.
 
Where the applicant withdraws the application for act preservation or applies for cancelling the act preservation measure, it shall not be exempted from liability for compensation under Article 105 of the Civil Procedure Law.
 
Article 18 The compensation lawsuit filed by the respondent under Article 105 of the Civil Procedure Law shall be under the jurisdiction of the people's court that has taken the preservation measures provided that the applicant does not file a lawsuit after applying for pre-trial act preservation or the parties concerned agree to arbitration, or under the jurisdiction of the people’s court that accepts the lawsuit provided that the applicant files a lawsuit.
 
Article 19 Where the applicant applies for act preservation, property preservation or evidence preservation at the same time, the people's court shall respectively examine whether the applications for the different types of preservation meet the conditions and make a ruling accordingly.
 
In order to prevent the respondent from implementing an act of, for example, transferring property and destroying evidence to make it impossible to realize the purpose of the preservation, the people's court may decide the order of the execution of the different types of preservation measures according to the specific circumstances of the case.
 
Article 20 To apply for act preservation, the applicant shall pay the application fee in accordance with the provisions of the Measures for Payment of Litigation Fees on the application for act preservation measures.
 
Article 21 The Provisions shall take effect as of 1 January 2019. Where the relevant judicial interpretations previously issued by the Supreme People's Court are inconsistent with the Provisions, the Provisions shall prevail.