Page 142 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
Potential Institutional Changes in Agencies certainly this is one area where China can substantially
that Enforce IP Protection strengthen its IP laws.
As noted in the beginning of this presentation, The weakness of the Chinese judicial system is not
enforcement of intellectual property protection in particularly related to its lack of strong enforcement if IP
China has become a contentious international issue. rights, but rather its overall institutional frailty. Thus, for
Immediately subsequent to the meeting between example, while there are numerous rules of evidence issued
President Donald Trump of the U.S. and President Xi of by the Supreme People’s Court and a few rules of evidence
China of the G20 meeting, China announced that the in the Law of Civil Procedure, China actually lacks a proper
National Development and Reform Commission along law of evidence. Insistence, for no good reason on having
with 37 government departments released a joint policy evidence originating in foreign jurisdictions, notarized,
provision to deal with serious IP infringers including, legalized, and consularized, in order to be admitted as
publishing a national list of flagrant IP offenders; making evidence by a court are just frivolous procedures. Also,
it difficult for persons on said list to register patents; insisting on the original of all documents, which many
limiting such persons access to government support courts in China do, in order for them to be admitted into
and state contracts; restricting individuals on said list evidence, can lead to absurdities. Evidence should be
from holding positions on the board of state owned evaluated on a basis of its probative value, not on whether
companies; restricting individuals on said list from or not it is an original document.
buying property; prohibiting companies on said list from
issuing corporate bonds, etc. Banks will be instructed to While the burden of proof is always in the party
be cautious in considering extending credit lines for any proposing the facts, normally the plaintiff, this would shift
company on said list. to the defendant once the plaintiff provided initial evidence
of its case. While Chinese law provides for a shifting burden
While this is a welcome measure for those seeking of proof, the courts fail to follow that procedure.
better enforcement of IP protection in China, there are
institutional barriers to protecting IP in China because of In addition, the belittling of oral testimony as
the weakness of some of the most important institutions, evidence is compounded by the lack of a law against
such as the judicial system. falsely testifying under oath in civil proceedings. In fact,
witnesses testifying in Chinese courts are not sworn to
While the courts in China have witnessed important tell the truth and partly as a result of this, oral testimony
improvements in the past three years, including the is denigrated. A law of perjury punishing false testimony
recent establishment of special intellectual property in civil cases should be enacted. The importance of oral
courts and circuit courts of the Supreme People’s Court— testimony should be made clear. Witnesses in all legal
and the Chinese Communist Party, and government proceedings should swear to tell the truth.
have held important meetings on improving the rule
of law in China—there still remains much to be done to Furthermore, while there are procedures for discovery
establish proper judicial institutions administering the of evidence and freezing of assets, even by ex parte
rule of law. procedures before the commencing of litigation, most
courts fail to enforce or grant applications for these
Chinese laws on intellectual property are quite procedures, instead of granting them routinely. They
comparable to laws in many other states and generally should be granted routinely.
are quite good. However, in order to strengthen
intellectual property protection, Taiwan, which used Most Chinese cases are handled by three judges,
to be a haven for IP pirates, measurably strengthened although one judge is primarily in charge of the
criminal law punishments for IP offenders. These changes case. In fact, there is no need for three judges. In the
in the law, which took place some years ago, made a overwhelming majority of Chinese cases one judge
dramatic difference in enforcing IP protection in Taiwan would suffice. People’s assessors are surely a waste of
and in general have been quite successful in cleaning up time as they add nothing to the litigation process. Trying
IP piracy. While the Chinese government may not wish cases before a single judge will free up judges in China
to go as far as Taiwan did in increasing criminal penalties for judicial work in locations lacking sufficient judicial
and the ease of criminal prosecution for IP offenders, personnel and allow for the establishment of more
courts in locations that require them.
142
Potential Institutional Changes in Agencies certainly this is one area where China can substantially
that Enforce IP Protection strengthen its IP laws.
As noted in the beginning of this presentation, The weakness of the Chinese judicial system is not
enforcement of intellectual property protection in particularly related to its lack of strong enforcement if IP
China has become a contentious international issue. rights, but rather its overall institutional frailty. Thus, for
Immediately subsequent to the meeting between example, while there are numerous rules of evidence issued
President Donald Trump of the U.S. and President Xi of by the Supreme People’s Court and a few rules of evidence
China of the G20 meeting, China announced that the in the Law of Civil Procedure, China actually lacks a proper
National Development and Reform Commission along law of evidence. Insistence, for no good reason on having
with 37 government departments released a joint policy evidence originating in foreign jurisdictions, notarized,
provision to deal with serious IP infringers including, legalized, and consularized, in order to be admitted as
publishing a national list of flagrant IP offenders; making evidence by a court are just frivolous procedures. Also,
it difficult for persons on said list to register patents; insisting on the original of all documents, which many
limiting such persons access to government support courts in China do, in order for them to be admitted into
and state contracts; restricting individuals on said list evidence, can lead to absurdities. Evidence should be
from holding positions on the board of state owned evaluated on a basis of its probative value, not on whether
companies; restricting individuals on said list from or not it is an original document.
buying property; prohibiting companies on said list from
issuing corporate bonds, etc. Banks will be instructed to While the burden of proof is always in the party
be cautious in considering extending credit lines for any proposing the facts, normally the plaintiff, this would shift
company on said list. to the defendant once the plaintiff provided initial evidence
of its case. While Chinese law provides for a shifting burden
While this is a welcome measure for those seeking of proof, the courts fail to follow that procedure.
better enforcement of IP protection in China, there are
institutional barriers to protecting IP in China because of In addition, the belittling of oral testimony as
the weakness of some of the most important institutions, evidence is compounded by the lack of a law against
such as the judicial system. falsely testifying under oath in civil proceedings. In fact,
witnesses testifying in Chinese courts are not sworn to
While the courts in China have witnessed important tell the truth and partly as a result of this, oral testimony
improvements in the past three years, including the is denigrated. A law of perjury punishing false testimony
recent establishment of special intellectual property in civil cases should be enacted. The importance of oral
courts and circuit courts of the Supreme People’s Court— testimony should be made clear. Witnesses in all legal
and the Chinese Communist Party, and government proceedings should swear to tell the truth.
have held important meetings on improving the rule
of law in China—there still remains much to be done to Furthermore, while there are procedures for discovery
establish proper judicial institutions administering the of evidence and freezing of assets, even by ex parte
rule of law. procedures before the commencing of litigation, most
courts fail to enforce or grant applications for these
Chinese laws on intellectual property are quite procedures, instead of granting them routinely. They
comparable to laws in many other states and generally should be granted routinely.
are quite good. However, in order to strengthen
intellectual property protection, Taiwan, which used Most Chinese cases are handled by three judges,
to be a haven for IP pirates, measurably strengthened although one judge is primarily in charge of the
criminal law punishments for IP offenders. These changes case. In fact, there is no need for three judges. In the
in the law, which took place some years ago, made a overwhelming majority of Chinese cases one judge
dramatic difference in enforcing IP protection in Taiwan would suffice. People’s assessors are surely a waste of
and in general have been quite successful in cleaning up time as they add nothing to the litigation process. Trying
IP piracy. While the Chinese government may not wish cases before a single judge will free up judges in China
to go as far as Taiwan did in increasing criminal penalties for judicial work in locations lacking sufficient judicial
and the ease of criminal prosecution for IP offenders, personnel and allow for the establishment of more
courts in locations that require them.
142
