On 15 March 2020 the Supreme People's Court (SPC), in response to the Sino-American trade agreement signed in January 2020, issued a notice soliciting public opinions on:

  • the Implementation Plan for the Enforcement of Intellectual Property Judgments; and
  • the Guide for the Enforcement of Intellectual Property Judgments.

Draft implementation plan

The draft implementation plan proposes the following measures on information disclosure relating to the enforcement of judgments:

  • a dedicated section ("Disclosure of the Enforcement of Intellectual Property Judgments") will be created and incorporated in the China Enforcement Information Disclosure Network before the end of June 2020; and
  • a report compiling the national statistics (eg, numbers, categories and status quo) of the enforcement cases of IP judgments will be released within two months after the end of each quarter.

Draft guide

Rather than enforcing new measures, the draft guide, which consists of 27 articles, is basically a compilation of existing laws and regulations pertaining to the enforcement of judgments. The draft guide sets out the following measures, among others:

  • Pre-trial property preservation – irreparable damages must be proved and a bond equivalent to the amount requested for preservation will be posted.
  • Property preservation during a civil proceeding will be much easier to obtain and will require, among other things, the posting of a bond not exceeding 30% of the amount requested for preservation.
  • During enforcement proceedings, rights holders will be able to request the court to initiate an investigation of funds, movable property, real estate or any other property owned by the rights holder which is subject to a court decision being enforced through the Chinese courts' network enforcement enquiry system.
  • Rights holders will be able to leverage other indirect measures to pressure infringers into complying with court decisions, including:
    • applying for restrictive consumption measure to make services that are unnecessary for daily life or business no longer accessible to infringers;
    • requesting the court to restrict infringers from going abroad; and
    • requesting that infringers be included on the list of discredited persons and organisations.

In practice, two more remedies are available to enforce a judgment in China:

  • Where the shareholders of a company against which a judgment is enforced did not fulfil their capital contribution obligation, the rights holder can ask the court to order these shareholders to bear joint liability for an infringement.
  • Where such company is insolvent, the rights holder can ask the court to convert the enforcement procedure into a bankruptcy procedure.

Comment

The effective enforcement of an IP judgment is a highly technical matter. The promulgation of the SPC's documents may allow the judiciary to review the entire enforcement regime to further clarify and simplify not only enforcement procedures, but also bankruptcy procedures.