Amendment to China’s Administrative Procedural Law Comes into Force as of May 2015

On November 1^st, 2014, the Standing Committee of the National People’s Assembly promulgated amendments to the Administrative Procedural Law of the PRC (Amendment), which later became effective on May 1^st, 2015.

The first Administrative Procedural Law (APL) in China was enacted back in 1990 as a critical instrument for resolving administrative disputes and protecting legitimate rights of the citizens. However, filing a lawsuit against a governmental body was rather odd in a socialist structure. Following the constant social flux and economic developments under a reformed socialist democratic system, administrative litigations become more frequent but cases were still hard to be accepted, adjudicated and enforced because the APL had not fully catered to the needs of the people. As a result, the Amendment, which is the very first revision after the initial promulgation of the APL two decades ago, aims at resolving those particular issues. The following are some important amendments in relation to patent administrative litigation.

Administrative Litigation related to Patent Right

There are three types of patent administrative litigation categorized by the defendants, namely: the defendant may be (1) the Patent Re-examination Board (Re-examination Board), (2) the State Intellectual Property Office (SIPO) and (3) the patent administrative department under the State Council. Among them the first type enjoys the most cases that include rejection of patent rights and patent validity disputes, both are related to the affirmation of patent right and are appealed from the Re-examination Board.

Qualification for litigation practitioners

The qualification of advocacy has become more strict after the Amendment. Patent litigation practice before the Amendment allowed patent attorneys, regardless of whether they were licensed lawyers, to litigate before the administrative court. They were categorized as “other citizens permitted by the People's Court.” In fact, patent attorneys represented most patent litigations while only very few of them were also licensed attorneys-at-law.

In line with the Civil Procedural Law, the Amendment requires that only licensed lawyers and patent attorneys endorsed by the All-China Patent Attorney Association (ACPAA) are competent litigators and are qualified to participate in administrative litigation.[1] According to the SIPO statistics, as of December 11, 2013, there were 8861 patent attorneys while only 1293 were recommended by ACPAA. This indicates the Amendment attempts to leverage the quality of litigators and therefore not all patent attorneys are admissible before the administrative court.

Evidence collection

The rule on evidence collection has been relaxed after the Amendment. According to the Amendment, excepting situations involving national secrecy, commercial secrecy, and individual’s privacy which is subject to confidentiality, the representing attorney may review or duplicate the material evidence relating to the very case,[2] as interpreted, without permission from the court being necessary. In other words, file review for the case represented will not be subject to an advanced approval by the court. The accessibility of a file wrapper is therefore enhanced.  

Plaintiff's burden of proof

The plaintiff may present evidence that may prove the illegality of the administrative decisions. If the plaintiff's evidence is not admissible, the defendant is not exempt from its burden of proof. Also, evidence not previously presented during the administrative proceedings may be submitted during litigation.[3] In other words, the plaintiff is given an opportunity to supplement any evidence, even it is new, in an effort to make up mistakes during the administrative procedure, while the Re-examination Board also has a right to argue against the new evidence. 

Statute of Limitations

The statute of limitations for the plaintiff to initiate an action has been revised in the Amendment to six (6) months since the plaintiff knew or should have known the administrative decision.[4] However, the three (3) month time frame provided in the Patent Law has not been amended accordingly. Considering the need for an accelerated patent examination, the three (3) months time limit to appeal to the administrative court has not changed.

Duty to attend the hearing

The Amendment imposes a stricter duty of hearing attendance on the plaintiff. If the plaintiff fails to appear before the court after being summoned by the court, or withdraws from the court during the proceedings, the case may be deemed withdrawn. Before the Amendment, the court had to summon the plaintiff twice before the case was deemed withdrawn. In a similar vein, if the defendant fails to attend the hearing without justifiable reasons, or withdraws from the court without permission during the proceedings, the court may render a default judgment on the case. 

Time limit for case adjudication

As for the due time for the court to enter a judgment, the Amendment has extended it from three (3) months to six (6) months from the acceptance of the case. The jurisdiction of first instance cases for patent or trademark affirming the granting of rights is vested in the First Intermediate People's Court of Beijing. Since the case volume has been in a constant growth, which has been deemed way beyond the capacity of the Court, the extension of time limit for case adjudication may somewhat ease the state of many current cases being overdue..

Statement in the Court’s ruling against the plaintiff

Lastly, the court’s ruling will be stated differently when the court decides to rule against the plaintiff. After the Amendment, the court will rule by “dismissing” the plaintiff’s case when the court is in favor of the defendant[5] Previously for the same ruling, the court would only “affirm the decision" made by the Re-examination Board or the SIPO, which had long been criticized as an administrative power being superior over a judicial power. The rationale behind is that an administrative decision on affirmation of IP right is largely depending on the discretion of administrative agency, namely the SIPO. By ruling to "affirm the decision," the judicial power is believed to back up the administrative power. Whereas by ruling to “dismiss” the plaintiff’s claim, instead of affirming the disputed administrative decision, the SIPO will be left with an opportunity to correct and modify its previous decision. Furthermore, ruling to affirm, which means to accept the decision completely, is subject to a stricter criterion, whereas ruling to dismiss a case is more flexible so long as the plaintiff fails to successfully establish a claim. The judicial power may be expected to have more room to exercise.

Conclusion

Challenging the government organization or officials has been deemed unacceptable in the traditional and socialist Chinese society. The Amendment will have a significant impact on practices of patent administrative litigation because it not only leverages the quality of litigation practitioners, but also enhances the legitimate rights for plaintiffs. It will be interesting to observe whether the new procedural law can infuse a new frame of thought into the judicial system.