China Law Insight : China Business and Intellectual Property Lawyers & Attorneys : King & Wood Law Firm : IP, Arbitration, Litigation, Securities, Foreign Investment

One opinion is that patent ownership claims should be subject to the 2-year statute of limitations principle provided by Article 135 of the Civil Law, as there are no other provisions under the Patent Law stipulating otherwise. The date should be calculated from the date of announcement for granting the patent right.

Others argue that patent ownership disputes should be deemed as disputes under patent infringement and be handled under Article 23 of the Several Provisions of the Supreme People's Court on Issues Relating to Application of Law in the Trial of Patent Disputes (Judicial Interpretation [2001] No.20) (Interpretation), which provides that, while the patent is effective and infringement continues, patent infringement actions shall not be restricted by a statute of limitations.

A third opinion holds that the patent right is an absolute right and right in rem. Therefore, it has the same judicial characteristics as jus in re in conventional civil law. Under PRC law, the provisions on statute of limitations do not apply to enforcement by action in rem. Accordingly, patent ownership disputes is not subject to the 2-year statute of limitations.

Discussion

According to legislative intent, the statute of limitations only applies to the right to petition. Other rights, such as ownership, personal right, are rights of property dominion in nature, and thus are not subjected to the statute of limitations. Therefore, statute of limitations should not apply to non-credit patent ownership disputes.

China currently rejects adverse possession, because of its inherent conflict with traditional Chinese values and social principles. If the People's Courts refuse to grant trial due to statute of limitations, the rightful patent owner may lose his patent rights, and the announced patentee will, in all practicality, obtain the patent rights. The result is nothing short of adoption of adverse possession in China and conflicts with legislative principles of the Civil Law.

A statute of limitations only deprives the plaintiff's right to file suit, but the substantive right of ownership still exists. Dismissal due to statute of limitations does not mean that the People's Court has recognized the patentee as the legitimate patent owner and neither affirms nor denies the patent ownership status granted by the SIPO. As a result, it causes a strange situation, where legal ownership of the patent is in limbo. The ambiguities in law disrupt the social and legal relations derived from the patent rights, and will hinder the actuation of patented technology.

A patent not only brings economic benefits to the patentee, but also good reputation or recognition. Therefore, patent ownership disputes inherently involve a matter of deprivation of right to good reputation or recognition. This is pertains to a personal right, which does not vanish with the expiry of the patent right. Statute of limitations is not applicable to personal rights.

In general, the purposes of a statute of limitations are: (a) to stabilize social legal relations; (b) to encourage the timely protection of rights; (c) to avoid evidentiary difficulties. However, there is no reasonable basis for applying the statute of limitations to patent ownership disputes.

Settlement of patent ownership disputes does not affect already established legal relations. Patents are, in essence, intangible knowledge or information. Neither the patent owner nor any others can control technology or design in the same way as a tangible object. Possession and transfer of patent rights are not legally enforceable without SIPO's registration and announcement procedures. If a third party obtains a patent license in good faith, his reliance interest is protected by law and won’t be affected by the rightful patent owner's claim. The rightful patent owner's claims for compensation, license fees and assignment fees are obviously the creditor's claims and subject to the statute of limitations. In short, established legal relations, as protected under the systems of public credibility and statute of limitations, will not be undermined by rectification of ownership.

The loss of evidence due to the extended lapse of time is only a theoretical presumption. Such presumption might be correct in certain cases, but not in all cases. If the plaintiff fails to meet his burden of proof, the court may apply the Right Presumption Principle. Any such plaintiff willingly risks defeat, if he does not exercise his rights timely. This basic principle of civil proceedings is not unique to the nature of a statute of limitations but inherent in litigation. Therefore, evidentiary difficulties cannot justify application of statute of limitations to patent ownership disputes.

The second opinion asserts a statute of limitation exemption for continuous infringement is applicable to patent ownership disputes. Article 23 of the Interpretations exempts patent infringements, namely, exploitation of the patent without the patentee's consent and authorization. Since the patent infringements are not patent ownership disputes, such opinion that an exemption is available is unconvincing. Furthermore, although this opinion addresses the issue of statute of limitations in duration of patent, it does not indicate whether patent ownership disputes are subject to the statute of limitations after expiration of the patent.

The third opinion asserts that patent ownership disputes are peculiar and should not be subject to the statute of limitations. This opinion is feasible in practice for it reasonably settles conflicts between jurisprudence and legal provisions through the interpretation of laws, and thus incorporate jurisprudence and judicial practice.

Conclusion
As Chinese law has not yet explicitly stipulated the application range of the statute of limitations, judges should be allowed to exercise judicial discretion on a case-by-case basis and exclude the patent ownership disputes from the provisions of Article 135 of the General Principles.

We hope that the future PRC Civil Law may provide more reasonable and detailed stipulations on this issue.

The most direct and fundamental reason for initiating this change was the implementation of the new Civil Procedure Law which had amended relevant procedures for retrialing a case. According to the previous Civil Procedure Law, the parties to a case were entitled to apply for a retrial in either the original court or the court at the next higher level. Nonetheless, it is stipulated in article 178 of the new Civil Procedure Law that, "If a party considers that a legally effective judgment or ruling has some errors, he may petition the people’s court only at the next higher level for retrial." That means there will be a large amount of retrial petitions flooding into the higher level courts. The new standard may reduce the amount of first instance cases being filed to the higher people’s courts and the Supreme People’s Court, which reduces the workload of the courts and enhances the trial supervision abilities of the higher courts. The new standard came into force on the same day as the new Civil Procedure Law and will have a positive influence on the implementation of the new Civil Procedure Law. Ideally, it will improve the functionality of the judical system.

However, some issues still remain. For the time being, many local judges are already over burdened. Yet, the new standard will cause a dramatic increase of work load in the basic people’s courts. The amount of cases will increase, the legal issues will be more complex and the trials will be more difficult.

Therefore, the quality of judgments is still expected to be an issue.. As such, further regulation is still expected regarding the standard of judges and the construction of the court system to further improve the situation.

关于最高法院调整一审民商事案件级别管辖标准的一点看法

作者：刘军  金杜律师事务所 广州分所 国内诉讼部

2008年3月30日，最高法院公布调整各高级法院和中级法院管辖第一审民商事案件标准，主要从案件标的额方面大幅提高了高级法院和中级法院受理一审民商事案件的门槛，新标准自2008年4月1日起施行。

        此次调整将大大减少各高级法院受理一审案件以及最高法院受理二审案件的数量，但同时会导致基层法院受理一审案件数量的激增，相应地中级法院二审案件的办案压力也会一定程度的增大。可以说，新标准的实施后，绝大部分民商事案件的一审、二审工作将由基层法院和中级法院承担。

促发这次改革的最直接、最根本原因是新民诉法关于再审程序的修订。修订前的民诉法中规定，当事人申请再审的，可以向原审法院或上一级法院提出。而依据新民诉法第178条的规定，当事人对已经发生法律效力的判决、裁定，认为有错误的，只可以向上一级人民法院申请再审。这就意味着大量的再审案件将涌入上一级法院，并直接导致各高级法院和最高法院工作量的增大。新标准的实施可以减少高级法院和最高法院受理一、二审案件的数量，一定程度上缓解了其办案压力，这样才能够更好地发挥上级法院的审判监督职能。该标准将与新民诉法同日配套实施。

这次新标准的出台虽然对保障新民诉法的顺利实施，完善我国各级法院的功能分工有着积极意义，但同时也存在一些令人担忧的地方。目前很多地方的基层法院的法官已是超负荷工作，新标准的出台必将导致基层法院的工作量继续显著增加，且基层法院受理的案件也将涉及标的额更大、法律关系更复杂、审理难度更大，如何保证基层法院的审判质量？可以说，这些问题对基层法院法官的素质和基层法院的建设都提出了更高的要求，亟待于最高法院出台进一步的措施来规范。