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Guidelines for Evidence submission to P.R.C. courts can be found in Chapter VI of the Civil Procedure Law of the P.R.C. ("Civil Procedure Law") ¹, as well as in Some Provisions of the Supreme People' s Court on Evidence in Civil Procedures ("Provisions") ². In the P.R.C., as noted in Civil Procedure Law, parties are responsible for submitting their own evidence ³ and that evidence can take the form of “(1) documentary evidence; (2) material evidence; (3) audio-visual reference materials;(4) testimony of witnesses; (5) statements of parties; (6) expert conclusions; and (7) records of inquests.” As opposed to, for instance, certain foreign courts which may have a preference for, say, witness testimony, P.R.C. courts have a preference towards documentary evidence, though all of types of evidence noted above are acceptable. Specifically, the "testimony of witnesses" is less prevalent in P.R.C. courts in civil litigation than in, for instance, U.S. courts.

In addition to a focus on documentary evidence by the P.R.C. courts, there are very clear guidelines established so that all evidence, including documentary evidence, may have to be offered to the Court under time constraints that may seem limiting to some foreign attorneys. As per Article 33 of the Provisions, the time period for producing evidence can be as little as 30 days from the time the Court accepts the case and serves notice to the parties of the evidence production period ⁵, though a period of 60 days may be more typical in foreign-related cases (though a request for an extension of the evidence submission period is required). The 30-day period (minimum) noted shall start from the date that the party receives the notice for evidence production. On the one hand, fans of judicial efficiency may applaud the desire of the P.R.C. bench to push along these lawsuits, but for the litigating parties, these limited evidence production periods can often strain their abilities to collect relevant evidence.

Evidence "formed" outside the P.R.C., as per Article 11 of the Provisions, will have to be notarized and legalized accordingly. ⁶ Furthermore, Article 12 of the Provisions notes that any foreign language evidence will have to be translated into the Chinese language and the translations, as well as the original documents/materials will have to be submitted to the Court. ⁷ For parties with foreign interests, the Court may provide some leeway and extend the evidence production period when there are certain requirements for overseas-originated evidence through the above-noted request for an extension of the evidence submission period.

All of the above may lead a U.S. attorney to believe that evidence collection in the P.R.C. is not much different that that of in a U.S. jurisdiction, but at some point in the litigation process there will often be the inevitable question: "but what about discovery?"  In the P.R.C., parties cannot merely make a discovery request of the opposing party, as the relevant statutory law (i.e. the Civil Procedure Law) has no provisions allowing for U.S.-type discovery. What then is a party to do if it desires certain evidence which is held by another party, but cannot simply compel the other party to turn over the evidence via a discovery request? Two alternative means of gaining access to information held by the other party with the full support and approval of the Court are via: 1) An Order for Evidence Preservation and/or 2) Court-requested Expert Conclusions or Opinions.

Article 74 of the Civil Procedure Law provides that  "when there is the likelihood that evidence may be destroyed or lost or difficult to obtain later on, the participants in proceedings may apply to the People' s Court for the evidence to be preserved. The People' s Court may also on its own initiative take measures to preserve such evidence". ⁸ Though it should not be seen as a given that a specific P.R.C. court will grant an Order for Evidence Preservation, it is often a valuable tool used by litigating parties to gain access to the opposing parties evidence which is "difficult to obtain" .⁹ As noted in the Provisions, however, there are time constraints associated with requests for evidence preservation (7 days prior to the end of the evidence production period) and a guarantee may be required. ¹⁰

Upon gaining access to an opposing party" s evidence, it is possible for the party to use the evidence directly in support of its case or to, alternatively, have an "expert"  issue an Expert Opinion on a subject matter based on the evidence preserved. Article 61 of the Provisions allows that "the parties concerned may apply to the People' s Court to have one or two persons with professional knowledge to appear in court to make accounts of the specialized questions relating to the case". ¹¹ These "experts" can take advantage of evidence collected by the party, as well as evidence preserved under an evidence preservation order.

However, if the evidence sought is not available via direct means or via an evidence preservation order, there exists the possibility that a party may have the Court obtain certain evidence in support of a professional evaluation to be overseen by the Court. Article 72 of the Civil Procedure Law provides that "when the People' s Court deems it necessary to make an evaluation of a specialized problem, it shall refer to an authentication department authorized by law for the evaluation". ¹² When combined with the Court' s authority to "obtain evidence from the relevant units or individuals, and such units or individuals may not refuse to provide evidence"  as defined in Article 64 of the Civil Procedure Law, this allows that if the Court’s expert needs access to evidence held by the opposing party in order for the Court to obtain an expert opinion (where such evidence is not protected or privileged), the Court has the power to grant to the expert that access. ¹³

While many foreign (and specifically U.S.) attorneys overseeing litigation in the P.R.C. will still often lament the lack of discovery procedures in China, there are, as noted above, some tools available to gain access to the needed evidence held by the other party. As to which option(s) may work best for a specific litigation in the P.R.C., as always, the first step it to contact an appropriate and duly-registered P.R.C. attorney.

Note: this publication is for informational purposes only and it does not constitute a legal opinion.

¹Civil Procedure Law of the People’s Republic of China, promulgated and effective on April 9, 1991, Amended on October 28, 2007

²Some Provisions of the Supreme People’s Court on Evidence in Civil Procedures, promulgated and effective on April 1, 2002.

³Supra 1 at Article 64.

⁴ Id. at Article 63.

⁵Supra 2 at Article 33.

⁶ Id. at Article 11.

⁷ Id. at Article 12.

⁸ Supra 1 at Article 74.

⁹ Id.

¹⁰Supra 2 at Article 23.

¹¹ Id. at Article 61.

¹² Supra 1 at Article 72.

¹³ Id. at Article 64.

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.