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

In addition, many regional Arbitration Commissions have also started paying more attention to the importance of IPR arbitration and some have set up their own Intellectual Property Arbitration Centers in an attempt to provide an effective means for IPR disputes resolution, in addition to judicial and administrative remedies. For example:

• On February 15, 2006, the first intellectual property arbitration center was set up by the Xiamen Arbitration Commission.
• On April 15, 2007, the Intellectual Property Court of Arbitration was officially set up by Wuhan Arbitration Commission.
• On April 25, 2008, the Intellectual Property Arbitration Center of Guangzhou Arbitration Commission was officially set up.
• On October 29, 2008, the Shanghai Intellectual Property Court of Arbitration was officially set up.
• Nevertheless, IPR arbitration in China is just at its infant stage and still facing the following problems:

a. Unbalanced Development among Regions in China

There are over 170 regional arbitration commissions at various levels in China. However, in addition to the Domain Name Dispute Settlement Center set up by the CIETAC, only four regional commissions, including Xiamen, Wuhan, Guangzhou and Shanghai, as mentioned above, have set up arbitration organs specializing in IP disputes. It is clear that the development of IPR arbitration is not balanced among different regions.

b. Lack of International Regard

Since the first PRC Arbitration Commission was set up in 1956, Chinese arbitral practitioners have strived to be professional, fair and efficient. In the past decade especially, the amount of arbitration cases involving foreign parties has increased every year, an indication that foreign parties have more confidence in Chinese arbitration institutions. On the other hand, IP cases accepted by the arbitration institutions are actually still quite rare from what one would expect given the number of IPR disputes. Chinese arbitration institutions must lift their arbitration standards in IP arbitrations, promote China's IP protection system to the rest of the world, and establish a series of IP arbitration centers that are internationally recognized.

c. Lack of Supplementary IP Arbitration Rules

Since intellectual property is knowledge-based, IPR arbitration is special and different from general commercial arbitration. Therefore, the procedural rules for general arbitration cannot be entirely applied to IPR arbitrations. In this aspect, the WIPO Expedited Arbitration Rules has provided a good reference point but unfortunately, to date none of the Chinese arbitration institutions has issued its own arbitration rules specific to IPR disputes.

Conclusion

Under the background of globalization, utilization of intellectual property has also become more internationalized and commercialized as can be seen through a variety of cross-border cooperation arrangements, such as through licensing, technology transfer and co-operative research and exploitation arrangements. This has raised the demands of the rights holders for dealing with IPR disputes at an international level. When seeking mechanisms for dispute settlement, more and more parties take their commercial interests as the primary concern, i.e. they require the dispute procedure to be personal, highly flexible and efficient so that the cross-border disputes can be solved without ruining the commercial relationships. As an alternative means for dispute resolution, arbitration can avoid parallel litigations and has its inherent advantages in dealing with commercial disputes in respect of flexibility, confidentiality, finality.

China has taken steps to promote and encourage IPR arbitration. In June, 2008, the State Council issued the Outline of the National Intellectual Property Strategy, which indicates that intellectual property is becoming a strategic resource in national development and a core element in international competitiveness, and therefore the development of an IP protection and arbitration system should be an important focus of the national development plan.
 

However, if the downloading process is not conducted properly, the evidence won’t be recognized as authentic, even if the downloading has been witnessed by a notary public. 

In the NuCom Online (Beijing) Information Technology Co., Ltd. v. ChinaNetwork Communications Corporation Limited, Zigong Branch case, the Supreme People’s Court emphasized, in its (2008) Min Shen Zi No.926 Civil Ruling, the necessity of examining the origin of web-based information , as said origins are fundamental  to deciding whether the notarized evidence can be used as the basis for a court’s judgment. If the notary public cannot gain access to the computer or mobile hard drive before the notarization procedure and if the notarization itself does not  include a record of the state of the computer or mobile hard drive with respect to the integrity of said computer/mobile hard drive prior to the downloading, the Supreme People’s Court deems that the notarization can prove that the act of downloading occurred before a notary public, but it cannot prove that the data at issue was actually downloaded from a specific location on the Internet.

The Supreme People’s Court’s above judgment is based on the nature of  web technology. Electronic data stored in a web sever can also be stored or cached in a local computer. Under certain scenarios, when you use a local computer to visit a target website, the web pages displayed are actually those stored or cached in the local computer, rather than web pages downloaded from a remote website.   Therefore, the actual origin of the evidence cannot be guaranteed merely by having a notary public witnessing the downloading process, as that “downloading” may be simply pulling up the web page from the cache in the local computer.

The Supreme People’s Court’s opinion noted above is not only guidance for the courts when examining  notarized web page evidence, but also an important instruction for those parties seeking to gather evidence in support of judicial proceedings in China. To ensure proper authentication of web-based evidence, parties should conduct notarized web page downloads at the notary public office using the notary public’s computer and, also, request that the notary public record the condition of the computer prior to the notarization process. If the downloading must be done on another computer, the party should initiatively request the notary public to delete all relevant files from the caches of the computer by appropriate procedures before downloading the requested web pages and record all of the detailed steps in the notarization process.