(2002–2011).
Statistical data indicate that, between 2001 and 2010, IPR courts at different levels handled 69.6 percent of the patent disputes while regional IPOs handled 30.4 percent.13 Further examination of the data reveals that IPR courts in China have witnessed a rapidly growing number of hearings on patent disputes over the past decade (see Figure 1).
Statistical data about Chinese IPR tribunals are telling, and one is tempted to conclude that Chinese IPR special tribunals accomplish all their tasks by offering legal protection to patent holders. But a careful study of the history of Chinese patent dispute settlement indicates that the number of court trials is only a partial reflection of their work. Before China established its first IPR special tribunal in Beijing in 1993, patent disputes were mainly resolved by patent bureaus at different levels. Between 1985 and 1992, the patent bureaus settled a total of 1,858 patent disputes, with 1,400 of the settlements resulting in mediation because the disputes were not high-value cases.14 According to the recollection of Cheng Yongshun, one of the founding judges of the IPR Tribunal of the Beijing Intermediate People’s Court, conducting trials of IPR cases was the main way to resolve IPR disputes during the early years of the IPR tribunals in the 1990s.15 As the first of its kind in China, the IPR tribunal in Beijing shared its experience with its counterparts in other provinces. As of 2012, China had established 420 IPR tribunals at the basic court (jiceng fayuan) level, reaching into some remote provinces such as Xinjiang and Yunnan. The IPR tribunals were staffed by 2,759 IPR judges.16
With the rapid growth of IPR special tribunals over the past decade, the complexity and difficulty of patent cases on trial have also increased. Even IPR judges do not deny the challenges that IPR tribunals face. Specifically, these challenges include burdensome evidence collection, expensive lawsuits, lengthy trial processes, and difficulty with calculating economic compensation. These factors make IPR civil enforcement a luxury, particularly for IPR holders with weaker economic status, such as individuals or small and medium-sized companies. Even if companies win the case and the court orders a stop to the patent infringement, the companies may have lost time and business opportunities. As such, they go to court only when absolutely necessary. In light of this, the Chinese IPR special tribunals introduced another important part of their work in the late 1990s and early twenty-first century—the mediation between the different parties involved in the patent cases.
No systematic data exist about when the IPR special tribunals started to adopt pretrial mediation as the major means in the resolution of IPR disputes. Speeches by Chinese judges in the early twenty-first century, however, indicated that the courts increasingly realized the importance of pretrial mediation in solving civil disputes, including IPR cases. For example, in a speech delivered at the annual conference of the presidents of the Provincial High People’s Court in 2004, the Chinese People’s Supreme Court judge, Xiao Yang, stated that the people’s court should “mobilize positive factors in various aspects, explore alternative means other than trials to solve legal disputes, and further improve settlement mechanism of social contradictions.”17 In 2008, Xiao Yang’s successor, Wang Shengjun, elaborated that principle as “mediation first and then combine mediation with adjudication” (tiaojie youxian, tiaopan jiehe) in handling civil cases.18 Applying this principle to IPR cases, the newly appointed director of the IPR Tribunal of the Chinese People’s Supreme Court, Kong Xiangjun, proposed that disputes between different parties in IPR cases should be mainly categorized as “internal contradictions among the people” (renmin neibu maodun). The judge’s role should not only be limited to delivering a high-quality trial for individual cases but also should provide a legal basis for resolving plaintiff-defendant contradictions and enhancing the application of technological innovation to promote social and economic development.19 Under this rationale, mediation mechanisms aim to (1) find common interests between the parties involved, (2) negotiate a technology transfer agreement, and (3) make the parties cooperate. An example cited by an IPR judge in Nanjing illustrates the effect of the mediation mechanism. In 2005, a retired engineer, Mr. Lu (plaintiff), developed a technological innovation that was not put into application until after his retirement. When Mr. Lu discovered this, he was upset to find that his former employer (defendant) had produced goods according to the technological innovation he had designed. As he was about to sue his former employer, the Nanjing IPR court mediated between Mr. Lu and his former employer. Eventually, the two sides reached an “outside court reconciliation” and negotiated a technology transfer agreement, in which Mr. Lu received 110,000 RMB (about $15,000) in economic compensation. After the mediation, Mr. Lu decided to withdraw the lawsuit.20
In the early twenty-first century, mediation became an increasingly important way to solve IPR disputes, particularly for those cases of lower financial value. In 2003, 49.4 percent of IPR cases were resolved through pretrial mediation.21 As of 2010, that number had increased to 57.13 percent.22 An IPR judge’s comment summarized his understanding of Chinese IPR tribunals’ work:
We should not only care about the result of a patent lawsuit. More attention should be paid to the social and economic issues extending out of the lawsuit. A successful judge should not only deliver high-quality trials that can stand the test by the social public but also play his or her own role in directing the healthy development of certain industries involved. Our task is to protect inventions, but where do all the inventions come from? If there is not sufficient number of inventions, what should we protect?23
While Chinese IPR tribunals handle many more patent disputes than IPOs at different levels and are praised for delivering high-quality enforcement cases, it is unfair to conclude that the Chinese patent bureaus at various levels are weaker on the ground because they handle a lower number of cases. In fact, the IPR special tribunals and regional IPOs shoulder different tasks in the division of labor in Chinese patent work. It is true that IPR special tribunals are focused on dealing with the more complex patent cases, but that should not trivialize the role of patent bureau/IPOs in the implementation of Chinese patent policy. The next section discusses the functions of patent bureau/IPOs at different levels in China. I demonstrate that administrative enforcement is only part of the task of Chinese IPOs at different levels. More important for them is the creation of a social environment conducive to technological invention in the country. In that sense, the IPR tribunals and the patent bureau/IPOs share similar goals in China’s “patent work.”
Chinese IPOs: More Than Administrative Enforcement?
The primary administrative organ in charge of Chinese patent affairs is the State Intellectual Property Office (SIPO) and its regional offices. Some scholars have examined the organizational evolution of SIPO in a detailed way. That is, SIPO and its predecessor, the State Patent Bureau (SPB), went through several superior or “host” organizations since its establishment in 1980. These organizations include the State Science and Technology Commission (SSTC) from 1980 to 1982, the State Economic Commission (SEC) from 1982 to 1988, and the SSTC again from 1988 to 1993. In 1998, SPB was named the SIPO and acquired the status of a vice-ministerial level organization directly subordinate to the State Council.24 Scholars such as Mertha attempted to gauge the strengths and effectiveness of Chinese patent bureaucracy through the organizational history of the SPB/SIPO. Using their analysis as a foundation, I examined how the transfer from one superior or “host” organization to another informs the institutional culture of the SPB/SIPO and, possibly more important, how that institutional culture impacts the SPB/SIPO’s perception of its role in the implementation of Chinese patent policy. I found that since the early 1980s, the Chinese patent system has performed dual functions: (1) managing Chinese patent affairs in general and (2) providing guidelines for patent protection. The institutional history of Chinese the SPB/SIPO suggests that market reform in the country’s science and technology policy introduced in the early 1980s has significantly influenced its operation.
The Chinese SPB was established in 1980, with Wu Heng as its first general director. Wu Heng also held the position of SSTC vice director. As discussed in
