In China, judges often feel difficult in identifying technical facts in patent litigations. More participants are involved such as appraisers, technical investigators and expert auxiliaries. The practice still reveals some defects. In 2019, the Supreme People’s Court (the “SPC”) interpretations newly enacted have provided more applicable procedural rules for identifying technical facts in Chinese courts. The system of technical appraisal is becoming more and more effective and efficient. The judges are more capable of deciding on the technical issues with the assistance of technical investigators. The litigation capability of the parties may also be enhanced with the participation of expert auxiliary. The comprehensive system for identifying technical facts has been established.
This essay introduces the recent developments in the rules and practice in patent litigations in China.
In China, judges handling patent cases often experience difficulties in claim construction and infringement determination due to the lack of technical backgrounds. The appraisals are widely adopted to help judges identifying professional facts. In order to cross-examine the technical opinions, the expert auxiliary has been introduced to make arguments on behalf of each of the entrusting parties so as to enhance the litigation capability of the entrusted attorneys. In the meantime, more and more technical investigators are designated to assist judges in identifying technical issues both in civil litigations and the administrative reviews on the validity decisions.
Traditionally, IP judges in China heavily relied on the technical appraisal to identify technical facts. For a long time, the IP appraisal practice was revealed some downsides. Firstly, the time-consuming and cumbersome appraisal process will dramatically delay the trial. Secondly, the IP judges feel difficult to decide on the proper technical issues to be found by an appraisal and to judge whether the appraisal opinions are reliable enough. Thirdly, judges are over-dependent on appraisal conclusion without proper due diligence on disputed technical issues. Fourthly, there is no unified and standard procedural rules on identifying technical issues, which caused much uncertainties to the parties.
Recently, the SPC made some judicial interpretations in this regard. In March 2019, the Several Provisions of the SPC on the Technical Investigator’s Participation in Litigation Activities in Intellectual Property Cases (JI  No.2) was made and came into force from May 1, 2019. In December 2019, the Several Provisions of the SPC on Evidence in Civil Proceedings (JI  No.9) was made and will come into force from May 1, 2020. In the latter, some new rules relating to the technical appraisal and the expert auxiliary are provided.
- Developments on the technical appraisal
First, the standard procedural rules are provided for the technical appraisal in the SPC interpretations newly issued in December, 2019, including:
- Generally, a court shall interpret to the parties and specify the period for an application for appraisal if the court considers there is any fact to be proved by appraisal opinions during the trial of the case.
- The court may only entrust the appraisal ex officio for the limited facts procedurally necessary for the trial, which has been set forth in Article 96.1 of the SPC Interpretations on the Civil Procedural Law.
- The involved party shall make application within the specified period and prepay the appraisal fee. Otherwise, it will be deemed that no application is made. The party who bear the burden of proof for the fact to be proved shall assume the negative impact due to the inability of providing evidence.
- The standard process for selecting a qualified appraiser is provided.
- The cross-examination on the appraisal materials is required before they are transferred to the appraiser.
- The appraiser may inquiry the parties or the witness with the permission of the court.
- The essential contents of an appraisal report are expressly provided.
- The opposition process is provided. Any opposition from the parties shall be raised in written within the designated period. The appraiser is required to make explanation, statement or supplements in response to the opposition of the parties.
- The appraiser must personally attend the court hearing to make necessary explanation if any party still insists on its opposition after reviewing the written response of the appraiser.
- The court will only grant the application for another round of technical appraisal at limited scenarios, such as there is serious procedural violation in the appraisal process.
Second, the legal liabilities of the appraiser are also provided, including:
- The appraiser must sign a letter of undertaking before the technical appraisal is commenced. The appraiser must undertake to conduct the appraisal objectively, fairly and truthfully, to testify in a court hearing, and to bear the legal responsibilities caused by false appraisal.
- A court shall order the appraiser to refund the appraisal costs if the appraiser intentionally provides the false appraisal report. The responsible appraiser may be prosecuted with administrative or criminal liabilities for its perjury in accordance with relevant provisions of the Civil Procedural Law.
- The appraiser shall refund the appraisal cost if it cannot complete the technical appraisal within the designated period. The involved party may apply for another round of technical appraisal.
- The appraiser shall refund the appraisal cost under the following scenario:
- The appraiser is not qualified for such appraisal;
- There is serious procedural violation in the appraisal process;
- The appraisal report obviously lacks a factual basis; and
- The appraisal report cannot be admitted as evidence due to the other reasons.
- The appraiser shall refund the appraisal cost if the appraiser withdraws its appraisal opinions after they are admitted. The appraiser may also be sanctioned or disciplined in accordance with relevant laws.
With these rules newly provided, we may expect a more effective and efficient appraisal process and a more truthful and reliable appraisal reports in the following litigations.
- Developments on the technical investigator
Since late 2014, when the three IP courts are firstly established, the technical investigator has been widely invited to participate into the trials of IP cases in the IP courts. On December 31, 2014, the SPC made the Temporary Provisions of the Supreme People’s Court on the Technical Investigator’s Participation in Litigation Activities in Intellectual Property Courts (the “Temporary Provisions”). In the SPC interpretations newly made in March, 2019, the technical investigators are expanded to the IP cases tried in other courts. Most of the previous rules are enacted with slight adjustments. The legal liabilities of the technical investigator are additionally provided for the possible malpractices.
The general rules for technical investigator can be summarized below:
- The technical investigator is allowed to participate into the IP trials closely relating to the professional technology, including patent, new plant species, layout design of IC, technical secret, computer software and antitrust.
- The technical investigation office can be set within a court, which is responsible for the daily management of technical investigators, designating technical investigator for an individual case and providing general technical consultations.
- Any party may recuse a technical investigator with reference to the relevant rules for the other adjudicatory personnel in the Criminal Procedure Law, the Civil Procedure Law or the Administrative Procedure Law. The technical investigator who participated into the litigation activities in the first instance is not allowed to participate into the other litigation proceedings of the same case.
- The duties to be performed by a technical investigator may include:
- To put forward suggestions on the focus of controversy on technical facts and the scope, order and methods for examining such facts;
- To participate in the evidence collection, inspection and preservation;
- To participate in the inquiries, pre-hearing meetings and hearings;
- To put forward technical investigation opinions;
- To assist judges to organize the appraiser and professional in the art to give their opinions;
- To attend the deliberations of the collegiate panel; and
- To complete the other related works.
- The technical investigator must affix his/her name on the judgment and the written technical opinions provided for the reference of collegiate panel. However, none of the specific opinions of a technical investigator is allowed to be revealed to the public.
- The technical investigator is not allowed to vote for the adjudicate conclusion. It is the collegiate panel who is responsible for the identification of relevant technical facts.
In addition to the Temporary Provisions, it is newly provided that where a technical investigator violates the laws and regulations relating to the trial activities, such as corruption or accepting bribes, playing favoritism, committing irregularities, intentionally providing disloyal opinions with false, misleading or serious omission shall be investigated for legal responsibilities. If there is possible crime there contained, the technical investigator shall be prosecuted with criminal responsibilities.
With the assistance of a technical investigator, an IP judge may have more confidence to decide on the technical facts. In particular, an IP judge is capable of summarizing the controversy focuses, evaluating the arguments of both sides, entrusting technical appraisal with proper technical issues, and finally adopting the appraisal opinions with due diligence.
- Developments on the expert auxiliary
The term of expert auxiliary was not officially written out in any enacted provisions, but has been widely used in academic discussions to refer to the persons with expertise involved in judicial proceedings.
The expert auxiliary system was developed to enhance the capacity of litigants to cross-examine appraisal conclusions. It was firstly provided in 2002 in the judicial interpretations of the SPC, and was later incorporated in the amended Civil Procedural Law in 2013. According to the written provisions, a party may invite one or two persons with expertise, upon court approval, to provide professional opinions and clarifications, to cross-examine appraisal opinions, or to address inquiries to the appraiser or the expert auxiliary of the opposite party at the court hearing. In addition to cross-examination of an appraisal conclusion, an expert auxiliary may also provide opinions and clarifications on other related professional issues.
In the SPC Interpretations on Civil Procedural Law enacted in 2015, some supplementary rules were set forward. For example, a party must seek an approval from the court for inviting expert auxiliary before the deadline for producing evidence; the opinions regarding professional issues shall be treated as statement of the entrusting party; and an expert auxiliary is not allowed to participate in court activities other than those relating to the concerned professional issues.
In the SPC Interpretations newly made in December 2019, some new rules relating to the expert auxiliary are included.
- The written application is required for the attendance of an expert auxiliary. In the written application, the background information of the expert auxiliary shall be given and objective of such attendance shall be specified.
- The expert auxiliary is prevented from participating into the trial activities except from cross-examining the appraisal opinions and addressing on the professional issues. This is quite similar to Article 123.2 of the SPC Interpretations on Civil Procedural Law enacted in 2015.
- Except for the provisions in relevant laws and judicial interpretations, the inquiry to the expert auxiliary may refer to the rules to inquiry the witness provided in the new SPC Interpretations.
Actually, there are several controversial practical operations for expert auxiliary. In some cases, the expert auxiliary is allowed to sit next to the entrusted attorney and make arguments on the technical issues at any moments he thinks fit. In some other cases, the expert auxiliary is prohibited to observe the court hearing unless he/she is required to answer questions relating the technical issues from either the panel or the parties. In the latter practice, the expert auxiliary is treated as a kind of special witness.
There is still no express rule in the SPC Interpretations newly made on that which operation mode shall apply. Worse still, it seems that the new SPC Interpretations is inclined to treat the expert auxiliary as a special witness.
The parties must face some uncertainties during the pre-hearing preparation. If an expert auxiliary is not allowed to observe the court hearing, he/she must be very cautious on his reply to the questions from either the panel or the opposite party because he/she can hardly get a sense on whether his argument is favorable to his entrusting party.
Currently, the SPC is seeking public comments on the Several Provisions on Evidence in Civil Proceedings concerning IP Cases. Hopefully, the SPC may make new operational rules as to the expert auxiliary and have this problem resolved.