Supreme People’s Court’s new guiding opinion has critical implications for trademark owners
On 28 July 2023, the Supreme People's Court issued a Guiding Opinion on the Determination of Jurisdiction Concerning Elevation of Jurisdiction and Retrials of Cases. As indicated in the title, this opinion addresses two topics: elevation of jurisdiction and retrials.
Elevation of jurisdiction
Elevation of jurisdiction refers to the transfer of jurisdiction – a characteristic of the Chinese legal system – outlined in the second chapter of the Civil Procedure Law about judicial organisation. Generally speaking, the judiciary is organised into four levels:
- basic people's courts;
- intermediary people's courts;
- high people's courts (one per province); and
- one Supreme People's Court.
Procedures may go through three successive levels of jurisdiction:
- first instance;
- appeal; and
In principle, whether a case should begin at the basic, intermediate, high court or even Supreme Court level depends on the case’s impact on the territorial jurisdiction covered by the court. Some courts have a special competence on certain matters, such as the four IP courts in Beijing, Shanghai, Guangzhou and Hainan. However, the current system is quite flexible: Article 39 of the Civil Procedure Law provides for the possibility of adjustments (eg, a case filed at a certain level may either be moved to a lower level or elevated to a higher level). The Supreme People’s Court’s recent guiding opinion now clarifies when a case can be moved to a higher level.
This is particularly critical for trademark owners. In April 2022, the Supreme People’s Court issued a circular about the jurisdictional threshold of basic courts, which resulted in the vast majority of trademark litigation to be initiated at the basic level. Consequentially, appeals were handled by the intermediate court and retrials by the high courts; the Supreme People’s Court was out of reach for most trademark infringement cases.
This new interpretation allows certain trademark infringement cases to be elevated to the intermediate level, which brings them within reach of the Supreme People’s Court for a possible retrial.
Retrial is part of the general supervision of cases, which is dealt with in Chapter 16 of the Civil Procedure Law.
Article 205(2) states:
Where the Supreme People's Court discovers an error in a judgment, ruling or mediation of a Local People's Court at any level which has come into legal effect or where a High People's Court discovers an error in a judgment, ruling or mediation of a lower-level People's Court which has come into legal effect, it shall have the right to retry or order the lower-level People's Court to re-try the case.
While there is no time limit for this, the occurrence of such a retrial ordered by the Supreme People’s Court or a high court is incredibly rare. The most frequent situation is one where a litigant, unhappy with the appeal-level decision, asks the higher-level court (ie, the Supreme People’s Court – if the appeal decision was rendered by a high court) to retry the case. This request must be filed within six months.
Article 207 of the Civil Procedure Law outlines no fewer than 13 causes for retrial. Most of these concern evidence; only one concerns a possible error in the application of the law.
With the number of civil litigations on the rise, the Supreme People’s Court became overwhelmed with retrial applications. In May 2021, the court issued a pilot programme for improving the four levels’ court trials, which narrowed down the number of acceptable causes for retrial. The court would now only accept cases if:
- there was no objection on evidence or procedure;
- if the dispute focused on a point of law; or
- if the decision had been made by the judicial committee of a high court, which is a special panel that deals with important cases.
However, this made it almost impossible to obtain a retrial by the Supreme People’s Court. Therefore, this programme is no longer active and in the new guiding opinion, the Supreme People’s Court has re-opened its door to retrial applications.
Article 15 of the guiding opinion states that high courts shall, in principle, retry cases that are eligible for retrial unless the reasons for retrial are mostly due to procedural defects, in which case the high court may order the lower people’s court – that issued the judgment – to retry.
Article 16 further provides that, except where the law and judicial interpretations justify an elevation of jurisdiction, the Supreme People’s Court will retry a case if it meets one of the following circumstances:
- it has a significant nationwide impact;
- it clarifies general guidance when it comes to the application of the law;
- if the point of law in question involves a major disagreement within the court;
- if the point of law in question involves a significant divergence of views among different high courts (provincial level) that are adjudicating similar cases;
- where the case is more conducive to a fair trial; and
- if the Supreme People’s Court deems that it should be brought to trial.
In addition, the guiding opinion reiterates the aforementioned provision of Article 205(2) of the Civil Procedure Law, which enables the Supreme People’s Court to retry cases ex officio, where it finds – on its own initiative – that there is an error in a civil or administrative judgment and ruling of local people's courts at any level.
This opinion re-enables the Supreme People’s Court to hear more retrial cases, as crucial cases can now start at an intermediate court after elevation of jurisdiction. This is especially critical for the many cases filed with the Beijing IP Court following decisions made by the China National IP Administration, which are subject to appeal before the Beijing High Court and then to the Supreme People’s Court for retrial. Whether – and how – the Supreme People’s Court will use its ex officio power to harmonise the application of the law will be vital.
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